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February 16, 2010 Agenda
AGENDA CITY OF DENTON CITY COUNCIL February 16, 2010 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 16, 2010 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. Requests for clarification of agenda items listed on the agenda for February 16, 2010. 2. Receive a report, hold a discussion, and give staff direction regarding the FY 2008-09 Comprehensive Annual Financial Report and annual audit. 3. Receive a report, hold a discussion, and give staff direction regarding the preliminary FY 2010-11 Budget and Five Year Financial Forecast. 4. Receive a report, hold a discussion, and give staff direction regarding a proposed amendment to the Denton Development Code, Section 3 5.14.3 (B), regarding parking in the Central Business District. Following the completion of the Work Session, the City Council will convene in a Closed Meeting to consider specific items when these items are listed below under the Closed Meeting section of this agenda. When items for consideration are not listed under the Closed Meeting section of the agenda, the City Council will not conduct a Closed Meeting and will convene at the time listed below for its regular or special called meeting. The City Council reserves the right to adjourn into a Closed Meeting on any item on its Open Meeting agenda consistent with Chapter 551 of the TEXAS GOVERNMENT CODE, as amended, as set forth below. CLOSED MEETING 1. Closed Meeting: A. Deliberations regarding consultation with the City Attorney -Under Texas Government Code Section 551.071, Deliberations regarding Economic Development Negotiations -Under Texas Government Code Section 551.087, and Deliberations regarding real property -Under Texas Government Code Section 551.072. 1. Receive a report and hold a discussion regarding legal issues on matters regarding the leasing of land, financing and contractual matters of a city facility on University of North Texas property located at I-3 5 and North Texas Blvd. The discussion shall include financial information the City Council will review, including the offer of financial or other incentives. This discussion is held in which the duty of the attorney to the governmental body under the Texas Disciplinary rules of Professional conduct of the State Bar of Texas clearly conflicts with the provisions of the Texas Open Meetings Act, Chapter 551 of the Texas Government Code. City of Denton City Council Agenda February 16, 2010 Page 2 B. Deliberations regarding Real Property -Under Texas Government Code Section 551.072; Consultation with Attorney -Under Texas Government Code Section 551.071. 1. Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the grant of property within the Denton Rail Corridor to the DART or DCTA, the limits of said corridor being all that certain lot, tract or parcel of land described in that certain Quitclaim Deed from Missouri Pacific Railroad Company to the City of Denton, Texas dated August 9, 1993, and filed on August 24, 1993, as Clerk No 93- 80058485 in the Real Property Records of Denton County, Texas; and also being that same property described in that certain Correction Quitclaim Deed, dated June 1, 2001 and filed for record in the Real Property Records of Denton County, Texas as Volume 4857, Page 020211 where such deliberation in an open meeting would have a detrimental effect on the position of the City Council in negotiations with DART or DCTA. Consultation with the City's attorneys regarding legal issues associated with the granting of said property above described where a public discussion of these legal matters would clearly conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. C. Consultation with Attorney -Under Texas Government Code Section 551.071. 1. Consider and discuss status of a claim against the City of Denton by Dustin Epting. 2. Consultation, discussion, deliberation, and receipt of information from the city's attorneys involving legal matters relating to the award of competitive sealed bids for goods and services pursuant to Chapter 252 of the Texas Local Government Code where public discussion of these legal matters would clearly conflict with the duty of the city's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. 3. Receive a briefing and status report from the City's attorneys regarding the litigation entitled The City of Denton, Texas v. The Universit~f North Texas, Cause No. 2008-20043 -15 8, now endin before the 15 Stn p g Judicial District Court in and for Denton County, Texas; discuss, deliberate and provide the attorneys with direction. A public discussion of these legal matters would conflict with the duty of the City's attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. City of Denton City Council Agenda February 16, 2010 Page 3 D. Consultation with Attorneys -Under Texas Government Code, Section 551.071; Deliberations Regarding Certain Public Power Utilities: Competitive Matters - Under Texas Government Code Section 551.086. 1. Receive a briefing, discuss and deliberate regarding the status of the activities required to close the pending Texas Municipal Power Agency ("TMPA") litigation entitled Ex Parte Texas Municipal Power Agency Cause No. D-1-GN-08-003426, endin in the 126th Judicial District p g Court in and for Travis County, Texas; Ex Parte Texas Municipal Power A enc II, Cause No. D-1-GN-08-003 693, in the 261St Judicial District Court in and for Travis County, Texas; and Texas Municipal Power A Plaintiff v. Cit~yan, Texas, Defendant, Counter-Plaintiff and Third Party Plaintiff v. City of Denton, Texas and City of Garland, Texas, Third Party Defendants, Cause No. 28169, pending in the 506th Judicial District Court in and for Grimes County, Texas; as well as the steps necessary to proceed to an order dismissing each of the said TMPA cases and the Public Utilities Commission of Texas proceedings as to all parties; discuss and deliberate several public power issues involved with the above-referenced TMPA litigation. Receive a briefing and status report from the city's attorneys regarding said pending TMPA litigation. Provide the City's attorneys with direction. A public discussion of these legal matters would conflict with the duty of the City's attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. 2. Receive a presentation from DME staff, discuss, deliberate and consider possible changes to the ECA Rate Rider to the electric rate ordinance, which issues are public power utilities competitive and financial matters. Receive legal advice from the City's attorneys regarding possible changes to the ECA Rate Rider. Provide the City's attorneys with direction. A public discussion of these legal matters would conflict with the duty of the city's attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. ANY FINAL ACTION, DECISION, OR VOTE ON A MATTER DELIBERATED IN A CLOSED MEETING WILL ONLY BE TAKEN IN AN OPEN MEETING THAT IS HELD IN COMPLIANCE WITH TEXAS GOVERNMENT CODE, CHAPTER 551, EXCEPT TO THE EXTENT SUCH FINAL ACTION, DECISION, OR VOTE IS TAKEN IN THE CLOSED MEETING IN ACCORDANCE WITH THE PROVISIONS OF §551.086 OF THE TEXAS GOVERNMENT CODE (THE `PUBLIC POWER EXCEPTION'). THE CITY COUNCIL RESERVES THE RIGHT TO ADJOURN INTO A CLOSED MEETING OR EXECUTIVE SESSION AS AUTHORIZED BY TEX. GOVT. CODE, §551.001, ET SE . (THE TEXAS OPEN MEETINGS ACT) ON ANY ITEM ON ITS OPEN MEETING AGENDA OR TO RECONVENE IN A CONTINUATION OF THE CLOSED MEETING ON THE CLOSED MEETING ITEMS NOTED ABOVE, IN ACCORDANCE WITH THE TEXAS OPEN MEETINGS ACT, INCLUDING, WITHOUT LIMITATION §551.071-551.086 OF THE TEXAS OPEN MEETINGS ACT. Regular Meeting of the City of Denton City Council at 6:30 p.m. in the Council Chambers at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be consi ere City of Denton City Council Agenda February 16, 2010 Page 4 REGULAR MEETING 1. PLEDGE OF ALLEGIANCE A. U. S. Flag B. Texas Flag "Honor the Texas Flag - I pledge allegiance to thee, Texas, one state under God, one and indivisible." 2. PROCLAMATIONS/PRESENTATIONS A. Proclamations/Awards 1. IHOP-Shriners Hospital proclamation 2. Severe Weather Awareness Week in Denton 3. Resolution of Appreciation for Jim Witt 3. CONSENT AGENDA Each of these items is recommended by the Staff and approval thereof will be strictly on the basis of the Staff recommendations. Approval of the Consent Agenda authorizes the City Manager or his designee to implement each item in accordance with the Staff recommendations. The City Council has received background information and has had an opportunity to raise questions regarding these items prior to consideration. Citizens may speak on items listed on the Consent Agenda. A Request to Speak Card should be completed and returned to the City Secretary before Council considers the Consent Agenda. Citizen comments on Consent Agenda items are limited to three minutes. Listed below are bids, purchase orders, contracts, and other items to be approved under the Consent Agenda (Agenda Items A - 0). This listing is provided on the Consent Agenda to allow Council Members to discuss or withdraw an item prior to approval of the Consent Agenda. If no items are pulled, Consent Agenda Items A - 0 below will be approved with one motion. If items are pulled for separate discussion, they may be considered as the first items following approval of the Consent Agenda. A. Consider adoption of an ordinance amending Section 22-3 8 of Chapter 22 Parks and Recreation of the Code of Ordinances of the City of Denton, Texas, relating to facility and program fees by adopting a schedule of fees; repealing all fees in conflict with such schedule, repealing Ordinance No. 2009-224 and all ordinances in conflict with the new schedule of fees; and providing an effective date. The Parks, Recreation and Beautification Board recommend approval (4-0). B. Consider adoption of an ordinance of the City of Denton, Texas to declare the intent to reimburse expenditures from the General Fund with Certificates of Obligation with an aggregate maximum principal amount equal to $508,185 to allow for the purchase of a Fixed Asset module in the JD Edwards Financial System and a Municipal Court Software System; and providing an effective date. C. Consider adoption of an ordinance to the City of Denton, Texas authorizing the City Manager to execute a professional services agreement between the City of Denton and MarketSphere Consulting, LLC for implementation of a JD Edwards Fixed Asset and Job Cost Functionality software module in the JD Edwards City of Denton City Council Agenda February 16, 2010 Page 5 financial system; authorizing the expenditure of funds; and providing an effective date (RFSP 4442-JD Edwards Fixed Asset Implementation and Increased Job Cost Functionality awarded to MarketSphere Consulting, LLC in an amount not to exceed $252,340). D. Consider adoption of an ordinance accepting competitive bids by way of an Interlocal Cooperative Purchasing Program Participation Agreement with the City of Carrollton under Section 271.102 of the Local Government Code, for the purchase of Incode Software for the City of Denton Municipal Court; providing for the expenditure of funds therefor; and providing an effective date (File 4465- Interlocal Agreement for Incode Software for Municipal Court with the City of Carrollton, contract awarded to Tyler Technologies, Inc. in the amount of $258,185). E. Consider adoption of an ordinance accepting competitive bids and awarding a public works contract for the construction of a covered parking structure for Denton Municipal Electric; providing for the expenditure of funds therefor; and providing an effective date (Bid 4430-awarded to the lowest responsible bidder meeting specification, Links Construction, LLC, in the amount of $331,700). The Public Utilities Board recommends approval (5-0). F. Consider adoption of an ordinance accepting competitive bids and awarding a public works contract for the construction of a 42-inch water transmission main from Scripture Street north along Bonnie Brae to West Windsor Drive and over to Loop 288; providing for the expenditure of funds therefore; and providing an effective date (Bid 4466-awarded to the lowest responsible bidder meeting specification, SJ Louis Construction of Texas, LTD in the amount of $4,670,710). The Public Utilities Board recommends approval (7-0). G. Consider adoption of an ordinance of the City of Denton, Texas, appointing Robin A. Ramsay as Presiding Judge for the City of Denton Municipal Court of Record; establishing term of office for the Municipal Judge in accordance with applicable state statutes; providing for renewal and extension of term absent specific action by Council; authorizing the Mayor to execute an employment agreement for term of office; ratifying terms of the employment agreement; and declaring an effective date. H. Consider adoption of an ordinance of the City Council of the City of Denton, Texas approving a renewal of Beneficial Reuse Water Contract by and between the City of Denton, Texas and the Oakmont Management Corp.; providing for the City Manager's execution thereof; providing for the expenditure of funds therefor; providing for retroactive ratification and approval thereof; and providing an effective date. The Public Utilities Board recommends approval (5-0). I. Consider adoption of an ordinance authorizing the City Manager to approve a first amendment to an Airport Lease dated December 1, 1989 between the City of Denton, Texas and David Smith at the Denton Municipal Airport; and providing an effective date. The Airport Advisory Board recommends approval (7-0). City of Denton City Council Agenda February 16, 2010 Page 6 J. Consider adoption of an ordinance authorizing the City Manager to approve a First Amendment to an Airport Lease dated December 1, 1989 between the City of Denton, Texas and William Evans at the Denton Municipal Airport; and providing an effective date. The Airport Advisory Board recommends approval (7-0). K. Consider adoption of an ordinance authorizing the City Manger to approve a first amendment to an Airport Lease dated December 1, 1989 between the City of Denton, Texas and Tony Montgomery at the Denton Municipal Airport; and providing an effective date. The Airport Advisory Board recommends approval (7-0). L. Consider adoption of an ordinance authorizing the City Manager, or his designee, to execute on behalf of the City of Denton an Estoppel certificate with Justin State Bank as requested by Hangars Plus L.L.C./Tony Montgomery to accommodate a mortgage loan secured with the hangar constructed at 4800 Lockheed Lane; and providing an effective date. The Airport Advisory Board recommends approval (7-0). M. Consider adoption of an ordinance of the City Council of the City of Denton, Texas, approving a grant application from Denton Community Theatre, Inc. from the Downtown Incentive Grant Program not to exceed $8,000; and providing for an effective date. The Economic Development Partnership Board recommends approval (6-0). N. Consider adoption of an ordinance of the City of Denton, Texas amending the Denton Municipal Electric Rate Ordinance contained in Ordinance No. 2009-218, solely as to Rate Rider ECA (Energy Cost Adjustment); providing for a repealer; providing for a severability clause; and providing for an effective date. The Public Utilities Board recommends approval (5-0). 0. Consider approval of the minutes: January 19, 2010 February 1, 2010 February 2, 2010 4. PUBLIC HEARINGS A. Continuation of a public hearing on the Sale of the Denton Branch Rail Trail Corridor owned by the City of Denton to the Dallas Area Rapid Transit Authority (DART) for the purposes of reactivation of a rail line between Denton and Carrollton and consideration of an ordinance granting approval for the sale and transfer of the Denton Branch Rail Trail from approximately Mile Post 721.89 to Mile Post 729.5 for the purpose of a commuter railroad in accordance with Chapter 26 of the Texas Parks and Wildlife Code; and providing an effective date. City of Denton City Council Agenda February 16, 2010 Page 7 B. Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, providing for a zoning change from a Neighborhood Residential 2 (NR-2) zoning district classification and use designation to a Neighborhood Residential Mixed Use 12, (NRMU-12) zoning district classification and use designation, and repealing Ordinance No. 87-113 allowing Specific Use Permit 5- 193 for a Girl Scout Council office/headquarters and activity/training center and Ordinance No. 87-154, an amendment of Ordinance 87-113; for approximately 5.2 acres of land located at 4000 W. Un1VerSlty Drlve, legally described as Ranch Estates, Block E (SW corner), in the City of Denton, Denton County, Texas; providing for a penalty in the maximum amount of $2,000 for violations thereof; providing a severability clause and an effective date. (Z09-0011) The Planning and Zoning Commission recommends denial of this request (6-1). A SUPERMAJORITY VOTE BY COUNCIL IS REQUIRED FOR APPROVAL. C. Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, providing for zoning change from a Neighborhood Residential 3 (NR-3) zoning district classification and use designation to a Neighborhood Residential Mixed Use 12 (NRMU-12) zoning district classification and use designation, with an overlay district; on approximately 15.3 acres of land located west of Stuart Road and approximately 600 feet northwest of the intersection of Windsor Street and Stuart Road; and providing for a penalty in the maximum amount of $2,000.00 for violations thereof, severability and an effective date (Z08-0016) . The Planning and Zoning Commission recommends approval of the request (4-2). A SUPERMAJORITY VOTE BY COUNCIL IS REQUIRED FOR APPROVAL. 5. ITEMS FOR INDIVIDUAL CONSIDERATION A. Consider adoption of an ordinance of the City of Denton, Texas, authorizing the City Manager to execute an Agreement Regarding Exercise of Option to Repurchase Rail Corridor, as appropriate, by and between the City of Denton, Texas ("City") and the Dallas Area Rapid Transit Authority ("DART") transferring the Denton Rail Corridor, consisting of those lands described in that certain Quitclaim, dated August 9, 1993, County Clerk File No. 93-R0058485, as corrected by Correction Quitclaim Deed, dated June 1, 2001, County Clerk File No. 2001-R0057561, and as corrected by Correction to Correction Quitclaim Deed, dated June 28, 2001, County Clerk File No. 2001-R0076013, all recording references to the Real Property Records of Denton, Texas. B. Consider adoption of an ordinance considering all matters incident and related to the issuance, sale and delivery of up to $65,000,000 in principal amount of "City of Denton Combination Tax and Revenue Refunding Bonds, Series 2010"; establishing parameters for the redemption of certain outstanding obligations of the City; authorizing the issuance of the bonds; levying an annual ad valorem tax and providing for the security for and payment of said bonds; approving and authorizing instruments and procedures relating to said bonds; and enacting other provisions relating to the subject. City of Denton City Council Agenda February 16, 2010 Page 8 C. Consider appointments to the following Boards and Commissions: 1. Construction Advisory & Appeals Board 2. Human Services Advisory Committee D. Citizen Reports 1. Review of procedures for addressing the City Council. 2. Receive citizen reports from the following: a. Frenchy Rheault regarding GDAC membership month. b. Bob Clifton regarding Fry Street. c. Katie Humphries regarding library funding. d. Willie Hudspeth regarding concerns of Southeast Denton. e. Hagar Hudspeth regarding concerns of Southeast Denton. f. Jordan Hudspeth regarding concerns of Southeast Denton. g. Robert Donnelly regarding drainage. E. 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. F. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the Texas Open Meetings Act. G. Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the Texas Open Meetings Act. CERTIFICATE I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the City of Denton, Texas, on the day of , 2010 at o'clock (a.m.) (p.m.) CITY SECRETARY NOTE: THE CITY OF DENTON CITY COUNCIL CHAMBERS IS ACCESSIBLE IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING. PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE TELECONMINICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED THROUGH THE CITY SECRETARY' S OFFICE. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Receive a report, hold a discussion, and give staff direction regarding the FY 2008-09 Comprehensive Annual Financial Report and annual audit. BACKGROUND Each year, the City hires an independent accounting firm to conduct an audit of the City's basic financial statements. The purpose of the audit is to express an opinion as to whether the City's financial statements present fairly, in all material respects, the financial position of the City. The annual audit report is comprised of four major components: 1) the Comprehensive Annual Financial Report (CAFR), 2) Management Letter, 3) Single Audits, and 4) Auditor's Communication to the Audit Committee. The CAFR represents the entire financial position of the City, specifically for the fiscal year ending September 30, 2009. The document includes the independent auditor's opinion of management's representations within the annual report. The auditors have provided the City a clean opinion, which means that in the opinion of Weaver, LLP., the City's financial statements present fairly, in all material respects, the financial position of the City. The Weaver audit specifically included the following items: • Audit of the City's CAFR in accordance with generally accepted auditing standards. • Performance of a Single Audit, which is an audit of the City's expenditures of State and Federal grant awards. • Preparation of a letter to management detailing any weaknesses or ideas for improvement identified during the audit. • A review, analysis, and evaluation of the City's financial accounting systems and internal controls. The auditor's examination of internal controls was conducted at a level sufficient to gain an understanding of the internal control structure to determine nature, timing, and extent of audit procedures. The auditors did not perform an audit of internal controls, but performed limited tests of internal controls for the purpose stated above. Additionally, the auditors examined, on a test basis, evidence supporting amounts and disclosures in the combined financial statements. Attached you will find a copy of the City's 2009 CAFR. Included in the CAFR is the Independent Auditor's Report. Also, I have attached the Letter to Management from Weaver and the Single Audit report. The Auditor's Communication to the Audit Committee will be provided on February 15th by the auditor. Representatives from Weaver will be present to provide their opinion and to answer your questions. As you know, I also sent a draft of the CAFR to the members of the Audit/Finance Committee on February 3rd. I received several questions from the committee concerning the report. I have prepared a memorandum that details the questions that I have received and the answers that I have been able to compile. However, due inclement weather, this memorandum is not included in the back up materials. This information will be emailed to the Audit/Finance Committee and the City Council under separate cover. I look forward to discussing the attached materials with you. If you have any questions, or need additional information, please let me know. EXHIBITS a) Comprehensive Annual Financial Report (CAFR) b) PowerPoint Presentation c) Single Audit Reports d) Management Letter e) CAFR Questions from Committee Members and Answers from Staff (to be emailed to the Audit/Finance Committee and the City Council) Respectfully Submitted: Bryan Langley Director of Finance CITY OF DENTON, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the fiscal year ended September 30, 2009 CITY MANAGER George C. Campbell ASSISTANT CITY MANAGER Jon Fortune Prepared by: Bryan Langley Harvey Jarvis Director of Finance Controller Cody Wood Kevin Ann Mullen, CPA Assistant Controller Assistant Controller Diane Chang, CPA Kurt Breyfogle Senior Grants Accountant Senior Utilities Accountant Ed Lane, CPA Mary Billings Accountant III Accountant III David Wilson Lori Allen Electric Accounting Manager Accounting Technician Michelle McCallum Antonio Puente Budget and Municipal Court Manager Treasury Manager Katie Griffin Caroline Finley Financial Analyst Treasury Administrator City of Denton, Texas Comprehensive Annual Financial Report For Year Ended September 30, 2009 TABLE OF CONTENTS Page INTR OD UCTOR Y SECTION (UNAUDITED) Transmittal Letter i Organlzatlona C art vi Certl icate o Ac levement ................................................................................................................................vll List o Prmcipa 0 icla s viii FINANCIAL SECTION: Independent Auditors' Report l Management's Discussion and Analysis .............................................................................................................3 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets ........................................................................................................................11 Statement of Activities ...................... ....................................................................................................12 Fund Financial Statements: Governmental Fund Financial Statements: Balance Sheet .................................................................................................................................14 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ......15 Statement of Revenues, Expenditures and Changes in Fund Balances ..........................................16 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ..............................................................17 Statement of Revenues, Expenditures and Changes in Fund Balance - Budget to Actual General Fund ...............................................................................................................................19 Proprietary Fund Financial Statements: Statement of Net Assets .................................................................................................................20 Statement of Revenues, Expenses and Changes in Fund Net Assets .............................................24 Statement of Cash Flows 26 Fiduciary Fund Financial Statements: Statement of Assets and Liabilities ................................................................................................28 Notes to Basic Financial Statements ...........................................................................................................29 Required Supplementary Information: Schedule of TMRS Funding Progress and Contributions -Last Three Fiscal Years .................................61 Schedule of Denton's Firemen's Relief and Retirement Plan Funding Progress and Contributions -Last Three Valuation Years ....................................................................... ..........61 Schedule of Other Post Employment Benefits Funding Progress and Contributions Last Three Valuation Years 62 Combining and Individual Fund Financial Statements and Schedules: Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual: Debt Service Fund ................................................................................................................................63 Combining Balance Sheet -Nonmajor Governmental Funds 66 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds ............................................................................................................68 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget to Actual: Recreation .......................................................................................................................................70 Police Confiscation ......................... ...............................................................................................71 Tourist and Convention 72 Gas Well Revenues Fund ...............................................................................................................73 City of Denton, Texas Comprehensive Annual Financial Report For Year Ended September 30, 2009 TABLE OF CONTENTS (Continued) Page FINANCIAL SECTION (continued): Combining and Individual Fund Financial Statements and Schedules (continued): Combining Statement of Net Assets -Internal Service Funds 76 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - Internal Service Funds ..........................................................................................................................78 Combining Statement of Cash Flows -Internal Service Funds ..................................................................80 Combining Statement of Assets and Liabilities -Agency Funds 82 Combining Statement of Changes in Assets and Liabilities -Agency Funds 83 Capital Assets Used in the Operation of Governmental Funds: Comparative Schedules by Source 85 Schedule by Function and Activity 86 Schedule of Changes by Function and Activity 87 STATISTICAL SECTION (UNAUDITED) Table 1 Net Assets by Component .........................................................................................................................90 2 Changes in Net Assets ...............................................................................................................................92 3 Fund Balances of Governmental Funds ....................................................................................................96 4 Changes in Fund Balances of Governmental Funds ..................................................................................98 5 Assessed Value and Estimated Actual Value of Taxable Property .........................................................100 6 Property Tax Rates (Per $100 of Assessed Value) -Direct and Overlapping Governments ..................101 7 Principal Property Taxpayers ..................................................................................................................103 8 Property Tax Levies and Collections ......................................................................................................104 9 Ratio of Outstanding Debt by Type .........................................................................................................106 10 Ratio of General Bonded Debt Outstanding ............................................................................................108 11 Direct and Overlapping Governmental Activities Debt ..........................................................................109 12 Pledged Revenue Coverage .....................................................................................................................110 13 Demographic and Economic Statistics ....................................................................................................112 14 Principal Employers ................................................................................................................................113 15 Full-Time Equivalent City Government Employees by Function/Program ............................................114 16 Operating Indicators by Function/Program .............................................................................................116 17 Capital Asset Statistics by Function/Program .........................................................................................118 OTHER SUPPLEMENTAL INFORMATION: Schedule of Expenditures -Budget and Actual -General Fund ...............................................................121 CITY OF: DENTON i 215 E. 11C1iLYNEI'I)E.'TO; TEI4S 76201 • (90) 39-8200 •F.Y(90) 39-7206 February 8, 2010 TO: The Honorable Mayor, Members of the Citv Council and Citizens of the City of Denton It is with great pleasure that we present to you a copy of the Comprehensive Annual Financial Report (CAFR) of the Citv of Denton (the City) for the fiscal year ended September 30, 2009. The responsibility for both the accuracy, of the presented information and the completeness and fairness of the presentation of the data, including all disclosures, rests with the Citv. To the best of our knowledge and belief,, the enclosed data is accurate in all material respects and is reported in a manner designed to fairly present the results of our operations in each of the various funds reported by the City. All disclosures necessary to enable the reader to gain an understanding of the City's financial activities have been included. The CAFR is presented in three sections: Introductory, Financial, and Statistical. The Introductory Section includes this transmittal letter, the Citv's organizational chart, and a list of principal officials. The Financial Section includes the Management's Discussion and Analysis (MD&A), Basic Financial Statements, Required Supplementary Information, Combining and Individual Fund Financial Statements and Other Supplemental Information, as well as, the independent auditors' report. The Statistical Section includes selected financial and demographic information, generally presented on a multi-year basis. Management's discussion and analysis (MD&A) immediately follows the independent auditors' report and provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. Profile of the Government The Citv of Denton was incorporated September 26, 1866. The City operates as a home rule city, under a council-manager form of government and provides a full range of services as authorized by its charter, such as public safety (police and fire protection); public works (construction and maintenance of highways, streets and infrastructure); parks and recreation; electric, water and wastewater utilities; solid waste; and general administrative services. This report includes all funds of the City. Local Economy The Citv of Denton is located in the northern portion of the Dallas/Fort Worth Consolidated Statistical Area (CSMA). The City, is a part of the Dallas/Fort Worth Metroplex, and is situated at the apex of a triangle based by Dallas (38 miles to the southeast) and Fort Worth (36 miles to the southwest) providing excellent access to and from all parts of the area. Due to its proximity to Dallas and Fort Worth, Denton enjoys a low average unemployment rate of 5.9 percent compared to the state average of 7.8 percent (as of December 2009). With the expansion of both its hospitals and other medical facilities, Denton is well on its way to becoming a regional medical destination serving north Texas and southern Oklahoma. Denton is also home to two universities that have a combined enrollment of more than 42,400 students. Fiscal year 2008-09 brought exciting news in economic development. Listed below are just a few of the highlights. • Aldi Foods completed construction of their 500,000 square foot distribution center. The company also improved Westcourt Road as part of their project. Aldi operates grocer, stores in the east and midwest. The Denton distribution center will support the opening of Aldi stores in Texas and Oklahoma. The project is estimated at $52 million. i • The Rayzor Ranch Market Place has nearly completed construction of Highway 3 80 in order to complete the road improvements prior to the opening of the retail center. WalMart and Sam's received their building permits and began construction in 2009. Allegiance Hillview Development completed construction of approximately 40,000 square feet in retail space and are in the process of completing tenant lease agreements. Several pad sites have been purchased by local banks and restaurants and have also received building permits. • Citizens have witnessed an increase in activity at the Unicorn Lake mixed-use development. The Hilton Homewood Suites hotel opened in 2009, and the 20,000 square feet of retail space is ninety percent full. Several medical offices, including a 45,000 square foot office/training facility are in various stages of completion. These new structures join the already completed Brick House Gym, Pour House restaurant, Cinemark Theater and several upscale residential units. • In addition to the Hilton Homewood Suites, the following new hotels were completed or were under construction in 2008-09 providing a total of 548 additional rooms: o Hilton Garden Inn -112 rooms o Courtyard byMarriott - 90 rooms o Comfort Inn -117 rooms o Candlewood Suites - 79 rooms o Sleep Inn - 58 rooms o Holiday Inn Express - 92 rooms • Fastenal Company completed construction of their 208,000 square foot distribution center on Airport Road. The company received its certificate of occupancy in November 2008. The facility will also be used as their regional headquarters and training center. • Josten's completed a 13,000 square foot expansion to their existing 57,000 square foot plant in 2008. The company consolidated operations of an out-of state facility with the Denton plant. Josten's makes jewelry for educational and sports recognitions -including Super Bowl and other sports championship rings. The expansion is estimated at $4 million. • Tetra Point Fuels completed phase one of their ethanol fuel plant at the City's Landfill. The project will locate Tetra Point Fuels adjacent to the new Pratt Industries materials recycling facility that is currently under construction at the Landfill. The Pratt facility will be approximately 40,000 square feet and the Tetra Point Fuels phase one is estimated at 10,000 square feet. Major Initiatives According to recent projections from the North Central Texas Council of Governments, the city is expected to continue growing over the next several years. According to their estimates, the City is projected to reach a population of approximately 132,579 by the end of 2015. While the demand for City of Denton services continues to increase, revenue growth has slowed over the past year due to a continued weak national economy. Sales tax revenue, the second largest revenue source for the City's General Fund, declined by 4.54% over the prior year's receipts in FY 2008-09. For fiscal year 2009-10, sales tax revenue is projected to decline by an additional 5% over fiscal year 2008-09 receipts. While the City's tax base continues to grow, the pace of the expansion has also slowed. The Denton Central Appraisal District's fiscal year 2008-09 certified appraisal roll shows an increase of 3.31% over the fiscal year 2007-08 certified value. This is substantially lower than the 11.91 % growth realized in FY 2007-08, but it is an increase of 15.6% over the fiscal year 2006-07 value. The appraised values for FY 2009-10 have also increased by 0.58% compared to FY 2008-09 values. ii Public safety continues to be a major initiative for the City. In order to sustain current service levels, the Police Department received increased funding for tasers, cell phones, Investigative Services Bureau vehicles, and a new canine unit. The Fire Department budget for FY 2008-09 includes additional funding for materials to support an automatic external defibrillator and CPR program. In addition, the City also recently completed a Public Safety Training Facility Master Plan and is tentatively planning construction in late FY 2011 or FY 2012. The City also continues to emphasize community service programs. The FY 2008-09 budget includes additional Library funding to enhance collection materials and update circulation software with new technology. In addition, the City provided increased funding to the substandard structures program in order to address neighborhood decline and promote neighborhood stability. Financial Information The City's management team is responsible for establishing and maintaining internal controls designed to ensure that the assets of the City are protected from loss, theft, or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with generally accepted accounting principles. Internal controls are designed to provide reasonable but not absolute assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of the controls should not exceed the benefits likely to be derived and (2) the valuation of cost and benefits requires estimates and judgments by management. Single Audit As a recipient of federal and state grant awards, the City is also responsible for ensuring that adequate internal controls are in place to ensure compliance with applicable state and federal laws and regulations. These controls are subject to periodic evaluation by management. As a part of the City's single audit, tests are conducted to determine that the City has complied with applicable laws and regulations related to federal awards. Budgetary Controls The City maintains budgetary controls to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General Fund, Special Revenue Funds (Recreation Fund, Police Confiscation Fund, Tourist and Convention Fund, Traffic Safety Fund, and Gas Well Revenues Fund), Debt Service Fund, Enterprise Funds, and Internal Service Funds are included in the annual operating budget. A capital improvement plan is also approved each year. The level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is established at the individual fund level. The City maintains an encumbrance accounting system as one technique of accomplishing budgetary controls. As demonstrated by the statements and schedules included in the financial section of this report, the City continues to meet its responsibility for sound financial management. Enterprise Operations The City's enterprise fund operations consist of a utility system and solid waste operations. The City's utility system provides electric, water and wastewater services (including drainage operations). Electric operations did not increase base rates in FY 2008-09. Retail water rates were increased by 3%, and wastewater operations did not increase retail or wholesale customers' rates. Solid Waste increased the single-family residential recycling rate by $0.30 per month. Residential refuse rates for carts, and other fees, were also increased by various amounts due to increasing costs of providing these services. Internal Service Operations The internal service operations consist of the Materials Management, Fleet Services, Risk Retention, Health Insurance Fund, and Technology Services funds. The Materials Management Fund accounts for the financing of goods provided by the Warehouse to other City departments. The Fleet Services Fund accounts for the financing of goods and services provided by the municipal garage to other departments within the City. The Risk Retention Fund accounts for the accumulation of resources for the payment of workers' compensation, general liability claims, and insurance policies. The Health Insurance Fund accounts for administration of the self insurance program in the City. The Technology Services Fund provides computer-programming services and systems iii analysis. Reprographics, which is part of the Technology Services Fund, provides imaging, print shop, and office services to City departments. Fiduciary Operations -Agency Funds The Agency Funds consist of Payroll and Other Agency Funds. The Payroll Fund is responsible for the collection and payment of the City's payroll and associated liabilities. Other Agency Funds account for various accumulations of resources for non-City entities. Debt Administration The City has developed a plan for issuing annual General Obligation Bonds that are approved by voters in a capital improvements plan. Certificates of Obligation are used in accordance with the City Debt Issuance Policy to finance facilities, vehicles, equipment, or any other approved purpose. Cash Management The City follows an active program of cash management, keeping all temporarily idle funds in interest-bearing accounts. These accounts are in the form of money market mutual (government-based) funds, U.S. Treasury issues, and federal government agency instrumentalities. On September 30, 2009, the annualized yield on investments was 1.63 percent, compared to 3.07 percent and 4.47 percent for the same period in 2008 and 2007, respectively. Funds available for investment at September 30, 2009 were $288.5 million, which is a decrease from $333.9 million in 2008 and a decrease from $312.4 million in 2007. The City's investment policy is to safeguard assets with a minimal amount of risk, while maintaining the necessary level of liquidity and maximizing the yield on investments. Accordingly, all of the City's deposits are either insured by the Federal Deposit Insurance Corporation or are collateralized by governmental securities. A third-party financial institution in the City of Denton's name holds all collateral for deposits. An outside trustee appointed by the City holds the investments of the Deferred Compensation Plan, in which the City participates, separately from those of other City funds. State statutes authorize the City to invest in obligations of the U.S. Treasury and U.S. agencies; obligations of the State of Texas and related agencies; fully collateralized repurchase agreements; local government investment pools; SEC- registered no-load, money market mutual funds; fully collateralized or insured certificates of deposit; and municipal securities of any state rated "AA" or above by a nationally recognized rating service. Risk Management The City has maintained a very aggressive program to increase safety awareness and training. Incentive programs, transitional duty, medical-case management, and cost containment should continue to contain workers' compensation expenditure growth in the future. Independent Audit The City Charter requires an independent audit of the accounts of the City by an independent auditor. The accounting firm of Weaver, LLP was selected by the City Council to perform the annual audit. In addition to meeting the requirements set forth in the City Charter, the audit was also designed to meet the requirements of the Single Audit Act Amendments of 1996 and related OMB Circular A-133 . Awards The Government Finance Officers' Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2008, for the twenty-fourth consecutive year. In order to be awarded the Certificate of Achievement in Financial Reporting, the City must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report satisfies both generally accepted accounting principles and applicable legal requirements. The Certificate of Achievement is held for a period of one year only. We believe our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement requirements, and we are submitting it to GFOA to determine its eligibility for another certificate. The City also received the GFOA award for Distinguished Budget Presentation for its fiscal year 2008-09 Annual Budget. In order to qualify for the Distinguished Budget Presentation Award, the City's budget document was judged according to its compliance with specific guidelines established by GFOA. These guidelines help ensure iv that Denton's budget is distinguished as an operations guide, financial plan, policy document, and communications device. The City has submitted its fiscal year 2009-10 Annual Budget to GFOA to determine its eligibility for another certificate. We believe it continues to meet the Distinguished Budget Presentation Award criteria. In 2009, the City's Purchasing Department earned the Excellence in Procurement Award from the National Purchasing Institute, Inc. (NPI) for 2009 for the twelfth year in a row. This award is achieved by those organizations that demonstrate excellence in procurement by achieving a high score on standardized criteria designed to measure innovation, professionalism, productivity, and leadership. NPI represents purchasing officials employed by national, state, and local governments; educational institutions; and tax-supported and public entities throughout the country. Acknowledgements We would like to thank the City Council for their strong leadership and support that helped make the presentation of this report possible. We would also like to thank the Finance staff, department directors, division heads and especially the Accounting Division staff for their diligent efforts in the preparation of the annual financial report. Jon Fortune Bryan Langley Assistant City Manager Director of Finance v CITY OF DENTON, TEXAS ORGANIZATIONAL CHART SEPTEMBER 30, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Citizens City Council Boards, Commissions, & Committees City Attorney Municipal Judge Internal Audit City Manager Economic Development/ Human Resources Downtown Development Administrative Services City Manager's Office City Secretary Reprographics Public Communications Office Assistant City Manager Assistant City Manager Assistant City Manager Finance Electric Operations Fire Solid Waste Operations Library Accounting/Budget Water Operations Parks & Recreation Municipal Court Wastewater Operations Police Treasury/Debt Streets Materials Management Animal Services Traffic/Street Lighting Risk Management Planning Transportation/Airport Customer Service Building Inspections Facilities/Fleet Code Enforcement Tech Services Community Development vi • i ® • i es to to a its e e sine n ci e a fart isc e to e , e ificts of c isve et ar cisce i ' ancial e art' is presents y the ave et iacs ~csrs ssaciatian of the nits fates n as a to aver snt units an lic e lays retire st sse s ass ca reensivs a al financial re arts s) achieve the highest stars arils in gave et accounting ~nancial re in . C~ ~~®C ~ n srar~ ~ Q N ~r~~0 s 1 t xec five iectar CITY OF DENTON, TEXAS List of Principal Officials September 30, 2009 ELECTED OFFICIALS Title Name Mayor Mark Burroughs Mayor Pro-Tem Pete Kamp Councilmember Jim Engelbrecht Councilmember Dalton Gregory Councilmember Charlye Heggins Councilmember Joe Mulroy Councilmember Chris Watts CITY OFFICIALS Title Name City Manager George C. Campbell Assistant City Manager Howard Martin Assistant City Manager Jon Fortune Assistant City Manager Fred Greene Director of Finance Bryan Langley City Attorney Anita Burgess Municipal Judge Robin Ramsay City Secretary Jennifer Walters viii INDEPENDENT AUDITOR'S REPORT To The Honorable Mayor and Members of City Council City of Denton, Texas We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Denton, Texas (the City) as of and for the year ended September 30, 2009, which collectively comprise the City's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. INe believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Denton, Texas, as of September 30, 2009, and the respective changes in financial position, and, where applicable, cash flows, thereof and the budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated February 8, 2010, on our consideration of the City of Denton's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grants. The purpose of that report is to describe the scope of our testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. The accompanying Management's Discussion and Analysis (on pages 3 through 10), the schedules of TMRS funding progress and contributions and Denton firemen's relief and retirement plan funding progress and contributions (on page 61), and the schedule of other post employment benefits (on page 62) are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. AM INDEPENDENT WEAVER AND TIDYYELL LLR DALLAS MEMBER DF BAKER TILLY CERTIFIED Pl1BUCA0C4l1NTANTSAND CONSULTANTS 122P1 MERIT QRIYE, SMITE 1~OQ, DALLAS, Tai 7521 INTERNATIDNAL WWW.WEAVERLLFGQM P:(972~ 49O 190 F:(97~ 70~ 8321 City of Denton February 8, 2010 Page 2 Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The introductory section, combining and individual fund financial statements and schedules, capital assets used in the operation of governmental funds schedules, the statistical section, and the other supplementary information as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual fund financial statements and schedules, capital assets used in the operation of governmental funds schedules, and the other supplementary information have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated. in all material respects in relation to the basic financial statements taken as a whole. The introductory section and the statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and accordingly, we express no opinion on them. WJY~/VKI~ a4 JQ•~• 1 . WEAVER AND TIDWELL, L.L.P. Dallas, Texas February 8, 2010 CITY OF DENTON, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30, 2009 The City of Denton's Management's Discussion and Analysis is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the City's financial activity, (c) identify changes in the City's financial position (its ability to address the next and subsequent years' challenges), (d) identify any material deviations from the financial plan (the approved budget), and (e) identify individual fund issues or concerns. Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current year's activities, resulting changes and currently known facts, please read it in conjunction with the Transmittal Letter (beginning on page i) and the City's financial statements (beginning on page ll FINANCIAL HIGHLIGHTS • The assets of the City exceeded its liabilities at the close of the fiscal year ended September 30, 2009 by $567,980,201 (net assets). Of this amount, $148,078,888 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors. • The City's total net assets increased by $22,915,733. This increase can be attributed to the net revenue of the governmental activities, business-type activities and the contribution of capital assets by developers. • As of September 30, 2009, the City's governmental funds reported combined fund balances of $76,984,298, a decrease of $17,775,823 in comparison with the prior fiscal year, due to lower sales tax, franchise fees, lower interest income and no new proceeds from the issuance of long-term debt. Approximately 51.0% of the $76,984,298, or $39,230,404, is available for spending at the government's discretion (unreserved fund balance). • At the end of the fiscal year, the unreserved and undesignated fund balance for the General Fund was $22,794,955, or 25.52% of budgeted general fund expenditures. • The City's total noncurrent liabilities decreased by $23,537,557 during the fiscal year. The primary reason for the decrease was the issuance of $7.5 million of general obligation refunding bonds, along with the normal pay down of general obligation bonds and certificates of obligation bonds of $11.9 million, and the normal pay down of revenue bonds of $15.5 million. OVERVIEW OF THE FINANCIAL STATEMENTS The Management's Discussion and Analysis is intended to serve as an introduction to the City of Denton's basic financial statements. The City's basic financial statements comprise three components: (1) government- wide financial statements, (2) fund financial statements and (3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the City's finances in a manner similar to private-sector business. The statement of net assets presents information on all of the City's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. The statement of activities presents information showing how the City's net assets changed during the most recent fiscal year. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but not used vacation leave). Both the statement of net assets and the statement of activities are prepared using the accrual basis of accounting as opposed to the modified accrual basis. In its Statement of Net Assets and the Statement of Activities, the City is divided between two kinds of activities: 3 CITY OF DENTON, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (continued) SEPTEMBER 30, 2009 • Governmental activities. Most of the City's basic services are reported here, including police, fire, libraries, development, public services and operations, public works, building inspection, technology services and general administration. Property taxes, sales taxes and franchise fees finance most of these activities. • Business-type activities. The City charges a fee to customers to cover the cost of services it provides. The City's utility systems (electric, water and wastewater) and solid waste activities are reported here. The government-wide financial statements can be found on pages 11-13 of the report. Fund Financial Statements. A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. Fund financial statements provide detailed information about the most significant funds, not the City as a whole. Some funds are required to be established by state law or bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants and other monies. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. • Governmental funds. The majority of the City's basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method identified as the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City's general government operations and the basic services it provides. Governmental fund information helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the City's programs. By comparing information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements, readers may better understand the long-term impact of the government's near-term financing decisions. The relationship or differences between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds are detailed in a reconciliation following the fund financial statements. The City of Denton maintains eleven governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and changes in fund balances for the general fund, debt service fund and capital projects fund, all of which are considered to be major funds. Data from the other eight governmental funds are combined into a single, aggregated presentation. Individual fund data for seven of these non-maj or governmental funds along with an aggregate of all other is provided in the form of combining statements elsewhere in this report. • Proprietary funds. The City charges customers for certain services it provides, whether to outside customers or to other units within the City. These services are generally reported in proprietary funds. Proprietary funds are reported in the same manner that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the City's enterprise funds (a component of proprietary funds) are similar to the business-type activities that are reported in the government-wide statements but provide more detail and additional information, such as cash flows. The internal service funds (the other component of proprietary funds) are utilized to report activities that provide supplies and services for the City's other programs and activities, such as the City's municipal warehouse, the City's self insurance fund and equipment maintenance function. Because these services benefit both governmental and business-type functions, they have been included in both the governmental and business-type activities in the government-wide financial statements. The City of Denton maintains four enterprise funds. The City uses enterprise funds to account for its electric, water and wastewater systems and solid waste operations. The funds provide the same type of information as the government-wide financial statements, only in more detail and include some of the internal service fund-type activity. The City considers all enterprise funds to be major funds. 4 CITY OF DENTON, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (continued) SEPTEMBER 30, 2009 • Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds. Agency funds are a component of fiduciary funds. Agency funds differ from other fiduciary funds in that they do not typically involve a formal trust agreement. Agency funds are used to account for situations where the City's role is purely custodial, such as receipt, temporary investment and remittance of fiduciary resources to individuals, private organizations, or other governments. The City maintains three fiduciary funds which include the payroll fund, developers' escrow fund, and other agency funds. The City uses agency funds to account for the collection and payment of the City's payroll and associated liabilities, employee-purchased insurance and other similar relationships. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 29 - 60 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS As of September 30, 2009, the City's combined net assets were $567,980,201, of which $142,309,765 can be attributed to governmental activities and $425,670,436 attributed to business-type activities. This analysis focuses on the net assets (Table 1) and changes in net assets (Table 2) of the City's governmental and business- type activities. The largest portion of the City's net assets (67.7%) reflects its investment in capital assets (e.g., land, building, machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the City's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. Table 1 Net Assets (in thousands) Governmental Business-type Activities Activities Total 2009 2008 2009 2008 2009 2008 Current and other assets $ 97,400 $ 113,773 $ 238,660 $ 263,793 $ 336,060 $ 377,566 Capital assets, net of accumulated depreciation 198,891 189,855 510,132 470,283 709,023 660,138 Total assets 296,291 303,628 748,792 734,076 1,045,083 1,037,704 Long-term liabilities outstanding 129,944 137,360 273,317 289,436 403,261 426,796 Other liabilities 24,037 25,163 49,805 40,681 73,842 65,844 Total liabilities 153,981 162,523 323,122 330,117 477,103 492,640 Net assets: Invested in capital assets, net of related debt 102,110 102,040 282,463 263,326 384,573 365,366 Restricted 1,948 1,454 33,380 33,088 35,328 34,542 Unrestricted 38,252 37,611 109,827 107,545 148,079 145,156 Total net assets $ 142,310 $ 141,105 $ 425,670 $ 403,959 $ 567,980 $ 545,064 5 CITY OF DENTON, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (continued) SEPTEMBER 30, 2009 Governmental activities increased the City's net assets by $1,204,199 and business-type activities increased the City's net assets by $21,711,534. The key elements of these increases are contained in Table 2. Table 2 Changes in Net Assets (in thousands) Governmental Business-type Activities Activities Total 2009 2008 2009 2008 2009 2008 Revenue: Program Revenue: Charges for services $14,925 $13,917 $199,308 $209,156 $214,233 $223,073 Operating grants and contributions 2,281 3,306 - - 2,281 3,306 Capital grants and contributions 3,641 7,308 8,100 5,742 11,741 13,050 General Revenue: Property tax 43,187 41,500 - - 43,187 41,500 Sales tax 20,467 21,441 - - 20,467 21,441 Franchise tax 15,670 16,197 - - 15,670 16,197 Hotel occupancy tax 1,239 1,370 - - 1,239 1,370 Beverage tax 339 320 - - 339 320 Bingo tax 23 24 - - 23 24 Investment Income 2,413 3,287 6,075 7,818 8,488 11,105 Miscellaneous 3,328 4,214 558 195 3,886 4,409 Total revenue 107,513 112,884 214,041 222,911 321,554 335,795 Expenses: General government 27,482 26,409 - - 27,482 26,409 Public safety 45,368 43,427 - - 45,368 43,427 Public works 15,816 15,448 - - 15,816 15,448 Parks and recreation 12,755 12,927 - - 12,755 12,927 Interest on long-term debt 5,733 5,373 - - 5,733 5,373 Electric - - 124,902 138,791 124,902 138,791 Water - - 28,636 26,226 28,636 26,226 Wastewater - - 19,909 19,413 19,909 19,413 Solid waste - - 18,037 17,066 18,037 17,066 Total expenses 107,154 103,584 191,484 201,496 298,638 305,080 Increase in net assets before transfers 359 9,300 22,557 21,415 22,916 30,715 Transfers 846 323 (846) (323) - - Increase in net assets 1,205 9,623 21,711 21,092 22,916 30,715 Net assets at beginning of year - 141,105 131,482 403,959 380,869 545,064 512,351 Prior period adjustment - - - 1,998 - 1,998 Net assets at beginning of year-as restated 141,105 131,482 403,959 382,867 545,064 514,349 Net assets at end of year $142,310 $141,105 $425,670 $403,959 $567,980 $545,064 Governmental activities. The most significant governmental activities expense was in providing public safety, which incurred expenses of $45,368,783. These expenses were funded by revenues collected from a variety of sources, with the largest being from property taxes, which are $43,187,433 for the fiscal year ended September 30, 2009. The most significant portion of public safety is the cost of personnel, which totaled $36,562,235. Other significant governmental activities expense for the City includes general government, which incurred $27,482,131 in expenses, of which $16,433,177 represented personnel charges. 6 CITY OF DENTON, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (continued) SEPTEMBER 30, 2009 Increased expenses for governmental activities includes an increase of $ l , l million for general government due to personnel costs, an increase of $1.8 million in public safety due to personnel cost, and interest on long-term debt increased $0.4 million. The $5.4 million decreased revenues in governmental activities are mainly due to a decrease of $1.0 million in operating grants and contributions, $3.7 million in capital grants and contribution, $1.0 million in lower sales tax due to a slowing local economy in the final three months of the fiscal year, $0.5 million in lower franchise tax due to lower energy costs, $0.9 million in lower investment income, offset by $1.7 million increased property tax due to higher property values in 2009. Business-type activities. Business-type activities increased the City's net assets by $21,711,534, accounting for 94.8% of the growth in the entity-wide net assets. A key element of this increase is capital contributions, emerging as a major revenue source for the Water and Wastewater funds during the current fiscal year, producing $8,099,722 in revenue. Contributions of assets arise from new property development within the City. Charges for Electric services decreased $10.1 million due to Energy Cost Adjustment (ECA) rate decreases associated with $13.4 million in lower energy costs. Water and Wastewater collected $3.3 million and $1.2 million respectively in Impact fees. Solid Waste experienced increased revenues of 10.6%, or $1.7 million, as a result of varying rate increases to solid waste customers. Interest income decreased $1.7 million to $6.1 million during FY 2009 for all Business-type funds. Water expense increase reflects additional maintenance costs of $ l . l million and administrative costs of $0.8 million. FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of resources available to spend. Such information is useful in assessing the City's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. As of the end of the current fiscal year, the City's governmental funds reported a combined ending fund balance of $77.0 million, a decrease of $17.8 million in comparison with the prior year. Approximately $39.2 million constitutes unreserved, undesignated fund balance, which is available for spending at the government's discretion. The remainder of the fund balance is reserved to indicate that it is not available for new spending because it has already been committed 1) to purchase or construct capital assets ($3 5.3 million), or 2) to pay debt service ($2.4 million). The General Fund is the chief operating fund of the City. At September 30, 2009, the unreserved and undesignated fund balance of the General Fund was $22.8 million, or 25.52% of budgeted general fund expenditures. The fund balance of the General Fund decreased by $2.6 million during the current fiscal year. The change in fund balance is primarily due to expenditures, including other financing uses, of $81.7 million and $79.1 million of revenue, including other financing sources. Revenues were lower compared to the previous year due to lower franchise fees by $0.5 million, lower fines and forfeitures by $0.3 million, and lower investment revenues of $0.4 million. Expenditures were higher compared to the previous year due to $2.3 million of additional general government personnel costs and $2.5 million of additional public safety personnel costs. The entire balance of the capital projects fund is reserved for capital construction and acquisition. At the end of the fiscal year, the capital projects fund has a fund balance of $35.3 million, a decrease of $22.6 million. In 2009, the City did not receive any proceeds from the issuance of debt while expending $20.4 million on construction and acquisition, and transferring $6.5 million of gas well proceeds to special revenue funds. In addition, the capital projects fund received $1.2 million in interest income, transfers in from the gas well fund of $1.6 million, and other government contributions of $1.2 million. 7 CITY OF DENTON, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (continued) SEPTEMBER 30, 2009 The debt service fund has a total fund balance of $2.4 million all of which is reserved for the payment of debt service. The overall increase in the debt service fund balance was $0.5 million. Proprietary funds. The City's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Unrestricted net assets in Electric, Water, and Wastewater at September 30, 2009 are $75.1 million, $16.6 million, and $12.3 million respectively. Solid Waste has unrestricted net assets of $2.2 million. The results reflect an increase of unrestricted net assets in the Electric fund of $3.5 million, a decrease in the Water fund of $2.1 million, an increase in the Wastewater fund of $0.4 million, and a decrease of $0.1 million in Solid Waste. Other factors concerning the finances of these funds have already been addressed in the discussion of the City of Denton's business-type activities. BUDGETARY HIGHLIGHTS During fiscal year 2008-2009, several formal amendments to adjust the City's of Denton Annual Program of Services was approved by Council. Council provided for the increased costs of goods sold in the Materials Management Fund by $2.0 million due to construction projects being built by the Electric Utility. Council added $0.2 million to the Technology Service Fund for upgraded phone system and $0.4 million to the Risk Retention Fund budget for litigation claims and attorney fees. An additional $0.2 million costs to the PEG Fund for television improvements was also approved. Council also provided an additional $1.3 million for costs associated with runway construction in the Airport Gas Well Fund. GENERAL FUND HIGHLIGHT For fiscal year 2008-09, General Fund actual expenditures (including transfers) on a budgetary basis were $85.8 million compared to the budget of $89.3 million. The $3.5 million variance was primarily due to reduced costs of $1.8 million for the general government, $0.6 million due to reduced costs for public safety, reduced costs of $0.5 million in public works and $0.8 million due to reduced costs for parks and recreation. Actual revenue (including transfers and sale of capital asset) on a budgetary basis was $83.3 million compared to the original budget of $85.3 million. Of the $2.0 million revenue variance, approximately $0.4 million was due to increased ad valorem tax collection, $1.2 million for decreased sales tax collection, $0.5 million for decreased franchise fees due to lower energy costs, $0.2 million for decreased cable franchise fees, and $0.6 million decreased for building and electrical permit fees make up most of the revenue variance. Over the years, the Denton City Council has followed a policy of maintaining a general fund balance in order to plan for unforeseen emergencies and place the City in a more favorable position. In 1997-1998, the policy level was increased from 10% to 12.5% of general fund expenditures. In 1999-2000 the percentage was increased to 13%. Council raised the policy in 2004-2005 to 13.5%, and in 2005-2006 to 14.0%. The 2006-07 adopted budget increased the policy level to 14.5%. In 2008 the Audit/Finance Committee recommended maintaining a fund balance level of 12% to 15% rather than an absolute reserve percentage. In this way, the City will be able to maintain budget flexibility in responding to fluctuations in economic cycles that may arise in the future. The City of Denton's unreserved and undesignated fund balance at September 30, 2009 is $22.8 million, or 25.52% of budgeted expenditures. Below is a listing of the ending unreserved balances for the past two years, as well as fiscal year 2008-09 projected and actual. For those years where the actual ending balance has exceeded the policy level, the following year's budget has included utilization of that amount for one-time expenditures. By using the fund balance for one-time expenditures only, the financial impact on future budgets is eliminated. Actual Actual Adopted Projected Actual 913 0/07 913 0/0 8 913 0/09 913 0/09 913 0/09 Unreserved balances $18,199,161 $25,253,797 $18,928,455 $21,846,651 $22,794,955 of total budgeted expenditures 23.68% 30.51% 21.19% 24.50% 25.52% Policy level 14.50% 12-15.00% 12-15.00% 12-15.00% 12-15.00% The largest revenue source of the General Fund's budget was the ad valorem tax. Denton's ad valorem tax rate is comprised of two components. The first is the operations and maintenance component that is used to 8 CITY OF DENTON, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (continued) SEPTEMBER 30, 2009 calculate revenue for the City's General Fund operations. The second component is the debt portion that is used to calculate revenue to pay the City's general debt service obligations. The Denton Central Appraisal District's certified appraisal roll shows an increase of 3.31 % over the prior year certified value and 2.74% over the final 2007 value (including supplements). This increase consisted of $180.7 million of new value added for 2008 and a $21.1 million increase in value for property on the tax rolls in 2007. The 2008-09 ad valorem tax rate remained the same as the prior year at $0.66652 per $100 of valuation. CAPITAL ASSET AND DEBT ADMINISTRATION Capital assets. At the end of fiscal year 2009, the City had $709,022,663 invested in a broad range of capital assets, including police and fire equipment, buildings, park facilities, roads, bridges and water and sewer lines (see Table 3 below). This amount represents a net increase (including additions and deductions) of $48,884,649, or 7.4% over the prior fiscal year. Table 3 Capital Assets at Year-end (Net of Accumulated Deareciation, in Thousands) Governmental Business-type Activities Activities Totals 2009 2008 2009 2008 2009 2008 Land $ 12,923 $ 7,929 $ 10,407 $ 10,403 $ 23,330 $ 18,332 Landfill improvements - - 849 166 849 166 Buildings and improvements 41,240 42,612 5,200 5,359 46,440 47,971 Plant, machinery and equipment 18,503 20,940 115,930 112,822 134,433 133,762 Water rights - - 55,706 56,403 55,706 56,403 Infrastructure 91,736 94,805 235,806 231,744 327,542 326,549 Construction in progress 34,489 23,569 86,234 53,386 120,723 76,955 Total capital assets $198,891 $189,855 $510,132 $470,283 $709,023 $660,138 This year's maj or additions included: Description Amount Southwest Park Land-Bonnie Brae &Allred-196.467 Acres $ 4,993,449 Denton Station I Inman Street-Development Infrastructure 1,794,888 Vintage Offsite Water &Sewer-Development Infrastructure 1,567,060 Longhorn Cove-Development Infrastructure 1,153,720 Water Meters 948,525 Mingo Street Improvements 926,506 Denison(Headlee-Sherman) 851,318 Cypress Campus at Denton Station-Development Infrastructure 828,622 Fastenal-Distribution Center & Airport Road-Development Infrastructure 774,679 Library Books 688,871 Hickory Creek Plaza-Development Infrastructure 686,886 Wind River Retail Project-Development Infrastructure 661,905 Spencer Square-Development Infrastructure 595,141 Hickory Creek Retail-Development Infrastructure 438,050 Headlee(Carroll-Bolivar) 378,069 Water Taps 344,544 ELAP-Shady Oaks Overlay 3 3 5,924 Total $ 17,968,157 Additional information on the City's capital assets can be found in note IV. D. on pages 39 - 41 of this report. 9 CITY OF DENTON, TEXAS MANAGEMENT'S DISCUSSION AND ANALYSIS (continued) SEPTEMBER 30, 2009 Debt. At year-end, the City had $411.4 million in bonds and notes outstanding as compared to $439.1 million at the end of the prior fiscal year, a decrease of 6.3 as shown in Table 4. Table 4 Outstanding Debt at Year-end (in thousands) Governmental Business-type Activities Activities Totals 2009 2008 2009 2008 2009 2008 General obligation bonds $ 77,359 $80,815 $ 4,366 $ 4,865 $ 81,725 $ 85,680 Certificates of obligation 48,611 55,098 11,244 12,952 59,855 68,050 Revenue bonds - - 266,705 282,200 266,705 282,200 Notes - - 3,141 3,141 3,141 3,141 Total $125,970 $135,913 $285,456 $303,158 $411,426 $439,071 These amounts do not include net unamortized premiumsl(discounts) of $7,244,705 or net deferred gainl(loss) on refunding of ($8,656,116). During the current fiscal year, the City issued debt in May 2009. The new debt resulted primarily from the issuance of $7,525,000 in general obligation refunding bonds. No certificates of obligation or utility revenue bonds were issued in 2009. Moody's Investor's Service, Inc. has given the City's General Obligation Bonds and the Certificates of Obligation a rating of "Aa3." Standard and Poor's Corporation has given both the City's General Obligation Bonds and Certificates of Obligation an "AA" rating. The City's Utility Revenue Bonds carry "Al" and "A+" ratings by Moody's and Standard and Poor's, respectively. The City is permitted by Article XI, Section 5 of the State of Texas Constitution to levy taxes up to $2.50 per $100 of assessed valuation for general governmental services including the payment of principal and interest on general obligation long-term debt. The current ratio oftax-supported debt to certified assessed value of all taxable property is 2.25%. Other long-term liabilities. The City maintains a self insurance program for general liability, auto liability, public officials' liability, errors and omission liability, police professional liability, and workers' compensation. Private insurance companies cover claims for property loss over $50,000 per occurrence and for workers' compensation and liability over $500,000 per occurrence. The City has a reserve for claims and judgments of $3.9 million outstanding at year-end compared with $3.5 million at the end of the prior fiscal year. Other obligations include accrued vacation pay and sick leave. More detailed information about the City's long-term liabilities is presented in Note IV. G., on pages 44 - 49 of this report. ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES While growth for the Denton community is expected to be slow for the short term, demands for city services is expected to remain strong over the long term. As a result, the 2009-10 Budget includes the resources to provide City services to meet those demands. The 2009-1 o budget maintains the same ad valorem tax rate of $0.666521$100 valuation. Sales tax revenue is projected to increase 1.0%. The general fund balance reserve policy has been maintained at a range from 12% to 15% of budgeted expenditures. The 2009-10 budget includes no base rate increases for electric customers. The water budget includes no base rate revenue increase for retail or commercial customers. Water did revise the Wholesale Raw Water rate by 4.8%. No base rates changes are proposed for wastewater retail or wholesale customers. No base rate increases were adopted for Solid Waste residential or commercial customers. Other minor fee adjustments were also approved for the electric, water, and solid waste fee schedules. REQUESTS FOR INFORMATION This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Denton Finance Department, 215 E. McKinney, Denton, Texas 76201. 10 CITY OF DENTON, TEXAS Exhibit I STATEMENT OF NET ASSETS SEPTEMBER 30, 2009 Primary Governmenl Governmental Business-type Activities Activities Total ASSETS: Current assets: Cash, cash equivalents and investments, at fair value $ 49,211,713 ~ 107,169,531 $ 156,381,244 Receivables, net of allowances: Taxes 4,222,854 - 4,222,854 Accounts - 13,040,429 13,040,429 Unbilled utility service - 7,871,409 7,871,409 Interest 342,724 733,430 1,076,154 Other 3,406,855 577,943 3,984,798 Internal balances (10,228,442) 10,228,442 - Duefrom other governments 1,125,520 - 1,125,520 Inventory 8,673,412 - 8,673,412 Prepaid items 657 1,700 2,357 Deferred debt issuance costs 159,275 248,855 408,130 Total current assets 56,914,568 139,871,739 196,786,307 Noncurrent assets: Restricted assets: Cash, cash equivalents and investments, at fair value 37,562,417 96,404,119 133,966,536 Escrow deposits 1,718,134 103,210 1,821,344 Accrued interest 258,705 651,401 910,106 Deferred debt issuance costs 945,948 1,630,182 2,576,130 Capital assets not being depreciated: Land 12,922,784 10,406,777 23,329,561 Construction in progress 34,489,005 86,234,170 120,723,175 Capital assets, net of accumulated depreciation; Buildings 41,239,951 5,199,183 46,439,134 Plant, machinery and equipmenl 18,503,227 115,929,758 134,432,985 Infrastructure 91,735,892 235,805,969 327,541,861 Landfill improvements - 849,520 849,520 Water rights - 55,706,427 55,706,427 Total noncurrent assets 239,376,063 608,920,716 848,296,779 Total assets 296,290,631 748,792,455 1,045,083,086 LIABILITIES: Current liabilities: Accounts payable 5,322,604 16,530,791 21,853,395 Deposits - 4,018,203 4,018,203 Accrued interest 785,140 85,493 870,633 Due to other governments 254 - 254 Noncurrent liabilities due within one year 15,828,544 20,973,250 36,801,794 Other liabilities 540,669 - 540,669 Unearned revenue 390,795 1,956,984 2,347,779 Payable from restricted assets: Accounts payable 1,037,349 1,501,587 2,538,936 Retainage payable 131,717 499,196 630,913 Accrued interest - 4,239,531 4,239,531 Total current liabilities 24,037,072 49,805,035 73,842,107 Noncurrent liabilities: Noncurrent liabilities due in more than one year 129,943,794 273,316,984 403,260,778 Total noncurrent liabilities 129,943,794 273,316,984 403,260,778 Total liabilities 153,980,866 323,122,019 477,102,885 NET ASSETS: Invested in capital assets, net of related debt 102,110,134 282,463,031 384,573,165 Restricted: Restricted for debt service 1,947,553 30,119,556 32,067,109 Restricted for capital acquisition - 3,261,039 3,261,039 Unrestricted 38,252,078 109,826,810 148,078,888 Total net assets ~ 142,309,765 ~ 425,670,436 ~ 567,980,201 The notes to the basic financial statements are an integral part of this statement. 11 CITY OF DENTON, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2009 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Primary government: Governmental activities: General government $ 27,482,131 $ 4,792,856 $ 1,787,521 $ 283,320 Public safety 45,368,783 6,554,619 306,467 12,326 Public works 15,816,065 586,377 - 3,345,650 Parks and recreation 12,755,037 2,990,921 187,148 - Interest expense 5,733,268 - - - Total governmental activities 107,155,284 14,924,773 2,281,136 3,641,296 Business-type activities: Electric system 124,901,262 128,511,236 - - Water system 28,636,190 30,067,774 - 2,672,105 Wastewater system 19,909,229 22,342,174 - 5,427,617 Solid waste 18,036,331 18,386,616 - - Total business-type activities 191,483,012 199,307,800 - 8,099,722 Total primary government $ 298,638,296 $ 214,232,573 $ 2,281,136 $ 11,741,018 General revenues: Taxes: Property tax Sales tax Franchise fees Hotel occupancy tax Beverage tax Bingo tax Investment income Miscellaneous Transfers Total general revenues and transfers Change in net assets Net assets at beginning of year Net assets at end of year The notes to the basic financial statements are an integral part of this statement. 12 Exhibit II Net (Expense) Revenue and Changes in Net Assets Primary Government Governmental Business-type Activities Activities Total $ (20,618,434) $ - $ (20,618,434) (38,495,371) - (38,495,371) (11,884,038) - (11,884,038) (9,576,968) - (9,576,968) (5,733,268) - (5,733,268) (86,308,079) - (86,308,079) - 3,609,974 3,609,974 - 4,103,689 4,103,689 - 7,860,562 7,860,562 - 350,285 350,285 - 15,924,510 15,924,510 (86,308,079) 15,924,510 (70,383,569) 43,187,433 - 43,187,433 20,466,772 - 20,466,772 15,669,981 - 15,669,981 1,239,261 - 1,239,261 338,700 - 338,700 22,915 - 22,915 2,413,339 6,075,453 8,488,792 3,327,758 557,690 3,885,448 846,119 (846,119) - 87,512,278 5,787,024 93,299,302 1,204,199 21,711,534 22,915,733 141,105,566 403,958,902 545,064,468 $ 142,309,765 $ 425,670,436 $ 567,980,201 13 CITY OF DENTON, TEXAS Exhibit III BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2009 Other Total General Capital Governmental Governmental Fund Debt Service Proiects Funds Funds ASSETS: Cash, cash equivalents and investments, at fair value $ 21,539,176 $ 2,363,828 $ 36,351,451 $ 15,920,750 $ 76,175,205 Receivables, net of allowances for uncollectibles: Taxes 3,870,167 352,687 - - 4,222,854 Accrued interest 155,081 16,178 251,192 106,436 528,887 Other 2,289,138 - - 968,290 3,257,428 Interfund receivables 128,534 - - 30,938 159,472 Due from other governments 433,215 - - 692,305 1,125,520 Total assets ~ 28.415.311 ~ 2.732.693 ~ 36.602.643 ~ 17.718.719 ~ 85.469.366 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable 3,256,647 - 1,131,320 344,880 4,732,847 Retaina~e payable - - 131,717 - 131,717 Interfund parables - - - 30,938 30,938 Due to other governments 254 - - - 254 Other liabilities 540,669 - - - 540,669 Deferred revenues 1,822,786 318,405 - 907,452 3,048,643 Total liabilities 5,620,356 318,405 1,263,037 1,283,270 8,485,068 FUND BALANCES: Reserved for: Debt service - 2,414,288 - - 2,414,288 Capital projects - - 35,339,606 - 35,339,606 Unreserved, undesignated reported in: General fund 22,794,955 - - - 22,794,955 Special revenue funds - - - 16,435,449 16,435,449 Total fund balances 22,794,955 2,414,288 35,339,606 16,435,449 76,984,298 Total liabilities and fund balances ~ 28.415.311 ~ 2.732.693 ~ 36.602.643 ~ 17.718.719 ~ 85.469.366 The notes to the basic financial statements are an integral part of this statement. 14 CITY OF DENTON, TEXAS Exhibit IV RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS AS OF SEPTEMBER 30, 2009 Total fund balances -governmental funds (Exhibit III) $ 76,984,298 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. 198,890,859 Certain receivables will be collected next year but are not available soon enough to pay for the current period's expenditures and therefore are reported as deferred revenues in the funds. 2,657,848 An internal charge to business-type activities is not recorded at the fund level. (3,627,465) Several internal service funds are used by the City's management. The assets and liabilities of the internal service funds are included with governmental activities. Total assets of internal service funds $ 28,147,053 Less: Deferred debt issuance costs (27,323) Less: Capital assets reported above (6,906,633) Less: Total liabilities of internal service funds (19,592,368) Liabilities reported below 6,428,918 8,049,647 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-term liabilities at year-end consist of: General obligation bonds payable $ (77,358,650) Certificates of obligation payable (48,611,150) Bond (premiums)Idiscounts (1,658,410) Deferred loss on refunding 1,017,734 Deferred charges for issuance costs 1,105,223 Accrued interest on the bonds (785,140) Capital leases payable (2,769,671) Municipal pension obligation (1,095,893) Other post employment benefits liability (1,048,215) Compensated absences (9,441,250) (140,645,422) Total net assets of governmental activities (Exhibit I) $ 142,309,765 The notes to the basic financial statements are an integral part of this exhibit. 15 CITY OF DENTON, TEXAS Exhibit V STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009 Other Total General Capital Governmental Governmental Fund Debt Service Projects Funds Funds REVENUES: Taxes $ 49,769,861 $ 14,038,735 $ - $ 1,239,261 $ 65,047,857 Licenses and permits 1,265,733 - - - 1,265,733 Franchise fees 15,669,981 - - - 15,669,981 Fines and forfeitures 4,691,420 - - 281,485 4,972,905 Fees for services 5,888,390 - - 1,707,050 7,595,440 Investment revenue 744,122 113,737 1,171,253 386,705 2,415,817 Intergovernmental 718,453 - 789,866 2,541,120 4,049,439 Miscellaneous 229,599 247 1,224,007 1,730,038 3,183,891 Total revenues 78,977,559 14,152,719 3,185,126 7,885,659 104,201,063 EXPENDITURES: Current: General government 21,318,437 - 176,526 3,809,074 25,304,037 Public safety 41,999,464 - 27,079 513,880 42,540,423 Public works 6,738,327 - 14,987 - 6,753,314 Parks and recreation 10,016,114 - - 1,347,467 11,363,581 Capital outlay 809,004 - 20,195,247 859,396 21,863,647 Debt service: Principal retirement 223,106 9,256,137 - - 9,479,243 Advance refunding escrow - 148,575 - - 148,575 Bond issuance costs - 105,392 - - 105,392 Interest and other charges - 5,570,770 - - 5,570,770 Total expenditures 81,104,452 15,080,874 20,413,839 6,529,817 123,128,982 Excess (deficiency) of revenues over (under) expenditures (2,126,893) (928,155) (17,228,713) 1,355,842 (18,927,919) OTHER FINANCING SOURCES (USES): Refunding bonds issued - 6,120,000 - - 6,120,000 Payment to refunded bond escrow agent - (6,265,255) - - (6,265,255) Premium on debt issuance - 246,012 - - 246,012 Sale of capital assets 44,865 - - - 44,865 Transfers in 112,022 1,286,731 1,472,011 7,415,732 10,286,496 Transfers out (612,532) - (6,791,223) (1,876,267) (9,280,022) Total other financing sources (uses) (455,645) 1,387,488 (5,319,212) 5,539,465 1,152,096 Net change in fund balances (2,582,538) 459,333 (22,547,925) 6,895,307 (17,775,823) Fund balances at beginning of year 25,377,493 1,954,955 57,887,531 9,540,142 94,760,121 Fund balances at end of year $ 22,794,955 $ 2,414,288 $ 35,339,606 $ 16,435,449 $ 76,984,298 The notes to the basic financial statements are an integral part of this statement. 16 CITY OF DENTON, TEXAS Exhibit VI RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2009 Net change in fund balances -total governmental funds (Exhibit V) $ (17,775,823) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay ($21,863,647) exceeded depreciation and retirement of assets ($14,809,121= $16,386,503 total governmental minus $1,577,382 internal service portion) in the current period. 7,054,526 Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Such amounts arE recorded in the funds when considered available, 706,192 The net effect of various miscellaneous transactions involving capital asset' (i.e., sales, trade-ins and donations) is to increase net assets, 2,536,096 Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. This is the amount by which proceeds exceeded payments, 9,682,694 Fund-level financials report costs related to bonds as expenditures; however, these are deferred and amortized on the government-wide financials (186,325) Certain expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. (1,400,200) Internal service funds are used by management to charge the costs of certain activities, such as insurance and telecommunications, to individual funds. A portion of the net revenue (expense) of certain internal service funds i~ reported with governmental activities. The amount reported with business-type activities is $647,795. 587,039 Change in net assets of governmental activities (Exhibit II) $ 1,204,199 The notes to the basic financial statements are an integral part of this statement. 17 CITY OF: DENTON CITY OF DENTON, TEXAS Exhibit VII STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET TO ACTUAL GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Variance with Adjustments - Actual on a Final Budget - BudgetedAmounts Actual Budgetary Budgetary Positive Original Final Amounts Basis Basis (Negative) REVENUES: Taxes $ 50,529,028 ~ 50,529,028 $ 49,769,861 $ - ~ 49,769,861 $ (759,167) Licenses and permits 1,887,069 1,887,069 1,265,733 - 1,265,733 (621,336) Franchise fees 16,507,939 16,507,939 15,669,981 - 15,669,981 (837,958) Fines and forfeitures 5,021,495 5,021,495 4,691,420 - 4,691,420 (330,075) Fees for services 5,559,907 5,559,907 5,888,390 - 5,888,390 328,483 Investment revenue 750,000 750,000 744,122 - 744,122 (5,878) Intergovernmental 786,513 786,513 718,453 - 718,453 (68,060) Miscellaneous 212,900 212,900 229,599 - 229,599 16,699 Total revenues 81,254,851 81,254,851 78,977,559 - 78,977,559 (2,277,292) EXPENDITURES: Current: General government 28,768,014 27,268,126 21,318,437 4,118,298 25,436,735 1,831,391 Public safety 41,557,674 42,569,649 41,999,464 - 41,999,464 570,185 Public works 7,209,999 7,224,605 6,738,327 - 6,738,327 486,278 Parks and recreation 10,436,223 10,793,097 10,016,114 - 10,016,114 776,983 Capital outlay 710,935 792,195 809,004 - 809,004 (16,809) Debt service: Principal retirement 142,901 142,901 223,106 - 223,106 (80,205) Total expenditures 88,825,746 88,790,573 81,104,452 4,118,298 85,222,750 3,567,823 Excess (deficiency) of revenues over expenditures (7,570,895) (7,535,722) (2,126,893) (4,118,298) (6,245,191) 1,290,531 OTHER FINANCING SOURCES (USES): Sale of capital assets - - 44,865 - 44,865 44,865 Transfer in 4,003,027 4,003,027 112,022 4,118,298 4,230,320 227,293 Transfers out (500,000) (535,173) (612,532) - (612,532) (77,359) Total other financing sources (uses) 3,503,027 3,467,854 (455,645) 4,118,298 3,662,653 194,799 Excess (deficiency) of revenues and other sources over (under) expenditures and other uses (4,067,868) (4,067,868) (2,582,538) - (2,582,538) 1,485,330 Fund balances at beginning of year 25,377,493 25,377,493 25,377,493 - 25,377,493 - Fund balance at end of year $ 21,309,625 ~ 21,309,625 $ 22,794,955 $ - ~ 22,794,955 $ 1,485,330 Adjustments -Budgetary Basis are expenditures allocated to and reimbursed by other funds. These expenditures are recorded in the other funds' financials. The notes to the basic financial statements are an integral part of this statement. 19 CITY OF DENTON, TEXAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS AS OF SEPTEMBER 30, 2009 Business-type Activities -Enterprise Funds Electric Water Wastewater Solid System System System Waste ASSETS: Current assets: Cash, cash equivalents and investments, at fair value $ 73,707,415 $ 16,889,419 $ 10,002,776 ~ 6,569,921 Receivables, net of allowances: Accounts 9,069,295 1,767,793 1,209,179 994,162 Unbilled utility service 5,327,058 899,456 931,967 712,928 Accrued interest 504,468 115,541 68,459 44,962 Other 577,943 - - - Interfund receivables 6,138,660 90,175 55,182 - Merchandiseinventory - - - - Prepaid items 1,700 - - - Deferreddebt issuance costs 78,115 101,762 45,402 23,576 Total current assets 95,404,654 19,864,146 12,312,965 8,345,549 Noncurrent assets: Restricted assets: Cash, cash equivalents and investments, at fair value 14,816,743 58,848,066 20,975,267 1,764,043 Escrow deposit - 50,000 1,118 52,092 Accrued interest 97,670 399,809 141,849 12,073 Interfund receivables - 296,771 20,189 - Totalrestricted assets 14,914,413 59,594,646 21,138,423 1,828,208 Deferred debt issuance costs 509,869 803,614 222,699 94,000 Capital assets, net of accumulated depreciation 135,579,609 192,638,172 154,929,623 26,984,400 Total noncurrent assets 151,003,891 253,036,432 176,290,745 28,906,608 Total assets 246,408,545 272,900,578 188,603,710 37,252,157 LIABILITIES: Current liabilities: Accounts payable 15,260,024 450,296 314,801 505,670 Claims payable - - - - Compensatedabsences payable 587,634 499,363 314,862 303,540 Leases payable 18,252 - 155,079 1,164,041 Deposits 3,719,511 248,897 4,905 44,890 Accrued interest - - - 85,493 Interfund payables - - - - Unearned revenue 1,956,984 - - - Payable from restricted assets: Accounts payable 600,164 290,828 174,555 436,040 Retainage payable 122,814 199,132 177,250 - Accruedinterest 1,362,431 2,059,753 817,347 - Revenueand certificate and general obligation bonds 5,441,301 6,160,475 4,166,023 2,162,680 Total current liabilities paid from restricted assets 7,526,710 8,710,188 5,335,175 2,598,720 Total current liabilities 29,069,115 9,908,744 6,124,822 4,702,354 20 Exhibit VIII Governmental Activities - Total Internal Enterprise Service Funds Funds $ 107,169,531 ~ 9,746,450 13,040,429 - 7,871,409 - 733,430 66,707 577,943 149,427 6,284,017 - - 8,673,412 1,700 657 248,855 7,092 135,927,314 18,643,745 96,404,119 852,475 103,210 1,718,134 651,401 5,835 316,960 - 97,475,690 2,576,444 1,630,182 20,231 510,131,804 6,906,633 609,237,676 9,503,308 745,164,990 28,147,053 16,530,791 1,627,106 - 1,475,178 1,705,399 243,691 1,337,372 812,566 4,018,203 - 85,493 22,018 - 6,729,511 1,956,984 - 1,501,587 - 499,196 - 4,239,531 - 17,930,479 596,919 24,170,793 596,919 49,805,035 11,506,989 (continued) 21 CITY OF DENTON, TEXAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS AS OF SEPTEMBER 30, 2009 Business-type Activities -Enterprise Funds Electric Water Wastewater Solid System System System Waste Noncurrent liabilities: Leases payable ~ - $ - $ 405,264 $ 1,418,913 Payable from restricted assets: General obligation bonds payable - - - 3,966,239 Certificates of obligation - - - 9,572,134 Revenue bonds payable, net of premiumldiscount 82,536,098 124,947,565 48,091,558 - Deferred amount on refunding (1,859,229) (3,890,229) (882,674) (148,828) Notes payable - 3,141,222 - - Compensatedabsences payable 61,151 16,509 30,672 98,640 Claims payable - - - - Municipalpension obligation 209,576 186,832 126,734 137,306 Other post employment benefits 136,862 200,682 103,919 116,855 Landfill closure/postclosure costs - - - 4,593,213 Total noncurrent liabilities 81,084,458 124,602,581 47,875,473 19,754,472 Total liabilities 110,153,573 134,511,325 54,000,295 24,456,826 NET ASSETS: Invested in capital assets, net of related debt 49,986,604 107,266,052 114,585,036 10,625,339 Restricted for debt service 11,128,593 12,826,862 6,164,101 - Restrictedfor capital acquisition - 1,728,049 1,532,990 - Unrestricted 75,139,775 16,568,290 12,321,288 2,169,992 Total net assets ~ 136,254,972 $138,389,253 $134,603,415 $12,795,331 Adjustment to reflect inclusion of internal service fund activities related to enterprise funds. Net assets of business-type activities (Exhibit I) The notes to the basic financial statements are an integral part of this statement. 22 Exhibit VIII Governmental Activities - Total Internal Enterprise Service Funds Funds $ 1,824,177 $ 1,245,487 3,966,239 1,916,561 9,572,134 1,379,102 255,575,221 - (6,780,960) (22,803) 3,141,222 - 206,972 43,293 - 3,331,655 660,448 113,186 558,318 78,898 4,593,213 - 273,316,984 8,085,379 323,122,019 19,592,368 282,463,031 1,831,276 30,119,556 - 3,261,039 - 106,199,345 6,723,409 $ 422,042,971 $ 8,554,685 3,627,465 $ 425,670,436 (concluded) 23 CITY OF DENTON, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009 Business-type Activities -Enterprise Funds Electric Water Wastewater Solid System System System Waste OPERATING REVENUES: Utility services $ 124,832,582 $ 23,491,148 ~ 20,167,968 $ 18,055,708 Charges for goods and services - - - - Otherfees 3,678,654 3,311,370 982,635 330,908 Miscellaneous - - - - Total operating revenues 128,511,236 26,802,518 21,150,603 18,386,616 OPERATING EXPENSES: Operating expenses before depreciation 117,266,563 17,647,209 12,478,284 14,672,946 Depreciation 5,270,030 5,095,899 5,345,958 2,740,897 Total operating expenses 122,536,593 22,743,108 17,824,242 17,413,843 Operating income 5,974,643 4,059,410 3,326,361 972,773 NON-OPERATING REVENUES (EXPENSES): Investment revenue 2,823,106 2,132,989 861,823 257,535 Interest expense and fiscal charges (2,641,519) (6,026,938) (2,165,869) (778,695) Impact fee revenue - 3,265,256 1,191,571 - Gain (loss) on disposal of capital assets (60,107) 198,652 (6,106) (28,019) Other non-operating revenues (expenses) - 255,183 78,780 119,307 Total non-operating revenues (expenses) 121,480 (174,858) (39,801) (429,872) Income before contributions and transfers 6,096,123 3,884,552 3,286,560 542,901 CONTRIBUTIONS AND TRANSFERS: Capital contributions - 2,672,105 5,427,617 - Transfers in 18,387 260,443 40,539 12,222 Transfers out (123,658) (171,146) (780,255) (102,651) Total contributions and transfers (105,271) 2,761,402 4,687,901 (90,429) Change in net assets 5,990,852 6,645,954 7,974,461 452,472 Net assets at beginning of year 130,264,120 131,743,299 126,628,954 12,342,859 Total net assets at end of year $ 136,254,972 $ 138,389,253 ~ 134,603,415 $ 12,795,331 Change in fund net assets of proprietary funds Adjustment to reflect inclusion of internal service fund activities related to enterprise funds. Change in net assets of business-type activities (Exhibit II) The notes to the basic financial statements are an integral part of this statement. 24 Exhibit IX Governmental Activities - Total Internal Enterprise Service Funds Funds $ 186,547,406 $ - - 39,775,704 8,303,567 - - 805,113 194,850,973 40,580,817 162,065,002 37,702,063 18,452,784 1,577,382 180,517,786 39,279,445 14,333,187 1,301,372 6,075,453 240,948 (11,613,021) (157,429) 4,456,827 - 104,420 10,298 453,270 - (523,051) 93,817 13,810,136 1,395,189 8,099,722 - 331,591 98,400 ~I,I~~,~IO~ ~zss,~ss~ 7,253,603 (160,355) 21,063,739 1,234,834 400,979,232 7,319,851 $ 422,042,971 $ 8,554,685 21,063,739 647,795 $ 21,711,534 25 CITY OF DENTON, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009 Business-type Activities -Enterprise Funds Electric Water Wastewater System System System CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 130,701,827 $ 26,640,088 $ 20,990,887 Cash paid to employees for services (6,772,129) (9,018,385) (5,386,571) Cash paid to suppliers (101,543,501) (8,311,496) (6,595,827) Net cash provided (used) by operating activities 22,386,197 9,310,207 9,008,489 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers out (123,658) (171,146) (780,255) Transfers in 18,387 260,443 40,539 Net cash provided (used) by noncapital financing activities: (105,271) 89,297 (739,716) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Principal payments on capital debt (5,406,926) (5,863,855) (4,033,561) Interest and fiscal charges (2,494,277) (5,955,675) (2,183,965) Principal payments under capital lease obligation - - 369,275 Proceeds from issuance of refunding debt - - - Proceeds from impact fees - 3,265,256 1,191,571 Proceeds from sale of capital assets 27,653 195,000 - Acquisition and construction of capital assets (30,269,489) (7,990,582) (7,805,688) Net cash used by capital financing activities (38,143,039) (16,349,856) (12,462,368) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale and maturities of investment securities 276,085,934 32,385,805 250,239 Purchase of investment securities (263,211,833) (29,771,418) (1,560,587) Interest received on investments 3,111,973 2,376,241 1,010,297 Net cash provided (used) by investing activities 15,986,074 4,990,628 (300,051) Net increase (decrease) in cash and cash equivalents 123,961 (1,959,724) (4,493,646) Cash and cash equivalents at beginning of year 8,977,522 9,782,273 7,631,508 Cash and cash equivalents at end of year 9,101,483 7,822,549 3,137,862 Investments, at fair value (Note IV.A.) 79,422,675 67,914,936 27,840,181 Cash, cash equivalents and investments, at fair value ~ 88,524,158 S 75,737,485 S 30,978,043 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income $ 5,974,643 $ 4,059,410 $ 3,326,361 Adjustments: Depreciation expense 5,270,030 5,095,899 5,345,958 Decrease (Increase) in receivables 2,741,269 (114,438) (160,239) Decrease (Increase) in interfund receivables (550,678) (47,992) 524 Increase in inventories - - - Decrease (Increase) in prepaid items - - - Decrease (Increase) in escrow deposits - - - Increase (Decrease) in accounts payable 8,519,473 (80,151) 243,350 Increase (Decrease) in compensated absences payable 66,770 9,965 21,882 Increase (Decrease) in municipal pension obligations 209,576 186,832 126,734 Increase (Decrease) in other post employment benefits 136,862 200,682 103,919 Increase in closure/postclosure liability - - - Increase (Decrease) in interfund payables 18,252 - - Total adjustments 16,411,554 5,250,797 5,682,128 Net cash provided (used) by operating activities $ 22,386,197 $ 9,310,207 $ 9,008,489 NONCASH CAPITAL, INVESTING AND FINANCING ACTIVITIES: Increase in fair value of investments 404,294 403,011 123,631 Capital asset contributions - 2,672,105 5,427,617 The notes to the basic financial statements are an integral part of this statement. 26 Exhibit X Governmental Activities Total Internal Solid Enterprise Service Waste Funds Funds $ 18,172,927 $ 196,505,729 $ 40,688,224 (6,645,421) (27,822,506) (5,102,900) (7,748,444) (124,199,268) (33,438,133) 3,779,062 44,483,955 2,147,191 (102,651) (1,177,710) (258,755) 12,222 331,591 98,400 (90,429) (846,119) (160,355) (3,007,031) (18,311,373) (1,108,868) (763,561) (11,397,478) (153,209) 202,203 571,478 1,173,479 823,898 823,898 637,803 4,456,827 222,653 10,298 (3,801,403) (49,867,162) (2,499,405) (6,545,894) (73,501,157) (1,939,902) 1,916,844 310,638,822 6,098,554 (3,354,216) (297,898,054) (10,572,400) 286,854 6,785,365 233,789 (1,150,518) 19,526,133 (4,240,057) (4,007,779) (10,337,188) (4,193,123) 4,906,913 31,298,216 5,335,934 899,134 20,961,028 1,142,811 7,434,830 182,612,622 9,456,114 ~ 8,333,964 S 203,573,650 S 10,598,925 S 972,773 S 14,333,187 ~ 1,301,372 2,740,897 18,452,784 1,577,382 (191,904) 2,274,688 107,408 10,620 (587,526) - - - (1,185,698) 37,594 37,594 (657) - - (241,000) (342,697) 8,339,975 (183,361) 29,492 128,109 22,364 137,306 660,448 113,186 116,855 558,318 78,898 268,126 268,126 - 18,252 557,297 2,806,289 30,150,768 845,819 $ 3,779,062 $ 44,483,955 $ 2,147,191 24,217 955,153 39,595 - 8,099,722 27 CITY OF DENTON, TEXAS Exhibit XI STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS AS OF SEPTEMBER 30, 2009 Total Agency Funds ASSETS: Cash, cash equivalents and investments, at fair value $ 3,880,634 Accrued interest 18,991 Interfund receivables - Otherreceivables 72,953 Total assets $ 3,972,578 LIABILITIES: Accounts payable $ 3,972,578 Total liabilities $ 3,972,578 The notes to the basic financial statements are an integral part of this statement. 28 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2009 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Denton is a municipal corporation governed by an elected seven-member council consisting of a mayor elected at large and six councilpersons, four representing specific geographical districts and two elected at large. The City receives funding from state and federal government sources and must comply with the requirements of these funding source entities. However, the City is not included in any other governmental "reporting entity," as defined in pronouncements by the Governmental Accounting Standards Board (GASH) Statement No. l4, "The Financial Reporting Entity," since council members are elected by the public and have decision-making authority, the authority to levy taxes, the power to designate management, the ability to significantly influence operations, and primary accountability for fiscal matters. The GASH issued Statement No. 49, "Accounting and Financial Reporting for Pollution Remediation Obligations" ("GASH 49"), which was effective for the City in the fiscal year ended September 30, 2009. GASH 49 provides guidance on calculating, accounting, and financial reporting for pollution (including contamination) cleanup obligations, which are obligations to address the current or potential detrimental effects of existing pollution by participating in pollution remediation activities such as site assessments and cleanups. GASH 49 excludes pollution prevention or control obligations with respect to current operations, and future pollution remediation activities that are required upon retirement of an asset, such as landfill closure and post closure care and nuclear power plant decommissioning. In the process of evaluating the implementation of the statement, the City determined there was no impact to the financial statements. The financial statements of the City have been prepared to conform to accounting principles generally accepted (GAAP) in the United States of America as applicable to state and local governments. GASH is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the more significant policies. A. Reporting entity An elected seven-member council consisting of a mayor and six councilpersons govern the City. As required by accounting principles generally accepted in the United States of America, these financial statements present the City (the primary government) and its component units, which are entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the City's operations, and so data from these units are combined with data of the primary government. A discretely presented component unit, on the other hand, is reported in a separate column in the government- wide financial statements to emphasize it is legally separate from the City. The City had no discretely presented or blended component units at September 30, 2009. B. Government-wide and fund financial statements The basic financial statements include both government-wide (based on the City as a whole) and fund financial statements. The reporting focus is either the City as a whole (government-wide financial statements) or major individual funds (within the fund financial statements). The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all non-fiduciary activities of the primary government. For the most part, the effect of inter-fund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The government-wide statement of activities demonstrates the degree to which the direct expenses of a functional category (public safety, public works, etc.) or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment; (2) grants and contributions that are restricted to meeting operational requirements of a particular function or segment; and (3) grants and contributions that are restricted to meeting the capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. 29 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 The net cost (by function or business-type activity) is normally covered by general revenue (property taxes, sales taxes, franchise fees, interest income, etc.). Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major governmental funds and major enterprise funds are reported as separate columns in the fund financial statements. GASB Statement No. 34 sets forth minimum criteria (percentage of assets, liabilities, revenues or expenditures/expenses of either fund category and for the governmental and enterprise funds combined) for the determination of major funds. Non-major funds are combined in a column in the fund financial statements. Internal service funds, which traditionally provide services primarily to other funds of the government, are presented in summary form as part of the proprietary fund financial statements. The financial statements of internal service funds are allocated (based on the percentage of goods or services provided) between the governmental and business-type activities when presented at the government-wide level. The City's fiduciary funds are presented in the fund financial statements. Since by definition these assets are being held for the benefit of a third party (other local governments, individuals, etc.) and cannot be used to address activities or obligations of the government, these funds are not incorporated into the government-wide statements. The government-wide focus is more on the sustainability of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. The focus of the fund financial statements is on the major individual funds of the governmental and business-type categories, as well as the fiduciary funds (by category). Each presentation provides valuable information that can be analyzed and compared to enhance the usefulness of the information. C. Measurement focus, basis of accounting and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund statements. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund-level financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property tax, franchise fees, sales tax and other taxes associated with the current fiscal period are all susceptible to accrual and so have been recognized as revenues of the current fiscal period. All of the other revenue items are considered to be measurable and available only when cash is received. The City reports the following major governmental funds: The general fund is the City's primary operating fund. All general tax revenues and other receipts that are not allocated by law or contractual agreement to some other fund are accounted for in this fund. From the fund are paid general operating costs, fixed charges and capital improvement costs that are not paid through other funds. The debt service fund accounts for the payment of principal and interest on general long-term liabilities, paid primarily by taxes levied by the City. 30 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 The capital projects fund accounts for financial resources used for the acquisition or construction of major capital facilities being financed from bond proceeds, capital contributions, or transfers from other funds, other than those recorded in the enterprise funds and internal service funds. Other governmental funds is a summarization of all of the non-major governmental funds. The City reports the following major proprietary funds: The City utility system is made up of three separate funds as follows: The electric fund accounts for electrical utility services to the residents and commercial establishments of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The water fund accounts for water utility services to the residents and commercial establishments of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The wastewater fund accounts for sewer and storm water services to the residents and commercial establishments of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The City provides additional services through the following fund: The solid waste fund accounts for the provision of solid waste services to the residents of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The City additionally reports the following funds: Internal service funds are used to account for the financing of materials and services provided by one department of the City to other departments of the City on acost-reimbursement basis. Agency funds are used to account for the payment of payroll, developers' escrow funds, and other similar liabilities. The City holds the assets in an agency capacity for individuals, private organizations or other governments. The City follows private-sector standards of accounting and financial reporting (as issued by the Financial Accounting Standards Board) issued prior to December 1, 1989 in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the GASB. Governments also have the option of following subsequent private-sector guidance for business-type activities and enterprise funds, subject to this same limitation. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the City's electric, water, wastewater and solid waste funds are charges to customers for services. Operating expenses for the enterprise funds and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. For deferred charges, the City recognizes, as an asset or a liability, the difference between the electric fund's energy cost adjustment (ECA) revenue collected and related costs, in compliance with Financial Accounting Standards Board Statement No. 71 Accounting for the Effects of Certain Types of Regulation. When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, then unrestricted resources as they are needed. 31 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 D. Assets, liabilities and net assets or equity 1. Cash, cash equivalents and investments The City's cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments are carried at fair value or cost, if maturities are one year or less. Fair value is determined as the price at which two willing parties would complete an exchange. The City uses a pooled cash and investment fund to hold and account for all of the City's investments except the utility debt service reserve amounts. For financial reporting purposes, the investment balances in the pooled fund are allocated back to the individuals funds based on their respective share of the pooled total. Interest earned on investments is also allocated back and recorded directly to the individual funds on a monthly basis. 2. Receivables Outstanding balances between funds are reported as "interfund receivables/payables." Any residual balances between governmental activities and business-type activities are reported in the government-wide statements as "internal balances." Trade and property tax receivables are shown net of an allowance for uncollectibles. The City accrues amounts for utility services provided in September, but not billed at September 30, 2009. 3. Inventories Inventories of supplies are maintained at the City warehouse for use by all City funds and are accounted for by the consumption method. Cost is determined using a moving average method. No inventories exist in the governmental fund types. 4. Restricted Assets Certain proceeds of the City's governmental and proprietary fund revenue bonds, general obligation bonds, and certificates of obligation, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Assets collected from impact fees are limited by state statute in use and also shown as restricted on the balance sheet of the Water and Wastewater funds. 5. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items) are reported in applicable governmental or business-type activities columns in the government-wide financial statements and in the proprietary fund financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the time received. Major outlays for capital assets and improvements are capitalized as projects are constructed. Net interest incurred during the construction phase of capital assets of business-type activities and enterprise funds is included as part of the capitalized value of the assets constructed. For 2009, net interest capitalization of $1,534,660 was recorded for electric fund projects, $223,064 was recorded for water fund projects and $329,856 was recorded for wastewater fund projects. 32 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Capital assets are depreciated using the straight-line method over the following useful lives: Assets Years Buildings 40 Infrastructure 20 - 40 General improvements 10 Machinery and equipment 10 - 20 Furniture and office equipment 10 Computer equipment/software 3 -10 Plant and equipment 5 Underground pipe 40 Water storage rights 50 -100 Water recreation rights 50 Communication equipment 5 Vehicles 3 -10 Renewals and betterments of property and equipment are capitalized, whereas normal repair and maintenance are charged to expense as incurred. 6. Compensated Absences The City allows full-time employees to accumulate unused vacation up to 320 hours (480 for Civil Service Fire employees.) Upon termination, any accumulated vacation time will be paid to an employee. Generally, sick leave is not paid upon termination except for fire fighters and police officers. Firefighters and police officers accumulate unused sick leave up to a maximum of 1080 hours and 720 hours, respectively. All other employees are paid only upon illness while employed by the City. Accumulated vacation and sick leave is accrued when incurred in the government-wide, proprietary and fiduciary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements but have not been paid this amount at the end of the fiscal year. The General Fund and Other Governmental Funds are used to record any payout expenditures of the governmental funds' employees and related liability, while proprietary fund payouts for their employees are recorded as reductions to the liabilities in those funds. 7. Arbitra e Arbitrage involves the investment of the proceeds from the sale oftax-exempt securities in a taxable money market instrument that yields a higher rate, resulting in interest revenue in excess of interest costs. Federal tax code requires that these excess earnings be rebated to the federal government. The Capital Projects Fund has been used in prior years to liquidate governmental funds' related liability. 8. Lon -term obli at.~ ions In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term obligations are reported as liabilities. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Gains and losses on refunding are amortized over the life of the refunded debt or the life of the new issue, whichever is shorter. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while 33 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 9. Fund e ui In the fund financial statements, governmental funds report reservations of fund balance for accounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balances represent management plans that are subject to change. E. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates. II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS Explanation of certain differences between the governmental fund statement of revenues, expenditures and changes in fund balances and the government-wide statement of activities Another element of that reconciliation states, "Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. This is the amount by which proceeds exceeded payments." The details of this $9,682,694 difference are as follows. Debt issued or incurred: Issuance of general obligation debt $(6,120,000) Principal repayments: Certificates of obligation principal retirement 4,697,568 General obligation debt principal retirement 4, 5 5 8, 5 69 Refunded principal 6,323,451 Lease obligations principal retirement 223,106 Net adjustment to decrease net changes in fund balances -total governmental funds to arrive at changes in net assets of governmental activities 9 682 694 Another element of that reconciliation states, "The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins and donations) is to increase net assets." The details of this $2,536,096 difference are as follows: Loss on disposal of capital assets $ (70,013) Donations of capital assets increase net assets in the statement of activities but do not appear in the governmental funds because 2 606109 they are not financial resources Net adjustment to increase net changes in fund balances -total 2 536 096 governmental funds 34 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Another element of that reconciliation states, "Certain expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds." The details of the $(1,400,200) difference are as follows: Compensated absences $ (232,418) Municipal pension obligation (982,707) Other post employment benefits (159,733) Accrued interest 25 342 Net adjustments to decrease net changes in fund balances -total governmental funds to arrive at changes in net assets of governmental activities 1400 200 III. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary information The City Council follows these procedures, as prescribed by City Charter, in establishing the budgets reflected in the financial statements: 1. Within the time period required by law, the City Manager submits to the City Council a proposed budget for the fiscal year beginning on the following October 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted prior to the adoption of the budget in order to obtain taxpayer comments. 3. The annual budget adopted by the City Council covers the general fund, special revenue funds (Recreation Fund, Police Confiscation Fund, Tourist and Convention Fund, Traffic Safety Fund, and the Gas Well Revenues Fund), the debt service fund, the enterprise funds, and internal service funds. The budget is legally enacted by the City Council through passage of an ordinance prior to the beginning of the fiscal year. The basic financial statements reflect the legal level of control, (i.e. the level at which expenditures cannot legally exceed the appropriated amount) which is established at the total fund level as approved by City Council. 4. The City Charter provides that the City Manager may transfer any part of the unencumbered appropriation balance or the entire balance thereof between programs or general classifications of expenditures within an office, department, agency or organizational unit. City Council approval is not required at this level. The Charter also provides that at any time during the year, at the request of the City Manager, City Council may by resolution transfer any part of the unencumbered appropriation balances or the entire balance thereof from one office, department, agency, or organizational unit to another, as well as make any increases in fund appropriations. The City Council defines an organizational unit as set forth in Article VIII, Section 8.07 of the City Charter, to be a fund that has been appropriated by the City Council. Budgets are adopted on a basis for the governmental funds and the budgeted special revenue funds that is generally consistent with generally accepted accounting principles. Budgets for enterprise funds are prepared on the full accrual basis, except certain noncash transactions such as depreciation expense and amortization on debt issuance costs where it is not budgeted, and debt service payments where it is budgeted. At the beginning of the subsequent year, management reviews all open encumbrances from the prior year and, as provided in the budget ordinance, appropriations for the encumbrances may be carried forward. In the current fiscal year, no appropriations were carried forward for the General Fund or Other Governmental Funds. Also, during the budgetary process, amounts are included in all fund budgets to recognize administrative transfers between funds for goods or services. These amounts are not included in the reporting of actual activity for the funds. For funds reporting required budget-to-actual comparisons, these administrative transfers are included as adjustments -budgetary basis. 35 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 B. Deficit fund equity The Community Development Block Grant and Criminal Justice special revenue funds had a deficit fund balance of $(140) and $(2,222) at September 3 0, 2009, respectively. The deficits were a result of reimbursement timing. Elimination of the deficit fund balance is anticipated in 2010. IV. DETAILED NOTES ON ALL FUNDS A. Deposits and investments In order to facilitate effective cash management practices, the operating cash of all funds is pooled into a common account for the purpose of increasing income through combined investment activities. At year-end, the City had $30,726,423 in cash and cash equivalents, including $28,058,000 invested in TexPool, a local government investment pool the City considers a cash equivalent. Of the $30,726,423, $1,405,072 is included in the agency funds. In addition, the City had $14,476 in petty cash at year-end. The Public Funds Investment Act (Texas Government Code) authorizes the City to invest in obligations of the U.S. Treasury, U.S. agencies, fully collateralized repurchase agreements, public fund investment pools, SEC- registered no-load money market mutual funds, investment-grade rated municipal securities of any state and fully collateralized or insured certificates of deposit. The City's investment policy may further restrict those investment options. The investments reported on September 30, 2009 were similar to those held during the fiscal year. The City reports all investments in the financial statements at fair value. At September 30, 2009, the City's investments carried a fair value of $263,487,515. As of September 30, 2009, City investments were as follows: Weighted Average Investment Type Fair Value Maturity (Years) U. S. Treasury Securities-Coupon $ 20,375,010 0.50 U.S. Agency Securities-Coupon 154,827,915 0.75 U.S. Agency Securities-Callable 17,175,590 1.87 U.S. Agency Securities-Discount 9,999,000 0.22 Certificates ofDeposit-Insured 61,110,000 0.70 Total fair value of investments $ 263,487,515 Portfolio weighted average maturity 0.77 Interest rate risk. In accordance with its investment policy, the City manages its exposure to declines in fair values due to interest rate fluctuations by limiting the weighted average maturity of its investment portfolio to less than eighteen months. Credit risk. The City's investment policy limits investments to obligations of the United States of America and its agencies, investment quality obligations of the State of Texas with a rating not less than AA, fully insured or collateralized Certificates of Deposits, and commercial paper that has a maturity of 270 days or less and a rating of A-1 or P-l. The City's investments in the bonds of U.S. agencies were rated AAA by Standard & Poor's and Fitch Ratings and Aaa by Moody's Investors Service. Custodial credit risk. This is the risk that in the event of a bank or counterparty failure, the City's deposits may not be returned. The policy states that all bank deposits and bank investments of City funds shall be secured by pledged collateral with a market value equal to no less than 102 percent of the principal plus accrued interest less an amount insured by FDIC, if a deposit. As of September 30, 2009, the bank balance for deposits was 36 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 $3,194,007 which was insured by FDIC for $250,000 and covered by collateral with a fair value of $8,591,709 held by an independent third party custodian pledged for the City, but not in the City's name. Cash, cash equivalents and investments, at fair value are reported together on the financial statements. Investments, at fair value, by fund were as follows: Other General Debt Capital Governmental Fund Service Projects Funds Electric Water Unrestricted investments $ 20,121,458 $ 2,099,124 $ 32,591,596 $ 13,809,795 $ 65,453,609 $ 14,991,204 Change in fair value 94,196 9,827 152,573 64,648 306,413 70,179 Restricted investments - - - - 13,607,636 52,614,114 Change in fair value - - - - 55,017 239,439 Total $ 20,215,654 $ 2,108,951 $ 32,744,169 $ 13,874,443 $ 79,422,675 $ 67,914,936 Internal Total Total City and Service City Other Agency Agency Wastewater Solid Waste Funds Investments Funds Investments Unrestricted investments $ 8,882,393 $ 5,833,684 $ 8,655,038 $ 172,437,901 $ 2,464,027 $ 174,901,928 Change in fair value 41,582 27,310 40,518 807,246 11,535 818,781 Restricted investments 18,832,014 1,566,503 757,014 87,377,281 - 87,377,281 Change in fair value 84,192 7,333 3,544 389,525 - 389,525 Total $ 27,840,181 $ 7,434,830 $ 9,456,114 $ 261,011,953 $ 2,475,562 $ 263,487,515 B. Property tax revenue Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on October 1 and are due and payable at that time; therefore, the legally enforceable claim arises on October 1. A receivable is recorded at that time. All unpaid taxes levied October 1 become delinquent February 1 of the following year. Property taxes at the fund level are recorded as receivables and revenue at the time the tax levy is billed. Current-year revenues recognized are those ad valorem taxes collected within the current period or soon enough thereafter to pay current liabilities, which is sixty days after year-end. All other outstanding receivables are adjusted from revenue and recognized as deferred for future collections. Current tax collections for the year ended September 30, 2009, were 98.5% of the tax levy. An allowance is provided for delinquent taxes not expected to be collected in the future. At September 30, 2009, the City had a tax rate of $0.66652 per $100 valuation. Based upon the maximum ad valorem tax of $2.50 per $100 valuation imposed by Texas Constitutional law, the City had a tax rate margin of $1.83348. Additional revenues up to $115,350,811 could be raised per year based on the current year's assessed value of $6,291,359,112 before the limit is reached. 37 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 C. Receivables Receivables at September 30, 2009, for the City's individual major funds and other funds (non-major funds, internal service funds and fiduciary funds), including the applicable allowances for uncollectible accounts, are shown below. Capital General Debt Service Projects Electric Water Receivables: Taxes $4,290,288 $ 519,662 $ - $ - $ - Accounts - - - 21,951,574 3,432,998 Accrued interest 155,081 16,178 251,192 602,138 515,350 Unbilled utility service - - - 5,327,058 899,456 Other 10,524,926 - - 577,943 - Grossreceivables 14,970,295 535,840 251,192 28,458,713 4,847,804 Less: Allowance for uncollectibles 8,655,909 166,975 - 12,882,279 1,665,205 Net total receivables 6 314 386 368 865 $ 251,192 $ 15,576,434 3182 599 Other Internal Waste- Solid Governmental Service water Waste Funds Funds Total Receivables: Taxes $ - $ - $ - $ - $ 4,809,950 Accounts 2,993,117 2,415,200 - - 30,792,889 Accrued interest 210,308 57,035 106,436 72,542 1,986,260 Unbilled utility service 931,967 712,928 - - 7,871,409 Other - - 968,290 149,427 12,220,586 Gross receivables 4,135,392 3,185,163 1,074,726 221,969 57,681,094 Less: Allowance for uncollectibles 1,783,938 1,421,038 - - 26,575,344 Net total receivables $2,351,454 $ 1,764,125 $ 1,074,726 $ 221,969 $ 31,105,750 38 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 D. Capital assets Capital assets balances and transactions for the year ended September 30, 2009 are summarized below and on the following page. Balance at Governmental activities: Balance at Transfers and September 30, October 1, 2008 Increases Decreases 2009 Capital assets not being depreciated: Land $ 7,929,335 $ 4,993,449 $ - $ 12,922,784 Construction in progress 23,568,973 21,199,851 10 279 819 34,489,005 Total capital assets not being depreciated 31,498,308 26,193,300 10 279 819 47,411,789 Capital assets being depreciated: Buildings 56,963,020 75,498 - 57,038,518 Infrastructure 182,699,871 5,971,113 - 188,670,984 Machinery and equipment and other improvements 53,028,749 3,512,115 1675 911 54,864,953 Total capital assets being depreciated 292,691,640 9,558,726 1675 911 300,574,455 Less accumulated depreciation for: Buildings 14,351,325 1,447,242 - 15,798,567 Infrastructure 87,895,120 9,039,972 - 96,935,092 Machinery and equipment and other improvements 32,088,155 5,899,289 1625 718 36,361,726 Total accumulated depreciation 134,334,600 16,386,503 1625 718 149,095,385 Total capital assets, being depreciated, net 158,357,040 6 827 777 50193 151,479,070 Governmental activities capital assets, net 189 855 348 19 365 523 10 330 012 198 890 859 Decreases in accumulated depreciation for machinery and equipment and other improvements include $70,858 from the transfer of assets from business-type activities. 39 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 (Continued) Balance at Transfers and Balance at Business-type activities: October 1, 2008 Increases Decreases Se tember 30, 2009 Capital assets not being depreciated: Land $ 10,402,655 $ 4,122 $ - $ 10,406,777 Construction in progress 53,385,694 48,655,541 15 807 065 86,234,170 Total capital assets not being depreciated 63,788,349 48,659,663 15 807 065 96,640,947 Capital assets being depreciated: Buildings 8,119,746 57,302 (78,360) 8,098,688 Landfill improvements 9,900,666 722,574 - 10,623,240 Water rights 69,883,098 - - 69,883,098 Infrastructure 302,202,653 11,985,551 - 314,188,204 Plant, machinery, equipment and other improvements 215,578,462 12,983,240 1623 863 226,892,839 Total capital assets being depreciated 605,684,625 25,703,667 1702 223 629,686,069 Less accumulated depreciation for: Buildings 2,760,892 216,973 (78,360) 2,899,505 Landfill improvements 9,734,919 38,801 - 9,773,720 Water rights 13,480,341 696,330 - 14,176,671 Infrastructure 70,458,395 7,923,840 - 78,382,235 Plant, machinery, equipment and other improvements 102,755,761 9,576,840 1369 520 110,963,081 Total accumulated depreciation 199,190,308 18,452,784 1447 880 216,195,212 Total capital assets, being depreciated, net 406,494,317 7,250,883 254 343 413,490,857 Business-type activities capital assets, net 470 282 666 55 910 546 16 061408 510131804 Depreciation expense was charged to activities of funds/functions/programs as follows: Governmental activities: General government $ 1,843,996 Public safety 2,555,906 Public works 9,049,103 Parks & recreation 1,360,116 Capital assets held by internal service funds are charged to the various functions based upon usage 1,577,382 Total depreciation expense -governmental activities $ 16,3 86,503 Business-type activities: Electric $ 5,270,030 Water 5,095,899 Wastewater 5,345,958 Solid waste 2,740,897 Total depreciation expense -business-type activities $ 18,452,784 40 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Construction commitments: The City has several major construction projects planned or in progress as of September 30, 2009. These projects are evidenced by contractual commitments with contractors and include: Remaining Project Sent-to-Date Commitment Roselawn Elevated Water Tank $3,235,009 $2,761,407 Lake Lewisville Water Treatment Plant Upgrade 209,964 2,600,000 HickorylN. Lakes Rebuild- Electric System Infrastructure 1,202,540 834,374 Western Boulevard -Street Improvement 5,777,080 720,520 South Branch Library Expansion 1,982,149 677,826 Shady Oaks -Street Improvement 3,731,949 475,565 Senior Center Improvements 1,191,535 414,942 E. Interfund receivables, payables and transfers A summary of Interfund receivables and payables (in thousands) at September 30, 2009, is as follows: Interfund Receivables Governmental Major Funds Business-Type Major Funds Non-Major Governmental Interfund Payables: General Fund Funds Electric Water Wastewater Total Non-Major Governmental Funds $ - $ 31 $ - $ - $ - $ 31 Internal Service Funds 129 - 6,139 387 75 6,730 Total $ 129 $ 31 $6,139 $ 387 $ 75 $ 6,761 The more significant Interfund receivables and payables include the following: Interfund receivables Interfund payables Amount Electric fund Internal service funds-materials management $6,13 8,660 Water fund Internal service funds-materials management 3 86,946 General fund Internal service funds-materials management 128,534 Wastewater fund Internal service funds-materials management 75,371 The outstanding balances between the Electric, Water, General Fund and Wastewater Funds and the Materials Management Fund are a result of the cash position in the Materials Management Fund due to inventory purchases. 41 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Transfers between funds (in thousands) during the year were as follows: Transfers Out Governmental Major Funds Business-Type Major Funds Capital Non-Major Internal General Projects Governmental Service Transfers In: Fund Fund Funds Electric Water Wastewater Solid Waste Funds Total Governmental Major Funds: General Fund $ - $ - $ 112 $ - $ - $ - $ - $ - $ 112 Debt Service Fund - 300 222 - - 506 - 259 1,287 Capital Projects Fund 9 - 1,463 - - - - - 1,472 Non-Major Governmental Funds 593 6,491 14 76 113 60 69 - 7,416 Electric - - - - 18 - - - 18 Water 10 - 60 - - 190 - - 260 Wastewater - - - 17 15 - 9 - 41 Solid W aste - - 5 7 - - - - 12 Internal Service Funds - - - 24 25 24 25 - 98 Total $ 612 $6,791 $ 1,876 $ 124 $ 171 $ 780 $ 103 $ 259 $10,716 The more significant transfers include the following: Transfers from fund Transfers to fund Amount Capital Projects Non- Major Gov't -Gas Well Revenues $6,491,223 Non- Major Gov't -Gas Well Revenues Capital Projects 1,300,000 Wastewater Debt Service 505,983 General Fund Non- Major Gov't -Gas Well Revenues 463,568 Capital Projects Debt Service 300,000 Transfers from the Capital Projects Fund to the Gas Well Revenues Fund were to establish a separate special revenue fund for gas well revenue activity. The transfers from the Gas Well Revenues Fund to the Capital Projects Fund were to fund capital projects using gas well revenues. Transfers from the Wastewater Fund and the Capital Projects Fund to the Debt Service Fund were for related debt service payments. Transfers from the General Fund to the Gas Well Revenues Fund were for property and sales taxes earned through gas well activities. 42 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 F. Leases Leases payable represent the remaining principal amounts payable under lease purchase agreements for the acquisition of equipment through the General, Solid Waste, Tech Services, and Wastewater funds. These leases are recorded as capital leases. Remaining requirements, including interest, under these leases are as follows: Year Pa menu 2010 $2,449,826 2011 1,153,251 2012 1,104,907 2013 758,964 2014 758,963 2015-2017 175,490 Total minimum lease payments 6,401,401 Less: amount representing interest 470,181 Present value of minimum future lease payments 5 931220 The following schedule provides an analysis of the City's investments in equipment under capital lease arrangements as of September 30, 2009: Equipment $10,086,026 Less: Accumulated Depreciation 5 609 517 Total 4 476 509 43 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 G. Long-term debt Long-term liabilities transactions for the year ended September 30, 2009, are summarized as follows below and on the following page: Balance at Balance at October 1, September 30, Due Within 2008 Increases Decreases 2009 One Year Governmental Activities General obligation bonds $ 80,814,594 $ 6,730,000 $ 10,185,944 $ 77,358,650 $ 4,954,000 Certificates of obligation 55,097,550 - 6,486,400 48,611,150 4,728,200 Obligations under capital leases 1,819,298 1,643,490 693,117 2,769,671 997,720 Compensated absences payable 9,186,468 3,787,463 3,532,681 9,441,250 3,642,602 Claims payable 5,229,372 13,931,848 14,354,387 4,806,833 1,475,178 Municipal pension obligation - 1,095,893 - 1,095,893 - Otherpost employment benefits 809,584 277,943 39,312 1,048,215 - Unamortized premiuml(discounts) 1,645,160 273,815 260,565 1,658,410 253,913 Unamortized deferred gainl(loss) (1,146,982) (100,192) (229,440) (1,017,734) (223,069) Total governmental long-term liabilities $ 153,455,044 $ 27,640,260 $ 35,322,966 $ 145,772,338 $ 15,828,544 Balance at Balance at October 1, September 30, Due Within 2008 Increases Decreases 2009 One Year Business-type Activities: Revenue bonds $ 282,200,000 $ - $ 15,495,000 $ 266,705,000 $ 15,935,000 General obligation bonds 4,865,406 795,000 1,294,056 4,366,350 471,000 Certificates of obligation 12,952,450 - 1,708,600 11,243,850 1,701,800 Obligations under capital leases 2,571,819 1,686,746 1,097,016 3,161,549 1,337,372 Compensated absences payable 1,784,262 2,066,952 1,938,843 1,912,371 1,705,399 Note payable 3,141,222 - - 3,141,222 - Municipalpension obligation - 660,448 - 660,448 - Otherpost employment benefits - 588,702 30,384 558,318 - Landfill closure/post-closure costs 4,325,087 268,126 - 4,593,213 - Unamortized premium/(discounts) 6,265,197 28,898 707,800 5,586,295 680,100 Unamortized deferred gainl(loss) (8,532,471) (40,154) (934,243) (7,638,382) (857,421) Totalbusiness-type activities 309,572,972 6,054,718 21,337,456 294,290,234 20,973,250 Total long-term liabilities $ 463,028,016 $ 33,694,978 $ 56,660,422 $ 440,062,572 $ 36,801,794 44 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 General bonded debt -General bonded debt at September 30, 2009, is comprised of the following: Gross Amount Original Outstanding at Interest Rate Final Amount September 30, Bonded Debt Issue Date Maturity of Issue 2009 General obligation 4.5 to 5.5 2001 2021 $ 14,245,000 $ 2,845,000 General obligation 5.0 to 5.25 2002 2022 12,075,000 2,875,000 General obligation refunding 3.0 to 4.75 2003 2023 7,222,999 3,333,650 General obligation refunding 2.5 to 5.0 2004 2020 7,370,000 6,255,000 General obligation 3.0 to 5.0 2005 2025 5,000,000 4,3 80,000 General obligation 4.25 to 4.875 2006 2026 3,695,000 3,350,000 General obligation 4.0 to 4.5 2007 2026 15,925,000 14,940,000 General obligation refunding 4.0 to 5.25 2007 2022 26,025,000 25,575,000 General obligation 4.0 to 4.75 2008 2028 7,300,000 7,075,000 General obligation refunding 3.0 to 5.0 2009 2016 6,730,000 6,730,000 Total general obligation bonds 105,587,999 77,358,650 Certificates of obligation 4.25 to 5.25 2001 2021 8,275,000 1,430,000 Certificates of obligation 4.7 to 5.25 2002 2022 8,045,000 2,030,000 Certificates of obligation 3.0 to 4.75 2003 2023 5,650,000 3,545,000 Certificates of obligation 2.0 to 5.0 2004 2024 12,805,000 10,655,000 Certificates of obligation 3.0 to 4.375 2005 2025 5,575,000 3,845,000 Certificates of obligation 4.0 to 4.75 2006 2026 7,214,950 5,706,150 Certificates of obligation 4.7 to 5.0 2007 2027 8,855,000 7,410,000 Certificates of obligation 4.0 to 5.0 2007A 2028 7,065,000 6,850,000 Certificates of obligation 3.0 to 4.625 2008 2028 7,865,000 7,140,000 Total certificates of obligation 71,349,950 48,611,150 Total general bonded debt $176,937,949 $125,969,800 [These amounts do not include net unamortizedpremiums/(discounts) of $1,658,410 nor net deferred gain/(loss) on refunding of ($1,017,734).] Proceeds of general bonded debt are restricted to the uses for which they were approved in the bond elections. The City Charter expressly prohibits the use of bond proceeds to fund operating expenses. The general obligations are collateralized by the full faith and credit of the City and, primarily, payable from property taxes. In prior years, the City defeased general obligation bonds and certificates of obligation by placing the proceeds of new debt in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and liabilities for the defeased debt are not included in the City's financial statements. On September 30, 2009, $12,210,000 of general obligation bonds and $6,645,000 of certificates of obligation considered defeased are still outstanding. In May 2009, the City issued $7,525,000 ($795,000 of which is included as part of business-type activities) of general obligation refunding bonds. The reacquisition price exceeded the net carrying amount of the old debt by $140,346, of which $40,154 is reported in business-type activities. This amount is being amortized over the remaining life of the refunded debt, which is shorter than the life of the new debt issued. This advance 45 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 refunding was undertaken to reduce total debt service payments over the next 20 years by $372,042 and resulted in a net present value savings of $332,406. Revenue bonds -Revenue bond debt at September 30, 2009, is comprised of the following issues: Principal Net Net Original Outstanding at Unamortized Outstanding at Interest Rate Issue Final Amount September 30, Premium/ September 30, Revenue Bonds Date Maturity of Issue 2009 (Discount) 2009 Utility system 4.3 to 6.3 1998 2018 $ 7,175,000 $ 720,000 $ - $ 720,000 Utility system refunding 4.65 to 6.65 1998 2030 36,795,000 1,965,000 (8,787) 1,956,213 Utility system refunding 4.0 to 5.0 1998 2015 7,640,000 2,980,000 - 2,980,000 Utility system 4.974 to 6.0 2000 2020 54,880,000 10,855,000 8,396 10,863,396 Utility system 4.0 to 5.4 2001 2021 59,545,000 16,835,000 109,417 16,944,417 Utility system 4.25 to 5.0 2002 2022 56,710,000 42,720,000 199,017 42,919,017 Utility system 5.0 to 6.5 2002 2022 13,985,000 2,405,000 (4,101) 2,400,899 Utility system 3.625 to refunding 5.625 2003 2022 50,180,000 31,535,000 837,826 32,372,826 Utility system refunding 2.0 to 5.25 2004 2024 24,850,000 23,715,000 877,567 24,592,567 Utility system refunding 3.0 to 5.0 2005 2023 53,845,000 53,480,000 3,271,922 56,751,922 Utility system refunding 4.5 to 5.0 2006 2026 8,515,000 7,655,000 - 7,655,000 Utility system 4.0 to 4.25 2007 2026 16,740,000 15,600,000 3,509 15,603,509 Utility system refunding 4.0 to 4.25 2007 2029 41,795,000 41,580,000 98,086 41,678,086 Utility System 3.50 to 5.00 2008 2027 15,290,000 14,660,000 72,748 14,732,748 Total revenue Bonds $447,945,000 $266,705,000 $5,465,600 $272,170,600 [These amounts do not include net unamortizedgain/(loss) on refunding of ($7,459,712).] The revenue bonds are collateralized by the revenue of the Denton utility system funds (System) and the various special funds established by the bond ordinance. The ordinance provides that the revenue of the System is to be used first to pay operating and maintenance expenses of the System and second to establish and maintain the revenue bond funds. Any remaining revenues may then be used for any lawful purpose. The ordinance also contains provisions, which among other items restrict the issuance of additional revenue bonds unless the special funds noted above contain the required amounts and certain financial ratios are met. Management believes the City is in compliance with all significant requirements. Assets in these accounts consist of cash and U.S. government securities. Below is a summary of the various net asset balances in the funds required by the bond ordinance to be restricted for debt service. Interest and sinking fund $11,393,232 Reserve fund 18,726,324 Total restricted net assets restricted for debt service $30,119,556 In prior years, the City defeased revenue bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and 46 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 liabilities for the defeased bonds are not included in the City's financial statements. On September 30, 2009, $59,195,000 of revenue bonds considered defeased are still outstanding. Other enterprise obligations -General obligation bonds and certificates of obligation issued for solid waste fund at September 30, 2009, is comprised of the following: Gross Amount Interest Original Outstanding at Rate Issue Final Amount September 30, Other Obligations Date Maturity of Issue 2009 General obligation refunding 3.0 to 4.75 2003 2023 $ 857,001 $ 326,350 General obligation refunding 2.5 to 5.0 2004 2015 2,040,000 1,035,000 General obligation refunding 4.0 to 5.25 2007 2022 2,245,000 2,210,000 General obligation refunding 3.0 to 5.0 2008 2016 795,000 795,000 Total general obligation bonds 5,937,001 4,366,350 Certificates of obligation 4.25 to 5.25 2001 2021 3,845,000 280,000 Certificates of obligation 4.7 to 5.25 2002 2022 4,545,000 720,000 Certificates of obligation 3.0 to 4.75 2003 2023 1,755,000 330,000 Certificates of obligation 2.0 to 5.0 2004 2024 1,195,000 690,000 Certificates of obligation 3.0 to 4.375 2005 2025 1,570,000 870,000 Certificates of obligation 4.0 to 4.75 2006 2026 5,450,050 3,733,850 Certificates of obligation 4.7 to 5.0 2007 2027 2,590,000 2,055,000 Certificates of obligation 3.0 to 4.625 2008 2028 2820,000 2,565,000 Total certificates of obligation 23,770,050 11,243,850 Total other enterprise obligations $30,393,271 $15,610,200 [These amounts do not include net unamortizedpremiums/(discounts) of $120,695 nor net deferred gain/(loss) on refunding of ($178,670).] Note payable In 1980, the City and the City of Dallas contracted with the Corps of Engineers for the construction and development of Ray Roberts Reservoir in Denton County. In contracts with the Corp of Engineers, the City will pay for twenty-six (26%) percent of the estimated water storage rights of the reservoir. Water obtained from the reservoir will be pro rata on the basis of each city's proportional share of total construction cost. The closing of the dam was completed in 1987 with water being available from the reservoir in 1989. Schedule oflong-term debt maturities Aggregate maturities of the long-term debt (principal and interest) for the years subsequent to September 30, 2009, are shown on the following page: 47 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Governmental Activities: Certificates of General Obligation Obligation Capital Leases Total Fiscal Year Princi al Interest Princi al Interest Princi al Interest Princi al Interest 2010 $4,954,000 $3,459,150 $4,728,200 $2,040,157 $997,720 $29,949 $10,679,920 $5,529,256 2011 5,284,000 3,153,434 4,542,950 1,845,581 466,233 75,770 10,293,183 5,074,785 2012 5,395,950 2,913,170 3,990,000 1,664,631 435,810 57,849 9,821,760 4,635,650 2013 5,297,900 2,682,089 3,425,000 1,509,357 345,478 39,497 9,068,378 4,230,943 2014 5,481,800 2,453,699 2,700,000 1,379,444 361,695 23,280 8,543,495 3,856,423 2015-2019 27,875,000 8,575,819 12,400,000 5,177,656 162,735 12,755 40,437,735 13,766,230 2020-2024 16,615,000 3,193,178 12,150,000 2,499,061 - - 28,765,000 5,692,239 2025-2029 6,455,000 498,486 4,675,000 363,732 - - 11,130,000 862,218 Total $77,358,650 $26,929,025 $48,611,150 $16,479,619 $2,769,671 $239,100 $128,739,471 $43,647,744 Business-Type Activities: Certificates of General Obligation Obligation Revenue Fiscal Year Princi al Interest Princi al Interest Princi al Interest 2010 $ 471,000 $ 181,184 $ 1,701,800 $ 450,195 $ 15,935,000 $ 12,267,798 2011 341,000 157,131 1,602,050 379,362 14,845,000 11,486,258 2012 354,050 142,879 1,455,000 313,244 15,495,000 10,748,188 2013 352,100 128,983 1,230,000 256,748 16,195,000 9,997,321 2014 408,200 114,464 705,000 217,008 16,965,000 9,216,259 2015-2019 1,630,000 344,313 1,780,000 805,183 92,445,000 33,314,868 2020-2024 810,000 50,937 1,845,000 432,703 69,325,000 12,181,053 2025-2029 - - 925,000 62,696 22,915,000 2,610,078 2030-2034 - - - - 2,585,000 54,931 Total $ 4,366,350 $1,119,891 $ 11,243,850 $ 2,917,139 $ 266,705,000 $ 101,876,754 Notes Payable Capital Leases Total Fiscal Year Princi al Interest Princi al Interest Princi al Interest 2010 $ - $ - $ 1,337,372 $ 84,785 $ 19,445,172 $ 12,983,962 2011 3,141,222 - 545,048 66,200 20,474,320 12,088,951 2012 - - 565,722 45,526 17,869,772 11,249,837 2013 - - 349,921 24,068 18,127,021 10,407,120 2014 - - 363,486 10,502 18,441,686 9,558,233 2015-2019 - - - - 95,855,000 34,464,364 2020-2024 - - - - 71,980,000 12,664,693 2025-2029 - - - - 23,840,000 2,672,774 2030-2034 - - - - 2,585,000 54,931 Total $ 3,141,222 $ - $ 3,161,549 $ 231,081 $ 288,617,971 $ 106,144,865 [These amounts do not include net unamortizedpremiums/(discounts) of $7,244,705 nor net deferred gain/(loss) on refunding of ($8,656,116).] 48 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Bonds authorized and unissued General obligation bonds authorized but unissued as of September 30, 2009 amounted to $10,334,000. When issued, the proceeds will be allocated to the applicable capital projects. H. Landfill closure and post-closure cost State and federal laws and regulations require the City to place a final cover on its Mayhill Road landfill site upon closure and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and post-closure care costs will be paid only upon anticipated closure, the City reports a portion of these costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. Based on a model created by a 2009 engineering study, total landfill closure and post- closure cost decreased from $15,320,888 to $14,150,821. The $4,593,213 reported as landfill closure and post- closure care liability is a $268,126 increase from the $4,325,087 liability reported on September 30, 2008. This liability represents the cumulative amount incurred to date based on the use of 32.46% of the estimated capacity of the entire landfill at September 30, 2009. Based on this estimate, the remaining potential estimated liability for closure and post-closure care of the entire landfill is $9,557,608. The City will recognize the remaining estimated cost of closure and post-closure care as the remaining capacity is filled. These amounts are based on what it would cost to perform closure and post- closure care in 2009. Actual cost may fluctuate due to inflation, changes in technology, or changes in regulations. The landfill has a remaining life of 40 years, and the City expects to close the landfill in fiscal year 2049. The solid waste fund has provided for a designation of cash and investments of $4,600,000 at September 30, 2009, and anticipates increasing the reserve in future periods as the closure and post-closure activities are carried out. V. OTHER INFORMATION A. Pension plans Texas Municipal Retirement Plan Plan description The City provides pension benefits for all of its eligible employees (except fire fighters) through a non- traditional, joint contributory, hybrid-defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), one of 833 administered by TMRS, an agent multiple-employer public employee retirement system. Benefits Upon retirement, benefits depend upon the sum of the employee's contributions to the plan, with interest, and the city-financed monetary credits, with interest. City-financed monetary credits are composed of three sources: prior service credits, current service credits, and updated service credits. At the inception of each city's plan, the city granted monetary credits for service rendered before the plan began (or prior service credits) of a theoretical amount at least equal to two times what would have been contributed by the employee, with interest (3% annual) times the percentage credit adopted, prior to establishment of the plan. Monetary credits for service since the plan began (or current service credits) are a percent (200%) of the employee's accumulated contributions. In addition, the City can grant, either annually or on an annually repeating basis, another type of monetary credit referred to as an updated service credit. This monetary credit is determined by hypothetically recomputing the member's account balance by assuming the current member deposit rate of the City (7%) has always been in effect. The computation also assumes the member's salary has always been the member's average salary - using a salary calculation based on the 36-month period ending a year before the effective date of calculation. This hypothetical account balance is increased by 3% each year, and increased by the city match currently in effect (200%). The resulting sum is then compared to the member's actual account balance increased by the actual city match and actual interest credited. If the hypothetical calculation exceeds the actual calculation, the member is granted a monetary credit (or Updated Service Credit) equal to the difference between the hypothetical calculation and the actual calculation times the percentage adopted. At retirement, the 49 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 benefit is calculated as if the sum of the employee's accumulated contributions with interest and the city-financed monetary credits with interest were used to purchase an annuity. Members can retire at ages 60 and above with five or more years of service or with 20 years of service regardless of age. A member is vested after five years. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. Contributions The contribution rate for the employees is 7%, and the City matching ratio is currently 2 to 1, both as adopted by the governing body of the City. Under the state law governing TMRS, the actuary annually determines the city contribution rate using the Projected Unit Credit actuarial cost method. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the portion of an active member's projected benefit allocated annually. The prior service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's 25-year amortization period. Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as Updated Service Credits and Annuity Increases. Both the employees and the City make contributions monthly. Since the City needs to know its contribution rate in advance for budgetary purposes, there is a one-year delay between the actuarial valuation that serves as the basis for the rate and the calendar year when the rate goes into effect. Beginning in 2009, the City of Denton elected to "phase in" higher contributions to TMRS over a period of eight years in order to recognize the change to a Projected Unit Cost Method in the 2007 valuation. By doing so, the City will contribute less than the actuarially determined annual required contribution (ARC), and as such will need to accrue a net pension obligation on its balance sheet. In subsequent years, this net pension obligation will continue to increase until the full actuarially determined ARC is paid. The "phase in" period will last eight years from fiscal year 2009 through fiscal year 2016. The annual pension cost and net pension obligation are as follows: Net Pension Obligation Annual required contribution $ 9,709,279 Interest on prior year net pension obligation - Adjustment to annual required contribution - Annualpension cost 9,709,279 Contributions made 7,952,93 8 Increase in net pension obligation 1,756,341 Net Pension obligation -beginning of year - Netpension obligation -end of year $ 1,756,341 Three-Year Trend Information for TMRS Funding Year ending 913 0/09 913 0/08 913 0/07 Annual required contribution (ARC) $9,709,279 $7,082,769 $6,267,597 Actual contributions $7,952,938 $7,082,769 $6,267,597 Percent contributed 82% 100% 100% Net pension obligation $1,756,341 - - 50 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Actuarial Assumptions 12/31/08 Actuarial cost method Projected unit credit Amortization method Level percent of payroll Remaining amortization period 29 years -closed period Asset valuation method Amortized cost Investment rate of return 7.5% Projected salary increases Varies by age and service Includes inflation at 3.0% Cost-of living adjustments 2.1 The City adopted the Updated Service Credit provision in 1992, on a repeating basis. Additionally, the City adopted annuity increases for its retirees, on a repeating basis in 1992 equal to 70% of the change in consumer price index. The City of Denton is one of 833 municipalities having the benefit plan administered by TMRS. Each of the 833 municipalities has an annual, individual actuarial valuation performed. All assumptions for the December 31, 2008, valuations are contained in the 2008 TMRS Comprehensive Annual Financial Report, a copy of which maybe obtained by writing to P.O. Box 149153, Austin, Texas 78714-9153. Supplemental death benefit fund The City of Denton contributes to acost-sharing multiple-employer defined benefit group-term life insurance plan known as the Supplemental Death Benefits Fund (SDBF). This is a separate trust administered by the TMRS Board of Trustees and is a voluntary program in which the City elected, by ordinance, to provide group term life insurance coverage to active and retired members. The City may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. Contributions are made monthly based on the covered payroll of employee members of the City. The contractually required contribution rate is determined annually, and the rate is based on the mortality and service experience of all employees covered by the SDBF and the demographics specific to the workforce of the City. There is a one-year delay between the actuarial valuation that serves as the basis for the employer contribution rate and the calendar year when the rate goes into effect. The contributions to the SDBF are pooled for investment purposes with those of the Pension Trust Fund described above. The TMRS Act requires the Pension Trust Fund to allocate investment income to the SDBF on an annual basis. The funding policy of the plan is to assure adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to prefund retiree term life insurance during employees' entire careers. As such, contributions are utilized to fund active member deaths on apay-as-you-go basis; any excess contributions and investment income over payments then become net assets available for postemployment benefits other than pension benefits (OPEB). The City's contributions to SDBF for the fiscal years ended September 30, 2007, 2008, and 2009, were $113,656, $128,148, and $124,275, respectively, which equaled the required contributions each year. Payments from this fund are similar to group term life insurance benefits, and are paid to the designated beneficiaries upon the receipt of an approved application for payment. The death benefit for active employees provides alump-sum payment approximately equal to the employee's annual salary. The death benefit for retirees is considered an OPEB and is a fixed amount of $7,500. The obligations of this plan are payable only from the SDBF and are not an obligation of, or claim against, the Pension Trust Fund. 51 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Denton Firemen's Relief and Retirement Plan Plan description The Board of Trustees of the Denton Firemen's Relief and Retirement Fund is the administrator of a single- employerdefined benefit pension plan. The Denton Firemen's Relief and Retirement Fund covers firefighters in the Denton Fire Department. The table below summarizes the membership of the fund as of December 31, 2007, the most recent biennial actuarial valuation. 12/31/07 1. Retirees and beneficiaries currently receiving benefits and terminated employees entitled to 60 benefits but not yet receiving them 2. Current employees a. Vested 72 b. Nonvested 93 3. Total 225 The Denton Firemen's Relief and Retirement Fund provides service retirement, death, disability and withdrawal benefits. These benefits vest after 10 years of credited service. Firefighters may retire at age 50 with 20 years of service. As of the December 3 1, 2007 actuarial valuation date, the Plan effective April 1, 2007, and amended June 14, 2007, provided a monthly normal service retirement benefit, payable in a Joint and Two-Thirds to Spouse form of annuity, equal to 2.56% of Highest 36-Month Average Salary for each year of service. There is no provision for automatic postretirement benefit increases. The fund has the authority to provide, and has periodically in the past provided for, ad hoc postretirement benefit increases. The benefit provisions of this plan are authorized by the Texas Local Fire Fighter's Retirement Act (TLFFRA). TLFFRA provides the authority and procedure to amend benefit provisions. Contributions Required and Contributions Made The contribution provisions of this plan are authorized by TLFFRA. The TLFFRA provides the authority and procedure to change the amount of contributions determined as a percentage of pay by each firefighter and a percentage of payroll by the city. While the contribution requirements are not actuarially determined, state law requires that an eligible actuary must approve each plan of benefits adopted by the fund. The actuary certifies that the contribution commitment by the firefighters and the city provides an adequate financing arrangement. Using the entry age actuarial cost method, the plans' normal cost contribution rate is determined as a percentage of payroll. The excess of the total contribution rate over the normal cost contribution rate is used to amortize the plan's unfunded actuarial accrued liability, and the number of years needed to amortize the plan's unfunded actuarial accrued liability is determined using an open, level percentage of payroll method. The costs of administering the plan are financed from the fund. The funding policy of the Denton Firemen's Relief and Retirement Fund requires contributions equal to 14% of pay by the firefighters. The City of Denton contributed 14% of payroll during October 2008 through September 2009 and will contribute 15.41 % of payroll starting in January 2010. The contribution rate will equal the TMRS plan for the term of the current meet and confer contract. The December 31, 2007 actuarial valuation assumes that the city contribution rate will average 13% beginning October 2008. 52 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Three-Year Trend Information for Denton Firemen's Relief and Retirement Funding Year ending 9/3 0/09 9/3 0/0 8 9/3 0/07 Annual required contribution (ARC) $1,747,908 $1,426,906 $1,193,993 Actual contributions $1,747,908 $1,426,906 $1,193,993 Percent contributed 100% 100% 100% Actuarial Assumptions 12/31/07 Actuarial cost method Entry age Amortization method Level percent of payroll, open Amortization period for ARC 21 years Asset valuation method 5-year adjusted market value Investment rate of return 7.75% Projected salary increases 4.25% plus promotion and lon~evit_y Includes inflation at 3.75% Cost-of living adjustments None Payroll increases 4.25% ARC as percent of payroll Budgeted rates Financial statements are available and can be obtained by contacting the Denton Fire Department at the City of Denton at 332 E. Hickory, Denton, Texas 76201. B. Post-employment benefits other than pensions (OPEB) The cost of post-employment healthcare benefits, from an accrual accounting perspective, similar to the cost of pension benefits, should be associated with the periods in which the cost occurs, rather than in the future year when it will be paid. According to the requirements of GASB Statement No. 45 for the fiscal year ended September 30, 2009, the City recognizes the cost of post-employment healthcare in the year the employee services are received, reports the accumulated liability from prior years, and provides information useful in assessing potential demands on the City's future cash flows. Recognition of the liability accumulated from prior years will be amortized over 30 years, the first period commencing with the fiscal year ending September 30, 2008. Plan Description The City provides post-employment medical care (OPEB) for retired employees through asingle-employer defined benefit medical plan. The plan provides medical benefits for eligible retirees, their spouses and dependents though the City's group health insurance plans, which covers both active and retired members. The benefits, benefit levels, and contribution rates are approved annually by the City management as part of the budget process. Any changes in rate subsidies for retirees are approved by the City Council. Since an irrevocable trust has not been established, the plan is not accounted for as a trust fund. The plan does not issue a separate financial report. 53 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Benefits Provided The City provides post-employment medical, dental, and vision care benefits to its retirees. To be eligible for benefits, an employee must qualify for retirement under the Texas Municipal Retirement System or the Denton Firemen's Relief and Retirement Plan. Retirees must make aone-time irrevocable decision to chose benefits at the time of retirement, after that their eligibility for this benefit ceases. All medical care benefits are provided through the City's self insured health plan. The benefit levels are the same as those afforded to active employees. As of September 30, 2009, membership consisted of: Retirees and beneficiaries receiving benefits 126 Terminated employees eligible for benefits, but not yet enrolled - Active employees 1,192 Total 1,318 Funding Policy The plan premium rates are determined annually by City management and approved by the City Council as part of the annual budget. The retiree's contribution is the full amount of the actuarially determined blended premium rate less a subsidy dependent upon years of service at retirement. By providing retirees with access to the City's healthcare plans based on the same rates it charges to active employees, the City is in effect providing a subsidy to retirees. This implied subsidy exists because, on average, retiree health care costs are higher than active employee healthcare costs. By the City not contributing anything toward this plan in advance, the City employs apay-as-you-go method through paying the higher rate for active employees each year. The subsidies paid by the City for the fiscal year ended September 30, 2009 totaled $69,696 and are calculated as follows: Years of service Subsidy < 5 years $20/month 5 - 9 years $40/month 10 -14 years $60/month 15 -19 years $80/month 20+ years $100/month The City's GASB Statement No. 45 liability was discussed at length with the Audit/Finance Committee and the City Council. At the conclusion of these discussions, the City Council concurred with the staff recommendation to fund the City's OPEB costs on apay-as-you-go basis. This basis has been recommended since 1) this provides the lowest cost approach, 2) the ARC is relatively small in comparison to the City's overall budget, and 3) the pay-as-you-go cost is not forecast to exceed the ARC until approximately the year 2031. 54 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Annual OPEB costs and Net OPEB Obligation The City's annual other post-employment benefit (OPEB) cost is calculated based on the annual required contribution of the City (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The City's annual OPEB cost for the current year and the related information are as follows at September 30, 2009: Annual required contribution $ 879,280 Interest on prior year Net OPEB obligation 32,3 83 Adjustment to annual required contribution (45,018) Annual OPEB cost 866,645 Contributions made 69,696 Increase in net OPEB obligation 796,949 Net OPEB obligation -beginning of year 809,584 Net OPEB obligation - end of year $ 1,606,533 Percentage of OPEB costs contributed 8.04% Funded Status and Funding Progress The funded status of the plan as of the actuarial measurement date of July 1, 2007 was as follows: Actuarial accrued liability $ 7,926,202 Actuarial value of plan assets - Unfundedactuarial accrued liability $ 7,926,202 Funded ratio 0.0% Covered payroll $ 61,668,312 Unfunded actuarial accrued liability as a percentage of covered payroll 12.9% Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. 55 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 Actuarial Methods and Assumptions Projections of benefits are based on the substantive plan (the plan understood by the employer and plan members) and include the type of benefits in force at the valuation date and the pattern of sharing benefits between the City and the plan members at that point. Actuarial calculations reflect along-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Significant method and assumptions used for this fiscal year valuation were as follows: Actuarial Assumptions 7/1/07 Actuarial cost method Unit credit Amortization method Level dollar, closed Amortization period for ARC 3 0 years Asset valuation method N/A Investment rate of return 4.0% Includes inflation at 3.5% Healthcare inflation rate Pre 65 - 7.75% initial, 4.50% ultimate Post 65 - 9.75% initial, 5.50% ultimate 1 o-year grade-in period Medical Reimbursements The federal government may provide the city subsidies per the Medicare Part D Prescription Drug Subsidy Program for providing healthcare for Medicare eligible employees. As the City does not participate in these subsidies, any current and future year subsidies are not recognized as a reduction to the actuarial accrued liability. C. Deferred compensation plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. For the calendar 2009 year, the plan, available to all permanent City employees, permitted them to defer, until future years, up to 25% of annual gross earnings not to exceed $15,500. Employees who are age 50 or older may contribute an amount not to exceed $20,500. Employees who are within three years of retirement eligibility may elect to participate in a catch-up provision allowed by Section 457, which has an annual maximum contribution amount of $31,000. The withdrawal of deferred compensation funds is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are, until paid or made available to the employee or other beneficiary, solely the property and rights of the employees. Accordingly, the assets and associated liability of the plan are not included in the City's financial statements. It is the opinion of the City's legal counsel that the City has no liability for losses under the plan. D. Self insurance plan The City has established a self insurance plan for liability and workers' compensation benefits in the Risk Retention Fund. Accrued claims payable include provisions for claims reported and claims incurred but not reported. The provision for reported claims is determined by estimating the amount which will ultimately be paid each claimant. The provision for claims incurred but not yet reported is estimated based on actuarial studies. 56 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 It is the policy of the City of Denton not to purchase commercial insurance for workers' compensation claims or general liability. Commercial liability insurance coverage is purchased for public officials, airport operations, emergency medical services, take-home vehicles, and employee theft and dishonesty. Additionally, excess insurance is purchased for general liability and workers' compensation exposure. The City reports liabilities when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. Because actual claims liabilities depend on such complex factors as inflation, changes in legal doctrines, and damage awards, the process used in computing claims liability does not necessarily result in an exact amount. In January 2008, the City started a self insured group employee health insurance plan. Claims are paid from the Health Insurance Fund, which has an annually negotiated stop loss provision. The City's costs associated with the self insurance plans are reported as interfund transactions. Accordingly, they are treated as operating revenues of the Internal Service Risk Retention Fund and Health Insurance Fund and operating expenditures (expenses) of the other funds and employee payroll deductions. Claims liabilities are re-evaluated periodically to take into consideration settlement of claims, new claims and other factors. As of September 30, 2009, the estimated value of these liabilities was $4,806,833. Changes in balances of claims liabilities during fiscal years 2009 and 2008 were as follows: Claims Liability Claims and Claims Liability Beginning of Change in Claims End of Fiscal Year Estimates Payments Fiscal Year Workers' Compensation 2009 $2,93 5,214 $ 1,012,163 $ 469,240 $3,478,13 7 2008 2,638,696 990,726 694,208 2,935,214 General Liability 2009 $ 556,633 $ 256,457 $ 436,572 $ 376,518 2008 678,100 252,876 374,343 556,633 Health Insurance 2009 $1,737,525 $12,663,228 $13,448,575 $ 952,178 2008 - 8,971,442 7,233,917 1,737,525 On September 30, 2009, the City of Denton held additional amounts in unrestricted net assets of $1,275,882 in the Risk Retention Fund and $1,637,526 in the Health Insurance Fund for payment of claims. There were no significant reductions in insurance coverage from coverage in the prior year, and the amount of settlements did not exceed insurance coverage in the current year or in any of the past three fiscal years. E. Commitments and contingencies Agreement with TMPA In 1976, the City, along with the cities of Bryan, Greenville, and Garland, Texas (the Cities) entered into a Power Sales Contract with the Texas Municipal Power Agency (TMPA). TMPA was created through concurrent ordinances of the Cities and is governed by a Board of Directors consisting of eight members, two appointed by the governing body of each city. Under the terms of the agreement, TMPA agreed to construct or acquire electric generating plants to supply energy and power to the Cities for a period of not less than 35 years. The Cities in turn agreed to purchase all future power and energy requirements in excess of the amounts generated by their systems from TMPA at prices intended to cover operating costs and retirement of debt. In the event that revenues are insufficient to cover all costs and retire the outstanding debt, each of the Cities has guaranteed a portion of the unpaid debt based, generally, upon its pro rata share of the energy delivered to consumers in the prior operating year. 57 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 As of September 30, 2009, total TMPA long-term debt outstanding was approximately $981,921,000, and the City's percentage was approximately 21.3%. See the following note E, on litigation matters for more information regarding the future obligations of the City and subsequent TMPA debt refunding. TMPA operates a 462-megawatt, coal-fired generating plant. In 1996, TMPA switched to an external source of coal to reduce costs. Should TMPA be dissolved, each city would be entitled to an undivided interest in the property. Selected financial statement information of TMPA is as follows: September 30 (Unaudited) 2009 2008 (OOOs) (OOOs) Operating revenues $ 224,364 $ 261,222 Operating expenses 130,444 124,964 Operating income 93,920 136,258 Other non-operating sources 3,938 6,440 Current unrestricted assets 62,353 59,630 Total assets 1,183,993 1,198,095 Long-term obligations 981,921 967,399 Total liabilities 1,143,666 1,162,286 Total equity 40,327 35,809 Agreement with the City of Dallas During 1985, the City entered into an agreement with the City of Dallas that provides for the purchase of a minimum of 500,000 gallons/day of untreated water from the City of Dallas from Lake Lewisville. This contract will be effective for 30 years. The cost of water purchased under this agreement during fiscal year 2009 was $69,736. F. Litigation Various claims and lawsuits are pending against the City. In accordance with GAAP, those judgments considered "probable" are accrued, while those claims and judgments considered "reasonably possible" are disclosed but not accrued. In the opinion of City management and legal counsel, the maximum amount of all significant claims considered reasonably possible, excluding condemnation proceedings, is approximately $500,000 as of September 30, 2009. Potential losses after insurance coverage on all probable claims and lawsuits will not have a material effect on the City's financial position as of September 30, 2009. The following information is related to litigation and potential litigation concerning cost of energy delivered by TMPA to Denton under the TMPA Agreement: Texas Municipal Power Agency v. Cit~ryan, Texas As of December 16, 2009, all pending lawsuits involving Texas Municipal Power Agency ("TMPA"), the City of Bryan, Texas, the City of Denton, Texas, the City of Garland, Texas and Greenville, Texas (the "Member Cities"), have been settled. A Settlement Agreement approved by the four City Councils of the Member Cities and the Board of TMPA has been reached, which settlement will involve the dismissal with prejudice of three related State District Court cases and seventeen Public Utilities Commission of Texas ("PUCT") proceedings in the next several months. These dismissals provide for a settlement of all of the parties' claims. Denton has not paid and is not paying any monetary amount to the City of Bryan, Texas or to any other party in the litigation as consideration for the settlement and ultimate dismissal of the various lawsuits and PUCT proceedings. 58 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 The Grimes County, Texas Liti a.~ tion Texas Municipal Power Agency initiated litigation against the City of Bryan, Texas in 1997 in Cause No. 28169 regarding TMPA's collection of electric transmission fees from Bryan. The trial court's decision was appealed to the Austin Court of Appeals, and ultimately to the Texas Supreme Court. In 2007 the Texas Supreme Court issued its ruling and remanded the case to the trial court for further proceedings. In September 2008 the City of Bryan, Texas expanded the scope of this litigation by filing a counterclaim against TMPA and athird-party complaint against the City of Denton, Texas, the City of Garland, Texas and the City of Greenville, Texas (the "Northern Cities"). No amount of actual damages was specified by Bryan in the third-party complaint. Atrial in this Court never occurred. The Settlement Agreement provides for a dismissal with prejudice of this suit. The City has determined that this litigation is pending final disposition and dismissal and that there is no adverse outcome to the City predicted. The September 2008 City of Bryan Lawsuit On September 12, 2008, Bryan filed a suit in Brazos County District Court in Texas (Cause No. 08-002233-CV- 361)naming TMPA as a defendant, along with each of the three Northern Cities, including the City of Denton. Under the suit, Bryan requested a temporary restraining order preventing TMPA from issuing bonds authorized by the TMPA Board of Directors on September 11, 2008, which would refund and restructure approximately $443 million of outstanding TMPA debt, extending the maturity of the debt from 2018 to 2030. On September 22, 2008 the District Court in the Travis County bond validation case referenced below, enjoined and consolidated the claims dealing with the validity of the TMPA bonds into the Travis County bond validation proceeding. This lawsuit was voluntarily dismissed by Bryan as referenced below. Denton has not paid and is not paying any monetary amount to Bryan or to any other party in the litigation as consideration for the dismissal of this litigation. The 2008 Bond Validation Suits Brought b At the September 11, 2008 meeting of the TMPA Board of Directors, the Board authorized the issuance of the TMPA refunding bonds and authorized TMPA to take all legal action necessary to secure the issuance of the TMPA refunding bonds. On October 10, 2008, the TMPA Board met again and passed Resolution No. 2008- 10- 1, authorizing the issuance of the refunding bonds together with all legal action that is necessary to secure the issuance of the TMPA bonds. On September 19, 2008, TMPA filed an ex parte expedited declaratory judgment action seeking to validate the bonds for certification by the Texas Attorney General and as a predicate to the bonds' issuance. As required by state law, this in rem bond validation proceeding was filed in Travis County District Court (Cause No. D-1-GN- 08-003426), and the Texas Attorney General was served and entered an appearance therein. On September 22, 2008 the District Court in the Travis County case enjoined the Brazos County suit, referenced above that Bryan had previously initiated, and consolidated the claims affecting the bonds' validity into the Travis County proceeding. On December 10, 2008 the Travis County District Court ordered that the bond validation claims and the other claims against TMPA be severed into two separate cases - TMPA I and TMPA IL The in rem bond validation action was assigned to the Honorable John Dietz (TMPA II). The remaining claims were severed and are known as TMPA L TMPA I was never tried, and is now pending dismissal. Denton has not paid and is not paying any money damages to any party in this litigation as the consideration for the settlement and ultimate dismissal of this litigation. On December 10, 2008, the Travis County District Court granted the motions to transfer venue of Bryan's third party claims against Denton and the other Northern Cities to Hunt County, Texas pursuant to mandatory venue rules. After transferring Bryan's claims against the Northern Cities to Hunt County no action was taken by the District Clerk of Travis County to enter an order that transferred the case to Hunt County. The Court also 59 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2009 ordered that each Northern City intervene in the bond validation suit to ensure they are bound by the result. Denton therefore was an Intervenor in the TMPA's in rem bond validation proceeding known as TMPA II, as were the Cities of Garland and Greenville and the Texas Attorney General. Bryan has also intervened in TMPA II to assert its various objections to the issuance of the subject bonds. In light of the consolidation and transfer of Bryan's claims into the bond validation proceeding, Bryan voluntarily dismissed the balance of its claims in the Brazos County litigation referenced above. TMPA II, after expedited discovery and several preliminary motions, was called to trial. Bryan waived its right to a jury, all parties and all intervenors announced ready, and the case was tried before the Honorable John Dietz, District Judge, Travis County, Texas on March 12-13, 2009. After hearing the evidence and the arguments of counsel, the Court made pronouncements from the bench. The Judge suggested what his inclination would be regarding the ruling and then stated that it would be in the best interests of the four TMPA Member Cities if they attempted to resolve the dispute themselves. There is no Judgment signed in the TMPA II case. The Court thereafter signed an order, on its own motion and ordered that court-ordered mediation take place in order to give the four Member Cities a final opportunity to settle their disputes. City representatives appointed by each Member City participated in the mediation, which has ultimately resulted in reaching the above-referenced Settlement Agreement. The Settlement Agreement will be effected over the next several months by each of the TMPA Member Cities by executing dismissal pleadings of the various suits and proceedings, and the issuance of bonds which will be accomplished by each of the four TMPA Member Cities in accordance with their individual facts and circumstances, in order to provide for the refunding of certain TMPA debt obligations in accordance with their respective percentage shares, as are currently stated in the Power Sales Contract of TMPA. Denton's percentage share of the TMPA debt obligations to be refunded is approximately $62,655,000, and Denton intends to issue bonds by May 1, 2010 in an amount sufficient to accomplish such refunding. The City has determined that the above-referenced litigation is pending final disposition and dismissal and that there is no adverse outcome to the City predicted. G. Subsequent events The City has evaluated all events or transactions that occurred after September 30, 2009 up through February 8, 2010, the date the financial statements were issued. During this period there were no subsequent events requiring disclosure. 60 CITY OF DENTON, TEXAS REQUIRED SUPPLEMENTARY INFORMATION Exhibit XII SCHEDULE OF TMRS FUNDING PROGRESS AND CONTRIBUTIONS LAST THREE FISCAL YEARS (Unaudited) Actuarial Unfunded Accrued Actuarial Actuarial Actuarial Liability (AAL) Accrued Fiscal Valuation Value of Unit Credit Liability Funded Year Date Assets Method (UAAL) Percent 2007 12/31/2006 $ 105,951,245 $ 145,309,633 $ (39,358,388) 72.9% 2008 12/31/2007 113,952,231 181,480,297 (67,528,066) 62.8 2009 12/31/2008 122,458,472 195,038,325 (72,579,853) 62.8 UAAL as Percent of Annual Fiscal Covered Covered Required Actual Percent Year Payroll Payroll Contributions Contributions Contributed 2007 $ 47,271,473 83.3% $ 6,267,597 $ 6,267,597 100.0% 2008 50,347,495 134.1 7,082,769 7,082,769 100.0 2009 55,905,136 129.8 9,709,279 7,952,938 81.9 SCHEDULE OF DENTON FIREMEN'S RELIEF AND RETIREMENT PLAN FUNDING PROGRESS AND CONTRIBUTIONS LAST THREE VALUATION YEARS (Unaudited) Actuarial Unfunded Accrued Actuarial Actuarial Actuarial Liability (AAL) Accrued Fiscal Valuation Value of Unit Credit Liability Funded Year Date Assets Method (UAAL) Percent 2004 12/31/2003 $ 30,538,352 $ 37,557,733 $ (7,019,381) 81.3% 2006 12/31/2005 34,677,009 45,341,724 (10,664,715) 76.5 2008 12/31/2007 41,020,648 52,675,541 (11,654,893) 77.9 UAAL as Percent of Annual Fiscal Covered Covered Required Actual Percent Year Payroll Payroll Contributions Contributions Contributed 2004 $ 8,459,472 83.0% $ 853,334 $ 853,334 100.0% 2006 10,445,026 102.1 942,237 942,237 100.0 2008 11,320,817 103.0 1,426,906 1,426,906 100.0 61 CITY OF DENTON, TEXAS REQUIRED SUPPLEMENTARY INFORMATION Exhibit XIII SCHEDULE OF OTHER POST EMPLOYMENT BENEFITS FUNDING PROGRESS AND CONTRIBUTIONS LAST THREE VALUATION YEARS (Unaudited) Actuarial Unfunded Accrued Actuarial Actuarial Actuarial Liability (AAL) Accrued Fiscal Valuation Value of Unit Credit Liability Funded Year Date Assets Method (UAAL) Percent 2007 NIA N/A NIA NIA N/A 2008 7/31/2007 - $ 7,926,202 $ (7,926,202) 0.0% 2009 7/31/2007 - 7,926,202 (7,926,202) 0.0 UAAL as Percent of Annual Fiscal Covered Covered Required Actual Percent Year Payroll Payroll Contributions Contributions Contributed 2007 NIA N/A NIA NIA N/A 2008 $ 61,668,312 12.9% $ 879,280 $ 69,696 7.9% 2009 61,668,312 12.9 879,280 69,696 7.9 62 CITY OF DENTON, TEXAS Exhibit XIV SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -BUDGET TO ACTUAL DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2009 Variance with Adjustments - Actual on a Final Budget - BudgetedAmounts Actual Budgetary Budgetary Positive Original Final Amounts Basis Basis (Negative) REVENUES: Taxes $ 13,769,898 S 13,769,898 $ 14,038,735 S - S 14,038,735 $ 268,837 Investment revenue - - 113,737 - 113,737 113,737 Miscellaneous - - 247 - 247 247 Total revenues 13,769,898 13,769,898 14,152,719 - 14,152,719 382,821 EXPENDITURES: General government - - - - - - Debtservice: Principal, interest and fiscal charges 18,632,641 18,632,641 14,826,907 3,500,367 18,327,274 305,367 Advance refunding escrow - - 148,575 - 148,575 (148,575) Bond issuance costs - - 105,392 - 105,392 (105,392) Total expenditures 18,632,641 18,632,641 15,080,874 3,500,367 18,581,241 51,400 Deficiency of revenues under expenditures (4,862,743) (4,862,743) (928,155) (3,500,367) (4,428,522) 434,221 OTHER FINANCING SOURCES: Refunding bonds issued - - 6,120,000 - 6,120,000 6,120,000 Payment to refunded bond escrow agent - - (6,265,255) - (6,265,255) (6,265,255) Premium on debt issuance - - 246,012 - 246,012 246,012 Transfers in 4,588,030 4,588,030 1,286,731 3,500,367 4,787,098 199,068 Total other financing sources 4,588,030 4,588,030 1,387,488 3,500,367 4,887,855 299,825 Net change in fund balance (274,713) (274,713) 459,333 - 459,333 734,046 Fund balance at beginning of year 1,954,955 1,954,955 1,954,955 - 1,954,955 - Fundbalance atend of year $ 1,680,242 S 1,680,242 $ 2,414,288 S - S 2,414,288 $ 734,046 63 CITY OF: DENTON NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Community Development Block Grant (CDBG) - to account for the operations of projects utilizing Community Development Block Grant Funds. Such revenues are restricted to expenditures for specified projects by the Department of Housing and Urban Development. Recreation - to account for the revenues and expenditures for the recreation programs that are self supporting. All expenditures will be reimbursed 100%. Various business operations, such as concessions, fall into this account. Criminal Justice - to account for revenue received from the State of Texas Criminal Justice Division and other grants administered by the police department. Police Confiscation - to account for revenues received from confiscated goods. Expenditures are restricted to enhancing law enforcement. Tourist and Convention - to account for taxes received from hotel and motel occupancy for the purpose of promoting tourism. Gas Well Revenues - to account for the receipt of royalty, pooling, tax, and lease revenue related to gas wells. Citizens' Park Trusts - to account for several small trust funds that are for park development. All Other - to account for miscellaneous special revenue sources that are required to finance specific activities. 65 CITY OF DENTON, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2009 Special Revenue Funds Community Development Criminal Police Block Grant Recreation Justice Confiscation ASSETS Cash, cash equivalents and investments, at fair value $ - ~ 631,606 $ - $ 218,747 Receivables (net of allowances): Accrued interest - 4,314 - 1,497 Other - - - - Interfund receivables - 30,938 - - Duefrom other governments 75,711 - 2,832 - Total assets $ 75,711 ~ 666,858 $ 2,832 $ 220,244 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable $ 41,263 ~ 178,486 $ 12 $ - Interfund payables 28,118 - 2,820 - Deferred revenues 6,470 - 2,222 - Total liabilities 75,851 178,486 5,054 - FUND BALANCES: Unreserved balance (140) 488,372 (2,222) 220,244 Total fund balance (140) 488,372 (2,222) 220,244 Total liabilities and fund balances $ 75,711 ~ 666,858 $ 2,832 $ 220,244 66 Exhibit XV Special Revenue Funds (continued) Total Tourist Citizens' Nonmajor and Gas Well Park All Governmental Convention Revenues Trusts Other Funds $ 18,199 $ 6,206,452 $ 4,860,716 $ 3,985,030 $ 15,920,750 - 40,083 33,268 27,274 106,436 114,927 840,108 1,455 11,800 968,290 - - - - 30,938 - - - 613,762 692,305 $ 133,126 $ 7,086,643 $ 4,895,439 $ 4,637,866 $ 17,718,719 $ 34,867 $ - $ 4,152 $ 86,100 $ 344,880 - - - - 30,938 - 275,402 - 623,358 907,452 34,867 275,402 4,152 709,458 1,283,270 98,259 6,811,241 4,891,287 3,928,408 16,435,449 98,259 6,811,241 4,891,287 3,928,408 16,435,449 $ 133,126 $ 7,086,643 $ 4,895,439 $ 4,637,866 $ 17,718,719 67 CITY OF DENTON, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009 Special Revenue Funds Community Development Criminal Police Block Grant Recreation Justice Confiscation REVENUES: Fees for services $ - $ 1,200,574 $ - $ - Fines and forfeitures - - - 135,332 Investment revenue - 14,746 - 2,478 Tax revenue - - - - Intergovernmental 1,490,655 - 19,907 - Miscellaneous 85,132 778 - - Totalrevenues 1,575,787 1,216,098 19,907 137,810 EXPENDITURES: General government 1,465,478 - - - Publicsafety - - 16,903 87,550 Parks and recreation - 1,210,357 - - Capitaloutlay - 53,306 10,000 - Total expenditures 1,465,478 1,263,663 26,903 87,550 Excess (deficiency) of revenues over (under) expenditures 110,309 (47,565) (6,996) 50,260 OTHER FINANCING SOURCES (USES): Transfers in - - 4,774 - Transfersout (123,237) - - - Total other financing sources (uses) (123,237) - 4,774 - Net change in fund balances (12,928) (47,565) (2,222) 50,260 Fund balance (deficit) at beginning of year 12,788 535,937 - 169,984 Fund balance at end of year $ (140) $ 488,372 $ (2,222) $ 220,244 68 Exhibit XVI Special Revenue Funds (continued) Total Tourist Citizens' Nonmajor and Gas Well Park All Governmental Convention Revenues Trusts Other Funds $ - $ - $ 129,919 $ 376,557 $ 1,707,050 - - - 146,153 281,485 - 189,750 120,451 59,280 386,705 1,239,261 - - - 1,239,261 - - - 1,030,558 2,541,120 - 1,269,689 - 374,439 1,730,038 1,239,261 1,459,439 250,370 1,986,987 7,885,659 1,396,443 80,996 - 866,157 3,809,074 - - - 409,427 513,880 - - - 137,110 1,347,467 5,945 - 106,340 683,805 859,396 1,402,388 80,996 106,340 2,096,499 6,529,817 (163,127) 1,378,443 144,030 (109,512) 1,355,842 - 6,954,791 - 456,167 7,415,732 - (1,521,993) (114,044) (116,993) (1,876,267) - 5,432,798 (114,044) 339,174 5,539,465 (163,127) 6,811,241 29,986 229,662 6,895,307 261,386 - 4,861,301 3,698,746 9,540,142 $ 98,259 $ 6,811,241 ~ 4,891,287 $ 3,928,408 $ 16,435,449 69 CITY OF DENTON, TEXAS Exhibit XVII SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -BUDGET TO ACTUAL SPECIAL REVENUE FUNDS: RECREATION FUND FOR YEAR ENDED SEPTEMBER 30, 2009 Variance with Adjustments - Actual on a Final Budget - BudgetedAmounts Actual Budgetary Budgetary Positive Original Final Amounts Basis Basis (Negative) REVENUES: Fees for services S 1,314,403 S 1,314,403 S 1,200,574 S - S 1,200,574 S (113,829) Investment revenue 10,000 10,000 14,746 - 14,746 4,746 Miscellaneous - - 778 - 778 778 Total revenues 1,324,403 1,324,403 1,216,098 - 1,216,098 (108,305) EXPENDITURES: Parks and recreation 1,225,777 1,225,777 1,210,357 (153,264) 1,057,093 168,684 Capital outlay 130,500 130,500 53,306 - 53,306 77,194 Total expenditures 1,356,277 1,356,277 1,263,663 (153,264) 1,110,399 245,878 Deficiency of revenues under expenditures (31,874) (31,874) (47,565) 153,264 105,699 137,573 OTHER FINANCING SOURCES (USES): Transfers out (153,264) (153,264) - (153,264) (153,264) - Totalother financing sources (153,264) (153,264) - (153,264) (153,264) - Net change in fund balance (185,138) (185,138) (47,565) - (47,565) 137,573 Fund deficit at beginning of year 535,937 535,937 535,937 - 535,937 - Fund deficit at end of year S 350,799 S 350,799 S 488,372 S - S 488,372 S 137,573 70 CITY OF DENTON, TEXAS Exhibit XVHI SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -BUDGET TO ACTUAL SPECIAL REVENUE FUNDS: POLICE CONFISCATION FUND FOR YEAR ENDED SEPTEMBER 30, 2009 Variance with Adjustments - Actual on a Final Budget - BudgetedAmounts Actual Budgetary Budgetary Positive Original Final Amounts Basis Basis (Negative) REVENUES: Fines and forfeitures ~ 143,100 ~ 143,100 S 135,332 ~ - ~ 135,332 ~ (7,768) Investment Revenue - - 2,478 - 2,478 2,478 Total revenues 143,100 143,100 137,810 - 137,810 (5,290) EXPENDITURES: Public safety 185,620 185,620 87,550 - 87,550 98,070 Total expenditures 185,620 185,620 87,550 - 87,550 98,070 Net change in fund balance (42,520) (42,520) 50,260 - 50,260 92,780 Fund balance at beginning of year 169,984 169,984 169,984 - 169,984 - Fund balance at end of year ~ 127,464 ~ 127,464 S 220,244 ~ - ~ 220,244 ~ 92,780 71 CITY OF DENTON, TEXAS Exhibit XIX SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -BUDGET TO ACTUAL SPECIAL REVENUE FUNDS: TOURIST AND CONVENTION FUND FOR YEAR ENDED SEPTEMBER 30, 2009 Variance with Adjustments - Actual on a Final Budget - BudgetedAmounts Actual Budgetary Budgetary Positive Original Final Amounts Basis Basis (Negative) REVENUES: Taxes ~ 1,282,683 ~ 1,282,683 ~ 1,239,261 ~ - ~ 1,239,261 ~ (43,422) Investment revenue - - - - - - Totalrevenues 1,282,683 1,282,683 1,239,261 - 1,239,261 (43,422) EXPENDITURES: General government 1,408,219 1,408,219 1,396,443 - 1,396,443 11,776 Capital outlay - - 5,945 - 5,945 (5,945) Total expenditures 1,408,219 1,408,219 1,402,388 - 1,402,388 5,831 Net change in fund balance (125,536) (125,536) (163,127) - (163,127) (37,591) Fund balance at beginning of year 261,386 261,386 261,386 - 261,386 - Fund balance at end of year ~ 135,850 ~ 135,850 ~ 98,259 ~ - ~ 98,259 ~ (37,591) 72 CITY OF DENTON, TEXAS Exhibit XX SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -BUDGET TO ACTUAL SPECIAL REVENUE FUNDS: GAS WELL REVENUES FUND FOR YEAR ENDED SEPTEMBER 30, 2009 Variance with Adjustments - Actual on a Final Budget - Budgeted Amounts Actual Budgetary Budgetary Positive Original Final Amounts Basis Basis (Negative) REVENUES: Investment revenue ~ 150,000 ~ 150,000 ~ 189,750 ~ - ~ 189,750 ~ 39,750 Miscellaneous 1,719,381 1,719,381 1,269,689 - 1,269,689 (449,692) Total revenues 1,869,381 1,869,381 1,459,439 - 1,459,439 (409,942) EXPENDITURES: General government 220,000 220,000 80,996 - 80,996 139,004 Total expenditures 220,000 220,000 80,996 - 80,996 139,004 Deficiency of revenues under expenditures 1,649,381 1,649,381 1,378,443 - 1,378,443 (270,938) OTHER FINANCING SOURCES (USES): Transfers in 500,000 500,000 6,954,791 - 6,954,791 6,454,791 Transfers out (222,799) (1,522,799) (1,521,993) - (1,521,993) 806 Total other financing sources 277,201 (1,022,799) 5,432,798 - 5,432,798 6,455,597 Net change in fund balance 1,926,582 626,582 6,811,241 - 6,811,241 6,184,659 Fund balance at beginning of year - - - - - - Fund balance at end of year ~ 1,926,582 ~ 626,582 ~ 6,811,241 ~ - ~ 6,811,241 ~ 6,184,659 73 CITY OF: DENTON INTERNAL SERVICE FUNDS Internal Service Funds account for the financing of goods or services provided by one department for another. The City has five Internal Service Funds as follows: Materials Management Fund - to account for the financing of goods and services provided by Materials Management to other City departments. Such costs provided by Materials Management are billed to the other departments at standard labor charges and cost of parts plus 13 percent. Actual costs include depreciation on machinery and equipment used to provide the service. Fleet Services Fund - to account for the financing of goods and services provided by the Municipal Garage and Machine Shop to other City departments. Municipal Garage and Machine Shop billings include labor charges and cost of parts plus 25 percent. Actual costs include depreciation on the building, improvements, machinery, and equipment used to provide the service. Health Insurance Fund - to account for the accumulation of resources for the self insurance activities of the City for employee medical insurance as well as other employee insurance benefits including long-term disability, short-term disability, dental insurance, and vision insurance. Risk Retention Fund - to account for the accumulation of resources for the payment of employee insurance claims and insurance policies. Technology Services Fund - to account for the accumulation of resources to provide computer programming services, systems analysis, imaging, print shop, and office services to City departments. 75 CITY OF DENTON, TEXAS COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS SEPTEMBER 30, 2009 Materials Fleet Health Risk Management Services Insurance Retention Fund Fund Fund Fund ASSETS: Current assets: Cash, cash equivalents and investments, at fair value $ 3,623 ~ 1,138,893 $ 2,332,987 $ 5,345,076 Receivables, net of allowances: Accrued interest 25 7,795 15,967 36,583 Other 5,726 143,463 - - Merchandiseinventory 8,613,700 59,712 - - Prepaid items 657 - - - Deferred debt issuance costs 434 3,157 - - Total current assets 8,624,165 1,353,020 2,348,954 5,381,659 Noncurrent assets: Restricted assets: Cash, cash equivalents and investments, at fair value - 24,939 - - Accrued interest - 171 - - Escrowdeposit - - 241,000 - Deferred debt issuance costs 2,965 14,136 - - Capital assets, net of accumulated depreciation 727,734 3,173,834 - 3,429 Total noncurrent assets 730,699 3,213,080 241,000 3,429 Total assets 9,354,864 4,566,100 2,589,954 5,385,088 LIABILITIES: Current liabilities: Accounts payable 785,906 417,430 250 213,320 Claims payable - - 952,178 523,000 Compensated absences payable 49,049 73,135 - 8,435 Accrued interest 2,794 12,641 - - Interfund payables 6,729,511 - - - Leasespayable - - - - Payable from restricted assets: Certificate and general obligation bonds 25,884 190,890 - - Totalcurrent liabilities 7,593,144 694,096 952,428 744,755 Noncurrent liabilities: Leases payable - - - - Payable from restricted assets: General obligation bonds payable - 1,742,706 - - Certificates of obligation 463,081 151,829 - - Deferred amount onrefunding - (22,551) - - Compensated absences payable 1,615 11,547 - 13,029 Claims payable - - - 3,331,655 Municipal pension obligation 19,871 32,921 - 9,671 Other post employment benefits 15,957 25,958 - 6,667 Total noncurrent liabilities: 500,524 1,942,410 - 3,361,022 Total liabilities 8,093,668 2,636,506 952,428 4,105,777 NET ASSETS: Invested in capital assets, net of related debt 238,769 1,135,899 - 3,429 Unrestricted 1,022,427 793,695 1,637,526 1,275,882 Total net assets ~ 1,261,196 ~ 1,929,594 ~ 1,637,526 ~ 1,279,311 76 Exhibit XXI Total Technology Internal Services Service Fund Funds $ 925,871 ~ 9,746,450 6,337 66,707 238 149,427 - 8,673,412 - 657 3,501 7,092 935,947 18,643,745 827,536 852,475 5,664 5,835 1,477,134 1,718,134 3,130 20,231 3,001,636 6,906,633 5,315,100 9,503,308 6,251,047 28,147,053 210,200 1,627,106 - 1,475,178 113,072 243,691 6,583 22,018 - 6,729,511 812,566 812,566 380,145 596,919 1,522,566 11,506,989 1,245,487 1,245,487 173,855 1,916,561 764,192 1,379,102 (252) (22,803) 17,102 43,293 - 3,331,655 50,723 113,186 30,316 78,898 2,281,423 8,085,379 3,803,989 19,592,368 453,179 1,831,276 1,993,879 6,723,409 $ 2,447,058 $ 8,554,685 77 CITY OF DENTON, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009 Materials Fleet Health Risk Management Services Insurance Retention Fund Fund Fund Fund OPERATING REVENUES: Charges for goods and services ~ 8,247,709 ~ 6,837,384 $ 15,065,060 $ 2,640,777 Miscellaneous 16,614 2,707 733,467 48,146 Total operating revenues 8,264,323 6,840,091 15,798,527 2,688,923 OPERATING EXPENSES: Operating expenses before depreciation 7,784,494 6,579,975 15,032,907 2,932,118 Depreciation 18,721 122,531 - 1,176 Total operating expenses 7,803,215 6,702,506 15,032,907 2,933,294 Operating income (loss) 461,108 137,585 765,620 (244,371) NONOPERATING REVENUES (EXPENSES): Investment revenue 496 21,650 27,042 155,458 Interest expense and fiscal charges (22,659) (80,227) - - Gain (loss) on disposal of capital assets - 10,298 - - Total non-operating revenues (expenses) (22,163) (48,279) 27,042 155,458 Income before contributions and transfer' 438,945 89,306 792,662 (88,913) Transfers in - - - - Transfersout - - - - Change in net assets 438,945 89,306 792,662 (88,913) Total net assets at beginning of year 822,251 1,840,288 844,864 1,368,224 Total net assets at end of year ~ 1,261,196 ~ 1,929,594 $ 1,637,526 $ 1,279,311 78 Exhibit XXII Total Technology Internal Services Service Fund Funds $ 6,984,774 $ 39,775,704 4,179 805,113 6,988,953 40,580,817 5,372,569 37,702,063 1,434,954 1,577,382 6,807,523 39,279,445 181,430 1,301,372 36,302 240,948 (54,543) (157,429) - 10,298 (18,241) 93,817 163,189 1,395,189 98,400 98,400 (258,755) (258,755) 2,834 1,234,834 2,444,224 7,319,851 $ 2,447,058 $ 8,554,685 79 CITY OF DENTON, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009 Materials Fleet Management Services Fund Fund CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $ 8,262,295 $ 6,949,765 Cash paid to employees for services (907,206) (1,532,738) Cash paid to suppliers 7,311,830 (4,905,278) Net cash provided (used) by operations 43,259 511,749 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers out - - Transfers in - - Netcash provided (used) by noncapital financing activities - - CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Principal payments on capital debt (24,439) (632,717) Interest and fiscal charges (22,328) (79,024) Principal payments under capital lease obligation - - Proceedsfrom issuance of refunding debt - 554,129 Proceeds from the sale of fixed assets - 10,298 Acquisition and construction of capital assets - (176,847) Net cash provided (used) by capital financing activities 46,767 (324,161) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale and maturities of investment securities - 78,757 Purchase of investment securities (3,234) (1,117,102) Interest received on investments 471 13,684 Net cash provided (used) by investing activities 2,763 (1,024,661) Net increase (decrease) in cash and cash equivalents (6,271) (837,073) Cash and cash equivalents at beginning of year 6,660 962,560 Cash and cash equivalents at end of year 389 125,487 Investments, at fair value 3,234 1,038,345 Cash, cash equivalents and investments, at fair value $ 3,623 $ 1,163,832 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss) $ 461,108 $ 137,585 Adjustments: Depreciation expense 18,721 122,531 Decrease (Increase) in receivables (2,028) 109,674 Decrease (Increase) in inventories (1,279,140) 93,442 Decrease (Increase) in prepaid items (657) - Decrease (Increase) in escrow deposits - - Increase(Decrease) in accounts payable 253,717 (30,213) Increase (Decrease) in compensated absences (1,587) 19,851 Increase (Decrease) in interfund payables 557,297 - Increase(Decrease) in municipal pension obligation 19,871 32,921 Increase (Decrease) in other post employment benefits 15,957 25,958 Total adjustments 417,849 374,164 Net cash provided (used) by operating activities $ 43,259 $ 511,749 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES: Increase in fair value of investments 15 4,839 80 Exhibit XXIII Total Health Risk Technology Internal Insurance Retention Services Service Fund Fund Fund Funds $ 15,798,526 $ 2,688,923 $ 6,988,715 $ 40,688,224 - (425,013) (2,237,943) (5,102,900) (16,059,003) 2,005,698 3,156,324 33,438,133 (260,477) 258,212 1,594,448 2,147,191 - - (258,755) (258,755) - - 98,400 98,400 - - 160,355 160,355 - - (4s1,712~ (l,loss6s~ - - (sl,ss7~ (1s3,2o9~ - - 1,173,479 1,173,479 - - 83,674 637,803 - - - 10,298 - - 2,322,558 2,499,405 - - 1,568,974 1,939,902 118,585 5,477,389 423,823 6,098,554 (2,200,021) (5,763,716) (1,488,327) (10,572,400) 11,075 176,477 32,082 233,789 (2,070,361) 109,850 1,032,422 4,240,057 (2,330,838) 148,362 (1,167,303) (4,193,123) 2,582,389 427,963 1,356,362 5,335,934 251,551 576,325 189,059 1,142,811 2,081,436 4,768,751 1,564,348 9,456,114 $ 2,332,987 $ 5,345,076 $ 1,753,407 $ 10,598,925 $ 765,620 $ 244,371 ~ 181,430 ~ 1,301,372 - 1,176 1,434,954 1,577,382 - - (238) 107,408 - - - (1,185,698) - - - (657) (241,000) - - (241,000) (785,097) 480,248 (102,016) (183,361) - 4,821 (721) 22,364 - - - 557,297 - 9,671 50,723 113,186 6,667 30,316 78,898 (1,026,097) 502,583 1,413,018 845,819 $ (260,477) $ 258,212 $ 1,594,448 $ 2,147,191 9,699 15,030 10,012 39,595 81 CITY OF DENTON, TEXAS Exhibit XXIV COMBINING STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS AS OF SEPTEMBER 30, 2009 Agency Funds Other Total Payroll Developers' Agency Agency Fund Escrow Fund Funds Funds ASSETS: Cash, cash equivalents and investments, at fair value $ 910,664 $ 2,774,744 $ 195,226 $ 3,880,634 Accrued interest - 18,991 - 18,991 Other assets - - 72,953 72,953 Total assets $ 910,664 $ 2,793,735 $ 268,179 $ 3,972,578 LIABILITIES: Accounts payable $ 910,664 $ 2,793,735 $ 268,179 $ 3,972,578 Total liabilities $ 910,664 $ 2,793,735 $ 268,179 $ 3,972,578 82 CITY OF DENTON, TEXAS Exhibit XXV COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2009 Balance Balance October 1, 2008 Additions Deductions September 30, 2009 PAYROLL FUND ASSETS Cash and deposits $ 933,341 $ 63,746,947 ~ 63,769,624 ~ 910,664 Total assets $ 933,341 $ 63,746,947 ~ 63,769,624 ~ 910,664 LIABILITIES Accounts payable $ 933,341 $ 63,746,947 ~ 63,769,624 ~ 910,664 Total liabilities $ 933,341 $ 63,746,947 ~ 63,769,624 ~ 910,664 DEVELOPERS' ESCROW FUND ASSETS Cash and deposits $ 2,528,583 $ 279,806 ~ 33,645 ~ 2,774,744 Accrued interest - 18,991 - 18,991 Total assets $ 2,528,583 $ 298,797 ~ 33,645 ~ 2,793,735 LIABILITIES Accounts payable $ 2,528,583 $ 298,797 ~ 33,645 ~ 2,793,735 Total liabilities $ 2,528,583 $ 298,797 ~ 33,645 ~ 2,793,735 OTHER AGENCY FUNDS ASSETS Cash, cash equivalents and investments, at fair value $ 145,316 $ 1,460,574 ~ 1,410,664 ~ 195,226 Other assets 75,178 239,091 241,316 72,953 Total assets $ 220,494 $ 1,699,665 ~ 1,651,980 ~ 268,179 LIABILITIES Accounts payable $ 220,494 $ 1,699,665 ~ 1,651,980 ~ 268,179 Total liabilities $ 220,494 $ 1,699,665 ~ 1,651,980 ~ 268,179 TOTAL AGENCY FUNDS ASSETS Cash, cash equivalents and investments, at fair value $ 3,607,240 $ 65,487,327 ~ 65,213,933 ~ 3,880,634 Accrued interest - 18,991 - 18,991 Other assets 75,178 239,091 241,316 72,953 Total assets $ 3,682,418 $ 65,745,409 ~ 65,455,249 ~ 3,972,578 LIABILITIES Accounts payable $ 3,682,418 $ 65,745,409 ~ 65,455,249 ~ 3,972,578 Total liabilities $ 3,682,418 $ 65,745,409 ~ 65,455,249 ~ 3,972,578 83 CITY OF: DENTON CITY OF DENTON, TEXAS Exhibit XXVI CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS COMPARATIVE SCHEDULES BY SOURCE* SEPTEMBER 30, 2008 AND 2009 2009 2008 Governmental funds capital assets: Land $ 12,124,142 $ 7,130,693 Construction in progress 34,154,206 23,505,242 Buildings 53,914,596 53,914,596 Plant, machinery and equipment 43,465,773 42,386,127 Infrastructure 188,241,964 182,270,851 Total governmental funds capital assets $ 331,900,681 $ 309,207,509 Investments in governmental funds capital assets by source: General fund $ 176,469,726 $ 174,417,317 Special revenue funds 4,691,851 4,346,708 Capital projects funds 150,739,104 130,443,484 Total governmental funds capital assets $ 331,900,681 $ 309,207,509 *This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 85 CITY OF DENTON, TEXAS Exhibit XXVII CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY* SEPTEMBER 30, 2009 Plant, Machinery Construction and in Function and Activity Land Buildings Equipment Infrastructure Progress Total General government: Finance $ - ~ - ~ 23,100 $ - $ 143,058 ~ 166,158 Legal - - 285,728 - - 285,728 Municipal court/judgelclerks - - 7,705 - 108,174 115,879 Human resources - - 27,703 - - 27,703 City managerleconomic development - 808,462 261,711 - 34,450 1,104,623 Facilities management 355,470 13,519,538 4,528,514 570,021 2,041,817 21,015,360 Library - 9,386,386 6,732,195 14,715 1,982,149 18,115,445 Building inspections - - 218,888 - - 218,888 Planning/community development - 494,500 144,622 24,057 - 663,179 Engineering - - 359,827 769,237 - 1,129,064 Code Enforcement - - 230,065 - - 230,065 Airport 881,252 2,985,523 434,561 4,957,085 617,745 9,876,166 Total general government 1,236,722 27,194,409 13,254,619 6,335,115 4,927,393 52,948,258 Public works: Traffic operations - 14,600 1,373,072 15,171,476 2,701,115 19,260,263 Streets 792,665 5,000 3,970,045 155,678,451 20,424,945 180,871,106 Total public works 792,665 19,600 5,343,117 170,849,927 23,126,060 200,131,369 Parks and recreation 8,070,051 14,420,727 5,103,250 11,056,922 3,156,739 41,807,689 Public safety: Fire administration - - 80,106 - - 80,106 Fire operations 2,024,704 11,881,065 10,317,944 - 1,808,629 26,032,342 Fire prevention - - 270,293 - - 270,293 Emergency medical services - - 72,187 - - 72,187 Police - 11,993 8,681,253 - 51,995 8,745,241 Animal services - 386,802 343,004 - 1,083,390 1,813,196 Total public safety 2,024,704 12,279,860 19,764,787 - 2,944,014 37,013,365 Total governmental funds capital assets $ 12,124,142 ~ 53,914,596 ~ 43,465,773 $ 188,241,964 $ 34,154,206 ~ 331,900,681 *This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 86 CITY OF DENTON, TEXAS Exhibit XXVIII CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY* FOR THE YEAR ENDED SEPTEMBER 30, 2009 Governmental Governmental Funds Capital Funds Capital Assets Assets Function and Activity October 1, 2008 Additions Deductions September 30, 2009 General government: Finance $ 23,100 $ - $ - $ 23,100 Legal 263,158 22,570 - 285,728 Municipal courtljudgelclerks 7,705 - - 7,705 Human resources 27,703 - - 27,703 City managerleconomic development 922,996 147,177 - 1,070,173 Facilities management 18,955,730 31,262 (13,449) 18,973,543 Library 16,597,881 689,004 (1,153,589) 16,133,296 Building inspections 233,205 - (14,317) 218,888 Planninglcommunitydevebpment 567,405 95,774 - 663,179 Engineering 1,129,064 - - 1,129,064 Public transportation - 230,065 - 230,065 Airport 9,133,925 124,496 - 9,258,421 Total general government 47,861,872 1,340,348 (1,181,355) 48,020,865 Public works: Traffic operations 16,281,123 278,025 - 16,559,148 Streets 154,449,491 6,065,584 (68,914) 160,446,161 Total public works 170,730,614 6,343,609 (68,914) 177,005,309 Parks and recreation 33,715,525 5,314,212 (378,787) 38,650,950 Public safety: Fire administration 125,488 - (45,382) 80,106 Fire operations 24,012,275 330,126 (118,688) 24,223,713 Fire prevention 270,293 - - 270,293 Emergency medical services 72,187 - - 72,187 Police 8,184,207 716,596 (207,557) 8,693,246 Animal services 729,806 - - 729,806 Total public safety 33,394,256 1,046,722 (371,627) 34,069,351 Construction in progress 23,505,242 20,721,937 (10,072,973) 34,154,206 Total governmental funds capital assets $ 309,207,509 $ 34,766,828 $ (12,073,656) $ 331,900,681 *This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 87 CITY OF: DENTON STATISTICAL SECTION This part of the City of Denton's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the city's overall financial health. Contents Financial Trends These schedules contain trend information to help the reader understand how the city's financial performance and well-being have changed over time. (Tables 1- 4) Revenue Capacity These schedules contain information to help the reader assess the city's most significant local revenue source, the property tax. These tables do not include the Electric fund information due to confidentiality of information necessary for competitive rates. (Tables 5 - 8) Debt Capacity These schedules present information to help the reader assess the affordability of the city's current level of outstanding debt and the city's ability to issue additional debt in the future. (Tables 9 -12) Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the city's financial activities take place. (Tables 13 -14) Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the city's financial report relates to the services the city provides and the activities it performs. (Tables 15 -17) Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The city implemented GASB Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year. 89 CITY OF DENTON, TEXAS NET ASSETS BY COMPONENT LAST EIGHT FISCAL YEARS (accrual basis of accounting) 2002 2003 2004 2005 2006 Governmental activities Invested in capital assets, net of related debt $ 88,162,242 $ 100,876,627 $ 107,754,576 $ 107,112,321 $ 107,410,289 Restricted 1,000,906 428,426 296,731 451,046 439,658 Unrestricted 14,091,681 13,185,865 14,615,294 18,519,185 30,352,691 Total governmental activities net assets 103,254,829 114,490,918 122,666,601 126,082,552 138,202,638 Business-type activities Invested in capital assets, net of related debt 131,316,531 163,784,452 172,589,102 193,657,258 213,074,701 Restricted 28,456,447 30,558,417 35,812,117 30,863,580 30,974,925 Unrestricted 94,356,569 78,074,629 78,543,929 76,726,025 90,843,185 Total business-type activities net assets 254,129,547 272,417,498 286,945,148 301,246,863 334,892,811 Primary government Invested in capital assets, net of related debt 219,478,773 264,661,079 280,343,678 300,769,579 320,484,990 Restricted 29,457,353 30,986,843 36,108,848 31,314,626 31,414,583 Unrestricted 108,448,250 91,260,494 93,159,223 95,245,210 121,195,876 Total primary government net assets $ 357,384,376 $ 386,908,416 $ 409,611,749 $ 427,329,415 $ 473,095,449 Source: Comprehensive Annual Financial Reports 90 Table 1 2007 2008 2009 $ 99,858,383 $ 102,040,021 $ 102,110,134 886,141 1,454,579 1,947,553 30,738,026 37,610,966 38,252,078 131,482,550 141,105,566 142,309,765 242,015,614 263,325,859 282,463,031 31,015,188 33,087,609 33,380,595 107,837,825 107,545,434 109,826,810 380,868,627 403,958,902 425,670,436 341,873,997 365,365,880 384,573,165 31,901,329 34,542,188 35,328,148 138,575,851 145,156,400 148,078,888 $ 512,351,177 $ 545,064,468 $ 567,980,201 91 CITY OF DENTON, TEXAS CHANGES IN NET ASSETS LAST EIGHT FISCAL YEARS (accrual basis of accounting) 2002 2003 2004 2005 2006 EXPENSES Governmental activities: General government X16,240,418 ~ 22,933,107 S 26,411,608 ~ 26,675,799 ~ 22,165,661 Public safety 27,322,153 28,837,158 30,508,765 33,642,445 36,626,635 Public works 13,691,514 10,274,822 11,053,131 11,986,881 12,485,281 Parks and recreation 7,362,939 8,419,508 9,418,580 9,912,996 10,497,241 Interest expense 4,252,970 4,186,051 4,494,851 4,175,466 4,333,428 Total governmental activities expenses 68,869,994 74,650,646 81,886,935 86,393,587 86,108,246 Business-type activities: Electric system 99,831,597 113,674,296 119,650,157 132,829,976 145,368,132 Water system 18,095,107 20,424,805 21,278,791 22,380,589 26,708,095 Wastewater system 15,555,687 16,560,308 18,528,348 18,808,374 19,027,926 Solid waste 11,658,565 12,366,910 11,301,940 13,168,880 13,454,556 Building inspections 1,731,031 - - - - Total business-type activities expenses 146,871,987 163,026,319 170,759,236 187,187,819 204,558,709 Total primary government expenses 215,741,981 237,676,965 252,646,171 273,581,406 290,666,955 PROGRAM REVENUES Governmental activities: Charges for services: General government 1,428,098 3,654,387 3,417,657 3,333,866 3,904,941 Public safety 4,082,859 4,371,407 3,382,791 4,965,056 6,023,100 Public works 1,085,200 1,803,025 1,280,423 1,086,387 802,711 Parks and recreation 1,597,496 347,110 2,143,756 2,613,567 3,234,347 Operating grants and contributions 2,480,309 3,221,264 3,264,777 2,995,978 3,712,817 Capital grants and contributions 6,379,228 14,023,056 14,046,071 7,426,194 5,536,786 Total governmental activities program revenues 17,053,190 27,420,249 27,535,475 22,421,048 23,214,702 Business-type activities: Charges for services: Electric system 91,315,761 105,509,934 111,742,276 129,343,037 149,419,800 Water system 22,352,636 24,552,658 24,331,555 24,890,289 33,436,651 Wastewater system 15,398,218 17,144,312 19,210,529 20,423,424 23,670,458 Solid waste 10,383,296 11,728,024 13,172,556 13,600,512 14,624,132 Building inspections 1,415,998 - - - - Capital grants and contributions 8,504,900 19,022,045 8,415,470 9,808,842 10,022,654 Total business-type activities program revenues 149,370,809 177,956,973 176,872,386 198,066,104 231,173,695 Total primary government program revenues 166,423,999 205,377,222 204,407,861 220,487,152 254,388,397 NET (EXPENSE)IREVENUE Governmental activities (51,816,804) (47,230,397) (54,351,460) (63,972,539) (62,893,544) Business-type activities 2,498,822 14,930,654 6,113,150 10,878,285 26,614,986 Total primary government program net expense ~ (49,317,982) S (32,299,743) ~ (48,238,310) ~ (53,094,254) ~ (36,278,558) 92 Table 2 2007 2008 2009 ~ 22,145,804 ~ 26,408,949 ~ 27,482,131 42,161,674 43,426,526 45,368,783 14,008,867 15,448,473 15,816,065 11,564,247 12,927,020 12,755,037 4,658,128 5,372,868 5,733,268 94,538,720 103,583,836 107,155,284 123,926,967 138,791,009 124,901,262 25,839,614 26,226,068 28,636,190 18,785,353 19,413,247 19,909,229 15,451,025 17,065,295 18,036,331 184,002,959 201,495,619 191,483,012 278,541,679 305,079,455 298,638,296 3,694,869 3,310,592 4,792,856 6,160,611 6,461,037 6,554,619 800,378 853,091 586,377 3,220,837 3,292,528 2,990,921 2,991,224 3,306,325 2,281,136 5,399,220 7,308,398 3,641,296 22,267,139 24,531,971 20,847,205 128,973,477 138,467,222 128,511,236 27,830,767 30,843,797 30,067,774 22,634,454 23,184,369 22,342,174 15,967,051 16,660,375 18,386,616 8,440,634 5,742,139 8,099,722 203,846,383 214,897,902 207,407,522 226,113,522 239,429,873 228,254,727 (72,271,581) (79,051,865) (86,308,079) 19,843,424 13,402,283 15,924,510 ~ (52,428,157) ~ (65,649,582) ~ (70,383,569) (continued) 93 CITY OF DENTON, TEXAS CHANGES IN NET ASSETS LAST EIGHT FISCAL YEARS (accrual basis of accounting) 2002 2003 2004 2005 2006 GENERAL REVENUES AND OTHER CHANGES IN NET ASSETS Governmental activities: Taxes: Property tax X19,075,268 ~ 20,964,738 S 23,149,916 ~ 26,678,783 ~ 30,000,847 Sales tax 15,875,935 16,047,297 17,871,380 18,998,057 20,343,413 Franchise tax 11,930,612 12,571,989 13,215,882 14,250,484 16,499,994 Hotel occupancy tax 938,225 855,879 911,505 988,573 1,132,500 Beverage tax 174,264 192,243 208,855 215,872 257,950 Bingo tax 20,673 28,146 21,127 25,466 24,260 Investment income 3,990,679 1,451,106 1,332,568 1,148,517 1,967,473 Miscellaneous 3,246,851 5,354,783 4,213,163 4,218,245 3,892,087 Transfers 1,073,857 1,000,305 1,410,947 864,493 895,106 Total governmental activities 56,326,364 58,466,486 62,335,343 67,388,490 75,013,630 Business-type activities: Investment income 11,819,512 4,143,039 2,698,551 3,252,342 7,298,870 Miscellaneous 379,357 214,563 914,087 1,035,581 627,198 Transfers (1,073,857) (1,000,305) (1,410,947) (864,493) (895,106) Total business-type activities 11,125,012 3,357,297 2,201,691 3,423,430 7,030,962 Total primary government 67,451,376 61,823,783 64,537,034 70,811,920 82,044,592 CHANGE IN NET ASSETS Governmental activities 4,509,560 11,236,089 7,983,883 3,415,951 12,120,086 Business-type activities 13,623,834 18,287,951 8,314,841 14,301,715 33,645,948 Total primary government ~ 18,133,394 ~ 29,524,040 S 16,298,724 ~ 17,717,666 ~ 45,766,034 Source: Comprehensive Annual Financial Reports 94 Table 2 2007 2008 2009 ~ 34,756,356 ~ 41,499,791 ~ 43,187,433 20,653,932 21,440,839 20,466,772 15,197,943 16,197,042 15,669,981 1,268,627 1,369,667 1,239,261 294,623 319,541 338,700 23,708 23,653 22,915 3,632,744 3,287,282 2,413,339 3,199,131 4,214,028 3,327,758 (13,475,571) 323,038 846,119 65,551,493 88,674,881 87,512,278 12,108,632 7,817,671 6,075,453 548,189 195,055 557,690 13,475,571 (323,038) (846,119) 26,132,392 7,689,688 5,787,024 91,683,885 96,364,569 93,299,302 (6,720,088) 9,623,016 1,204,199 45,975,816 21,091,971 21,711,534 ~ 39,255,728 ~ 30,714,987 ~ 22,915,733 95 CITY OF DENTON, TEXAS FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2000 2001 2002 2003 General fund Reserved for encumbrances $ 932,374 $ 199,135 ~ 431,528 $ 137,051 Unreserved, designated - - - - Unreserved, undesignated 8,536,438 9,571,700 8,033,092 8,442,942 Total general fund 9,468,812 9,770,835 8,464,620 8,579,993 All other governmental funds Reserved for: Debt service 822,913 1,594,620 934,406 428,426 Capital projects 20,007,072 27,293,278 37,584,615 24,389,226 Encumbrances 3,349,161 3,457,022 2,899 14,295 Unreserved, undesignated reported in: Special revenue funds 296,306 509,513 2,390,065 1,678,620 Total all other governmental funds $ 24,475,452 $ 32,854,433 $ 40,911,985 ~ 26,510,567 Source: Comprehensive Annual Financial Reports 96 Table 3 2004 2005 2006 2007 2008 2009 $ 112,292 $ 210,818 ~ 242,088 ~ - ~ 123,696 $ - - - 1,550,000 4,360,649 - - 9,504,988 9,718,368 13,264,027 18,199,161 25,253,797 22,794,955 9,617,280 9,929,186 15,056,115 22,559,810 25,377,493 22,794,955 296,731 451,046 439,658 886,141 1,954,955 2,414,288 26,548,130 27,671,252 32,840,640 48,971,610 57,887,531 35,339,606 - - - - 5,515 - 3,607,200 3,614,489 5,534,701 8,896,111 9,534,627 16,435,449 $ 30,452,061 $ 31,736,787 $ 38,814,999 $ 58,753,862 $ 69,382,628 $ 54,189,343 97 CITY OF DENTON, TEXAS CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2000 2001 2002 2003 REVENUES: Taxes: Property tax $ 13,957,144 $ 16,579,367 $ 18,894,068 $ 20,964,737 Sales tax 15,131,637 17,489,408 15,875,933 16,047,297 Hotel occupancy tax 838,152 910,907 938,225 855,879 Beverage tax 166,523 165,379 174,264 192,243 Bingo tax 21,509 26,856 20,675 28,147 Licenses and permits 441,831 233,219 91,049 1,151,169 Franchise fees 9,958,500 10,709,710 11,930,612 12,571,989 Fines and forfeitures 2,680,352 3,222,517 3,522,895 3,422,952 Fees for services 3,359,523 4,118,361 6,818,363 8,556,002 Investment revenue 2,695,225 1,835,650 2,963,755 1,451,106 Intergovernmental 5,763,321 6,397,702 3,573,399 5,757,543 Miscellaneous 2,646,375 1,039,093 656,186 1,304,367 Total revenues 57,660,092 62,728,169 65,459,424 72,303,431 EXPENDITURES: General government 14,565,496 16,750,445 14,748,842 21,025,986 Public safety 22,679,278 23,957,206 26,155,876 28,406,261 Public works 4,888,271 6,954,265 7,949,472 4,627,292 Parks and recreation 5,341,227 6,336,352 6,962,373 8,094,780 Capital outlay 5,724,897 15,842,919 15,005,659 22,845,204 Debt service: Principal retirement 3,601,439 3,853,087 5,019,164 5,027,222 Advance refunding escrow - - - - Bond issuance costs - - - - Interestand other charges 3,327,544 3,285,426 4,215,673 4,487,778 Total expenditures 60,128,152 76,979,700 80,057,059 94,514,523 Excess (deficiency) of revenues over (under) expenditures (2,468,060) (14,251,531) (14,597,635) (22,211,092) OTHER FINANCING SOURCES (USES): Refunding bonds issued - - - 4,130,000 Payment to refunded bond escrow agent - - - (4,130,000) Issuance of long-term debt 6,625,000 20,992,749 20,120,000 6,913,483 Premium on debt issuance - - - - Proceeds of capital lease - - - - Sale of capital assets - - - - Transfers in 2,349,442 3,193,675 1,454,541 2,192,680 Transfers (out) (1,996,266) (1,253,889) (1,906,600) (1,181,116) Total other financing sources (uses) 6,978,176 22,932,535 19,667,941 7,925,047 NET CHANGE IN FUND BALANCES $ 4,510,116 $ 8,681,004 $ 5,070,306 $ (14,286,045) Debt service as a percentage of noncapital expenditures 12.7% 11.7% 14.2% 13.3% Source: Comprehensive Annual Financial Reports 98 Table 4 2004 2005 2006 2007 2008 2009 $ 22,986,590 $ 26,640,930 $ 30,019,657 $ 34,662,336 $ 41,436,012 $ 42,980,209 17,684,899 18,998,058 20,343,413 20,653,932 21,440,839 20,466,772 911,505 988,573 1,132,500 1,268,627 1,369,667 1,239,261 208,855 215,872 257,950 294,623 319,541 338,700 21,127 25,465 24,260 23,708 23,653 22,915 1,700,044 1,235,337 1,383,169 1,097,323 1,080,580 1,265,733 13,215,882 14,250,484 16,499,994 15,197,943 16,197,042 15,669,981 3,338,979 3,959,476 4,639,922 5,065,049 5,262,189 4,972,905 10,022,001 8,255,342 6,779,904 7,624,265 7,951,665 7,595,440 1,332,568 1,148,517 1,967,473 3,632,744 3,287,282 2,415,817 6,655,240 5,443,517 5,254,058 3,852,513 8,094,307 4,049,439 5,012,607 1,931,762 3,424,786 3,006,751 3,778,673 3,183,891 83,090,297 83,093,333 91,727,086 96,379,814 110,241,450 104,201,063 24,894,438 22,272,681 20,539,006 20,158,739 24,110,329 25,223,041 29,689,083 33,057,120 35,813,329 37,755,272 40,855,112 42,540,423 4,752,409 5,247,546 5,206,224 5,624,287 6,596,191 6,753,314 8,404,074 9,176,686 9,548,416 10,234,361 11,557,168 11,444,577 13,463,619 11,760,356 9,056,102 17,237,922 23,275,703 21,863,647 5,502,897 5,642,487 5,914,819 6,808,439 8,479,136 9,479,243 - 216,148 - - - 148,575 - 293,668 70,745 314,286 530,137 105,392 4,544,502 4,018,765 4,210,628 4,389,307 5,261,346 5,570,770 91,251,022 91,685,457 90,359,269 102,522,613 120,665,122 123,128,982 (8,160,725) (8,592,124) 1,367,817 (6,142,799) (10,423,672) (18,927,919) - 7,316,688 - 24,780,000 24,595,000 6,120,000 - (7,491,938) - - (25,117,336) (6,265,255) 11,805,000 9,070,000 9,550,000 - 22,230,000 - - 404,361 49,644 528,630 937,755 246,012 - - - 1,108,131 69,897 - - - - - 582,087 44,865 3,496,765 3,341,047 4,095,018 12,323,132 2,406,678 10,286,496 (2,162,259) (2,451,402) (2,857,338) (5,154,536) (1,833,960) (9,280,022) 13,139,506 10,188,756 10,837,324 33,585,357 23,870,121 1,152,096 $ 4,978,781 $ 1,596,632 ~ 12,205,141 $ 27,442,558 $ 13,446,449 $ (17,775,823) 12.9% 12.7% 12.5% 13.5% 14.7% 15.1% 99 CITY OF DENTON, TEXAS Table 5 ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Estimated Market Value Less: Total Taxable Total Direct Fiscal Real Personal Tax-Exempt Assessed Tax Year Property Property Property Value Rate 2000 2,551,781,177 529,990,564 431,651,247 2,650,120,494 0.50815 2001 2,959,019,481 665,990,501 565,373,249 3,059,636,733 0.52815 2002 3,343,400,379 618,020,979 594,129,333 3,367,292,025 0.54815 2003 3,761,322,990 654,159,101 712,069,576 3,703,412,515 0.54815 2004 4,129,344,174 659,848,833 746,990,136 4,042,202,871 0.54815 2005 4,468,428,305 695,572,385 789,056,859 4,374,943,831 0.59815 2006 4,876,565,660 733,405,037 820,593,886 4,789,376,811 0.60815 2007 5,475,770,871 952,273,984 986,815,946 5,441,228,909 0.62652 2008 6,159,567,238 969,219,527 1,039,286,990 6,089,499,775 0.66652 2009 6,443,103,507 938,547,047 1,090,291,442 6,291,359,112 0.66652 Source: Denton Central Appraisal District 100 CITY OF DENTON, TEXAS Table 6 PROPERTY TAX RATES (PER $100 OF ASSESSED VALUE) DIRECT AND OVERLAPPINGI GOVERNMENTS LAST TEN FISCAL YEARS Overlapping Rates Denton City of Denton Independent Total Direct Fiscal Operating Debt Service Total Denton School & Overlapping Year Rate Rate Direct Rate County District Rates 2000 0.31948 0.18867 0.50815 0.23504 1.70000 2.44319 2001 0.31948 0.20867 0.52815 0.23193 1.84400 2.60408 2002 0.31948 0.22867 0.54815 0.25193 1.85400 2.65408 2003 0.33816 0.20999 0.54815 0.24897 1.86400 2.66112 2004 0.34928 0.19887 0.54815 0.24717 1.86400 2.65932 2005 0.39928 0.19887 0.59815 0.25480 1.86400 2.71695 2006 0.42928 0.17887 0.60815 0.24648 1.86400 2.71863 2007 0.44765 0.17887 0.62652 0.23192 1.76400 2.62244 2008 0.44765 0.21887 0.66652 0.23577 1.49000 2.39229 2009 0.44765 0.21887 0.66652 0.24980 1.49000 2.40632 Source: City of Denton Tax Office, Denton County Tax Office, and Denton Independent School District lOverlapping rates are those of local and county governments that apply to property owners with the City of Denton. 101 CITY OF: DENTON CITY OF DENTON, TEXAS Table 7 PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 2009 2000 Percentage of Percentage of Taxable Total Taxable Taxable Total Taxable Assessed Assesed Assessed Assesed Name of Taxpayer Value Valuer Name of Taxpayer Value Value2 Columbia Medical Center of Denton Denton (Denton Regional Regional/Columbia Hospital) $ 83,900,462 1.33% Medical Center $ 56,007,908 2.11% Inland Western General Telephone Crossing 53,041,520 0.84% (Verizon Southwest) 46,254,880 1.75% PACCAR Inc (Peterbilt) 52,109,610 0.83% Peterbilt Motors 44,506,051 1.68% Verizon Southwest 32,549,140 0.52% United Copper 30,897,563 1.17% GEL Timberlands 29,500,000 0.47% Tetra Pak 30,817,528 1.16% Aldi, LLC 25,554,780 0.41% Wal-Mart Supercenter 19,537,944 0.74% Denton Education Anderson Housing Corp 21,693,000 0.34% Merchandisers 19,144,148 0.72% SCI Gateway at Denton Fund 25 LLC 20,717,990 0.33% Golden Triangle Mall 17,167,232 0.65% CNL Retirement CRSI 19,778,423 0.31% International Isotopes 16,416,693 0.62% Value Family Properties 19,776,368 0.31% Sally Beauty Supply 14,022,213 0.53% Total $ 358,621,293 5.69% Total $ 294,772,160 11.13% Source: Denton Central Appraisal District iTotal taxable assessed value for tax year 2008 (fiscal year 2009) is 56,291,359,112. Total taxable assessed value for tax year 1999 (fiscal year 2000) is 52,650,120,494. 103 CITY OF DENTON, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST FIVE FISCAL YEARS Taxes Levied Adjustments Adjusted Collected Within the Within the to Levy in Taxes Levied Fiscal Year of the Levy Collections Fiscal Fiscal Year Subsequent for the Percentage in Subsequent Year of the Levy Years Fiscal Year Amount of Levy Years 2005 $ 26,457,399 $ 170,677 $ 26,628,076 $ 26,016,239 97.70% $ 522,251 2006 29,545,033 122,730 29,667,763 29,162,978 98.30% 415,507 2007 34,273,862 290,832 34,564,694 33,872,404 98.00% 548,044 2008 40,816,256 (1,261) 40,814,995 40,354,528 98.87% 224,094 2009 43,086,123 - 43,086,123 42,423,707 98.46% - Source: City of Denton Tax Office and Denton Central Appraisal District Only five years of data included due to inability to obtain correct data from previous tax software. 104 Table 8 Total Collections to Date Percentage Amount of Levy $ 26,538,490 99.66% 29,578,485 99.70% 34,420,448 99.58% 40,578,622 99.42% 42,423,707 98.46% 105 CITY OF DENTON, TEXAS RATIO OF OUTSTANDING DEBT BY TYPE LAST NINE FISCAL YEARS Governmental Activities Business-Type Activities General Certificates General Certificates Fiscal Obligation of Other Revenue Obligation of Other Year Bonds Obligation Obligations Bonds Bonds Obligation Obligations 2001 $ 49,950,882 $ 21,924,825 ~ 1,022 $ 211,035,241 $ 1,759,622 $ 8,504,895 $ 3,148,744 2002 58,663,791 27,628,284 635,442 274,875,129 1,508,017 12,188,878 3,141,222 2003 59,721,870 30,148,929 696,508 304,366,352 2,191,168 11,765,612 3,328,798 2004 55,893,370 40,540,162 1,244,678 293,105,000 2,046,630 11,325,838 3,141,222 2005 58,870,849 41,791,588 2,210,846 281,120,000 3,904,151 9,233,412 3,141,222 2006 58,742,900 46,700,000 3,559,742 277,305,000 3,582,100 11,975,000 3,141,222 2007 70,650,317 51,355,100 2,393,684 281,750,000 3,099,683 13,889,900 7,032,986 2008 80,814,594 55,097,550 1,819,298 282,200,000 4,865,406 12,952,450 5,713,041 2009 77,358,650 48,611,150 2,769,671 266,705,000 4,366,350 11,243,850 3,161,549 Source: Comprehensive Annual Financial Reports Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. See Table 13 for personal income and population data. 106 Table 9 Total Percentage Primary of Personal Per Government Income Capita $ 296,325,231 0.01879% 3,471.19 378,640,763 0.02248% 4,190.59 412,219,237 0.02006% 4,399.49 407,296,900 0.01889% 4,143.91 400,272,068 0.01764% 3,877.85 405,005,964 0.01680% 3,736.87 430,171,670 0.01661% 3,780.07 443,462,339 0.01729% 3,839.30 414,216,220 0.01532 % 3,483.62 107 CITY OF DENTON, TEXAS Table 10 RATIO OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS General Bonded Debt Outstanding Percentage of General Certificates Less: Amounts Actual Taxable Fiscal Obligation of Available in Debt Value of Per Year Bonds Obligation Service Fund Total Property) Capital 2000 40,105,923 20,881,000 822,913 60,164,010 2.27% 704.77 2001 51,569,223 30,571,000 1,594,620 80,545,603 2.63% 891.43 2002 60,185,495 39,806,000 934,406 99,057,089 2.94% 1,057.21 2003 61,913,038 41,978,000 428,426 103,462,612 2.79% 1,052.65 2004 57,940,000 51,866,000 296,731 109,509,269 2.71% 1,060.93 2005 62,775,000 51,025,000 451,046 113,348,954 2.59% 1,045.84 2006 62,325,000 58,675,000 439,658 120,560,342 2.52% 1,059.41 2007 73,750,000 65,245,000 886,141 138,108,859 2.54% 1,195.69 2008 80,814,594 55,097,550 1,954,955 133,957,189 2.20% 1,126.60 2009 77,358,650 48,611,150 2,414,288 123,555,512 1.96% 1,039.12 Source: Comprehensive Annual Financial Reports Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 1See Table 5 for property value data. See Table 13 for population data. 108 CITY OF DENTON, TEXAS Table 11 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2009 Estimated Estimated Share of Debt Percentage Overlapping Governmental Unit Outstanding Applicable Debt Debt repaid with property taxes: Denton Independent School District $ 654,154,238 66.47% $ 434,816,322 Denton County 295,214,740 12.90% 38,082,701 Aubrey Independent School District 45,495,358 0.01% 4,550 Krum Independent School District 48,835,303 1.78% 869,268 Argyle Independent School District 57,578,407 7.30% 4,203,224 Sanger Independent School District 30,927,685 0.11% 34,020 Ponder Independent School District 33,400,000 2.36% 788,240 Pilot Point Independent School District 19,674,011 0.12% 23,609 Subtotal, overlapping debt 478,821,934 City of Denton, direct debt 100.00% 125,969,800 Total direct and overlappping debt $ 604,791,734 Source: Compiled from data from the "Texas Municipal Report" prepared by the Municipal Advisory Council. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Denton. This process recognizes that, when considering the City of Denton's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should betaken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. 1The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the overlapping government's taxable assessed value that is within the City of Denton's boundaries and dividing it by the overlapping government's total taxable assessed value. 109 CITY OF DENTON, TEXAS PLEDGED REVENUE COVERAGE LAST EIGHT FISCAL YEARS Utility System Revenue Bonds Less: Fair Market Less: Value Operating Adjustment Expenses Fiscal Operating Investment to Investment Impact Fee Before Year Revenue Revenue Revenue2 Revenue Depreciation 2002 ~ 124,769,615 $ 8,406,425 ~ 2,515,297 $ 4,294,000 $ 113,557,718 2003 140,450,819 4,320,188 (2,599,123) 5,150,000 125,351,837 2004 148,512,689 2,618,296 (1,523,523) 6,771,671 134,885,329 2005 170,450,120 3,114,254 (2,027,258) 4,206,630 150,549,007 2006 200,970,560 7,061,556 721,058 5,556,349 166,537,867 2007 173,879,713 11,390,142 2,710,742 5,558,985 142,890,603 2008 185,874,450 7,458,605 69,292 6,620,938 158,245,885 2009 176,464,357 5,817,918 930,936 4,456,827 147,392,056 Source: Comprehensive Annual Financial Reports The Utility System includes the Electric, Water, and Wastewater funds. 2For the coverage calculation, the fair market adjustment to the value of investments is excluded. 3For the coverage calculation, franchise fees and return on investment payments to the General Fund are excluded from operating expenses. 4Revenue bond covenants require a times coverage of 1.25 or greater. 110 Table 12 Add: Franchise Fees and Return Debt Service on Investment Net Paid to Available Times General Fund3 Revenue Principal Interest Coverage4 $ 8,487,570 ~ 29,884,595 ~ 7,345,000 $ 12,130,021 1.53 9,207,505 36,375,798 9,965,000 14,324,178 1.50 9,596,617 34,137,467 11,255,000 15,979,950 1.25 10,922,442 40,171,697 12,545,000 14,429,925 1.49 12,839,184 59,168,724 12,330,000 13,798,811 2.26 11,283,647 56,511,142 13,325,000 12,265,461 2.21 11,862,151 53,500,967 14,840,000 13,088,928 1.92 11,325,647 49,741,757 15,670,000 13,073,992 1.73 111 CITY OF DENTON, TEXAS Table 13 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS Fiscal Estimated Personal Per Capita Median Grade School University Unemployment Year Population) Income Income2 Agee Enrollment3 Enrollment4 Rates 2000 82,976 996,790,688 12,013 26.8 13,667 33,317 3.1 2001 85,367 1,577,069,958 18,474 26.8 14,408 34,026 4.7% 2002 90,355 1,684,488,265 18,643 26.8 13,600 36,985 7.4% 2003 93,697 2,054,962,604 21,932 26.9 15,128 38,612 7.4% 2004 98,288 2,155,652,416 21,932 27.1 16,932 39,618 5.8% 2005 103,220 2,269,291,700 21,985 27.1 18,395 41,204 3.3% 2006 108,381 2,410,068,297 22,237 27.1 19,701 42,408 3.5% 2007 113,800 2,590,088,000 22,760 27.1 20,880 43,133 3.4% 2008 115,506 2,564,348,706 22,201 27.9 22,221 43,770 4.4% 2009 118,904 2,703,758,056 22,739 28.8 22,761 45,658 6.5% Sources: 1City of Denton Planning and Development Department estimate 2United States Census and Denton Chamber of Commerce DDenton Independent School District 4University of North Texas' and Texas Woman's University's Denton campus enrollment STexas Workforce Commission estimate 112 CITY OF DENTON, TEXAS Table 14 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO 2009 2000 Percentage Percentage of Total City of Total City Name of Employer Employees Employment Name of Employer Employees Employment University of North Texas 7,949 12.47% University of North Texas 5,900 10.07% Denton Independent School 2,600 4.08% Peterbilt Motors 2,050 3.50% District Peterbilt Motors- 1,450 2.27% Denton Independent 1,865 3.18% Headquarters & Plant School District Denton County o 0 (in Denton) 1,441 2.26 /o Boeing Electronics 1,733 2.96 /o Denton State School 1,535 2.41% Denton State School 1,353 2.31% City of Denton 1,319 2.07% Texas Woman's 1,300 2.22% University Texas Woman's University 1,303 2.04% Denton County 1,227 2.09% Denton Regional Medical 850 1.33% City of Denton 1,096 1.87% Center Presbyterian Hospital of 800 1.25% Denton Regional Medical 800 1.37% Denton Center Victor Equipment 600 0.94% Victor Equipment 582 0.99% Total 19,847 31.12% Total 17,906 30.56% Source: Office of Economic Development & Denton Chamber of Commerce 113 CITY OF DENTON, TEXAS FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Full-time Equivalent Employees for Fiscal Year Function J Program 2000 2001 2002 2003 2004 General government 179.03 200.53 203.75 202.75 202.75 Public safety Police 173.29 176.62 178.14 180.14 183.73 Fire 145.25 151.25 151.25 152.25 152.25 Animal services 8.00 8.00 8.00 8.00 8.00 Public works 52.00 61.00 83.00 84.00 84.00 Parks and recreation 108.15 115.15 117.17 136.37 152.34 Electric system 128.75 136.75 107.50 108.50 109.50 Water system 106.71 110.21 112.71 113.71 120.00 Wastewater system 72.90 81.00 76.00 79.12 80.12 Solid waste 69.25 88.50 88.50 88.50 88.50 Materials management 10.00 13.00 13.00 15.00 15.00 Fleet services 16.50 18.50 18.50 20.00 19.00 Technology services 30.75 29.75 34.75 33.75 33.75 Risk Retention - - - - - Total 1,100.58 1,190.26 1,192.27 1,222.09 1,248.94 Source: City of Denton Budget Office 114 Table 15 2005 2006 2007 2008 2009 211.75 192.50 192.38 197.38 208.38 198.23 206.23 212.23 217.23 217.23 160.25 162.25 162.25 162.25 163.25 8.00 8.00 8.00 8.00 8.00 77.00 37.00 38.00 39.00 39.00 149.62 141.85 142.07 144.15 144.15 110.50 110.50 112.00 120.50 125.00 130.00 161.75 164.50 165.00 160.50 83.22 83.12 82.87 83.37 84.87 82.50 85.00 87.00 88.00 93.50 14.00 12.50 12.50 12.50 13.50 16.00 17.00 18.00 19.00 21.00 29.75 26.00 24.50 25.00 25.00 - - 5.00 5.00 5.00 1,270.82 1,243.70 1,261.30 1,286.38 1,308.38 115 CITY OF DENTON, TEXAS OPERATING INDICATORS BY FUNCTIONIPROGRAM LAST TEN FISCAL YEARS Fiscal Year Function I Program 2000 2001 2002 2003 Public Safety Police Calls for service 57,466 57,704 68,869 68,727 Traffic citations issued 29,838 38,628 39,138 38,181 Fire Fire calls for service 2,200 2,200 2,800 2,894 EMS calls for service 6,445 7,200 7,200 8,808 Inspections (Businesses) 3,540 2,794 2,802 3,114 Animal Services Animals sheltered 4,304 5,234 5,098 4,769 Animals adopted, transferred, or returned 2,171 2,269 3,015 1,487 Public Works Street repaving (square yards) 43,978 50,000 107,956 211,113 Pot holes repaired 4,000 5,000 8,304 5,162 Cutouts base failures (square feet) 108,458 150,000 165,335 94,876 Crack seal maintenance (linear feet) NA NA NA NA Parks and Recreation Attendance Leisure Services 980,000 869,960 893,710 1,026,309 Water Park NA NA NA 102,637 Total Acres Maintained 1,846 1,916 2,084 2,107 Water System Number of customers 19,662 21,419 23,098 24,089 Annual finished water production (in thousand gallons) 5,386,680 4,966,603 5,070,200 5,636,768 Wastewater System Number of customers 18,340 19,825 21,455 22,561 Annual wastewater discharge (in thousand gallons) 4,756,640 5,190,410 4,687,960 4,689,450 Solid Waste Number of customers (residential and commercial) 21,550 23,265 23,783 24,254 MSW Landfilled (tons) 111,850 110,172 107,901 107,061 Recycling collections (tons) 16,732 14,060 11,965 15,322 Source: Various city departments Note: Fire calls for 1997-2002 were rounded to the nearest hundred by department. ~ linear feet 2 lane miles of repaving and reconstruction 3 curbside residential recycling program introduced 116 Table 16 2004 2005 2006 2007 2008 2009 69,312 73,154 73,346 74,397 80,117 83,557 34,804 36,757 39,483 31,131 31,610 36,598 2,917 3,013 3,495 3,539 3,703 3,391 7,012 6,527 6,840 6,544 6,862 7,017 3,000 3,727 3,882 3,144 3,591 3,622 5,166 4,320 4,443 5,427 4,967 4,341 1,777 2,091 2,167 2,297 2,119 2,193 32.41 19.44 16.41 23.38 41.28 17.43 4,004 5,479 3,971 8,153 6,841 11,593 79,010 124,442 171,543 44,566 75,877 126,691 NA 40,338 79,314 42,624 40,288 55,894 981,883 952,866 985,778 1,048,500 1,010,351 1,031,530 107,198 141,495 162,039 163,000 169,000 179,386 2,190 2,208 2,262 2,293 2,633 2,633 25,303 26,715 27,884 28,898 29,679 30,288 5,369,957 5,901,750 7,097,403 5,671,124 6,582,151 6,210,472 23,550 24,894 26,079 27,185 28,019 28,647 4,967,440 5,039,240 4,428,700 5,174,100 5,263,780 4,733,839 25,154 26,062 27,805 28,954 30,680 31,173 122,113 122,477 114,060 128,644 136,024 160,378 16,353 16,195 17,762 21,179 24,248 44,540 117 CITY OF DENTON, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal Year Function I Program 2000 2001 2002 2003 2004 Public safety Police Police stations 1 1 1 1 1 Police patrol units 103 104 138 141 143 Fire Fire stations 6 6 6 6 6 Emergency vehicles 16 20 20 21 22 Animal services Animals shelters 1 1 1 1 1 Public works Lane miles added per year 74.02 36.30 32.15 34.95 14.79 Streetlights NA 5,426 5,713 6,086 6,931 Parks and recreation Parks 26 27 28 33 34 Park acreage 743 813 981 1,177 1,240 Recreation centers 10 10 10 11 12 Water system Water mains (miles) 422 433 458 478 497 Raw water (in thousand gallons) 5,647,014 5,185,568 5,472,708 6,168,039 6,046,070 Wastewater system Wastewater mains (miles) 393 396 414 426 442 Maximum daily capacity (in million gallons) 15 15 15 15 21 Solid waste Landfills 1 1 1 1 1 Source: Various city departments 118 Table 17 2005 2006 2007 2008 2009 1 1 1 1 1 148 149 149 147 149 6 6 7 7 7 21 22 24 24 26 1 1 1 1 1 24.56 25.34 22.66 10.10 14.79 7,104 7,118 7,008 7,011 7,015 34 37 30 37 37 1,205 1,272 1,210 1,444 1,449 13 13 13 13 13 511 520 530 533 550 6,234,076 7,322,361 5,801,994 6,694,734 6,471,258 452 459 470 481 488 21 21 21 21 25 1 1 1 1 1 119 CITY OFri QN CITY OF DENTON, TEXAS Exhibit XXIX SCHEDULE OF EXPENDITURES -BUDGET AND ACTUAL GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 Variance with Actual on a Final Budget - Budgeted Amounts Budgetary Positive Original Final Basis (Negative) EXPENDITURES: Personal Service $ 1,635,094 $ 1,686,763 $ 1,733,011 $ (46,248) Materials and Supplies 50,200 49,538 31,521 18,017 Maintenance and Repairs 4,428 4,428 2,515 1,913 Insurance 116,072 116,072 116,072 - Miscellaneous 59,820 58,385 48,798 9,587 Operations, Services 146,438 156,314 130,943 25,371 Transfers -Interfund 109,830 109,830 109,830 - City Manager's Office 2,121,882 2,181,330 2,172,690 8,640 Personal Service 131,724 136,243 135,313 930 Materials and Supplies 450 450 96 354 Maintenance and Repairs 2,500 2,500 - 2,500 Insurance 1,509 1,509 1,509 - Miscellaneous 500 500 455 45 Operations, Services 18,143 18,143 5,302 12,841 Transfers -Interfund 5,156 5,156 5,156 - Cable Television 159,982 164,501 147,831 16,670 Personal Service 263,028 275,680 287,790 (12,110) Materials and Supplies 3,700 8,400 3,648 4,752 Maintenance and Repairs 400 400 110 290 Insurance 1,890 1,890 1,890 - Operations, Services 76,837 72,137 17,872 54,265 Transfers -Interfund 9,752 9,752 9,752 - InternalAudit 355,607 368,259 321,062 47,197 Personal Service 253,477 262,394 260,507 1,887 Materials and Supplies 11,700 11,700 10,504 1,196 Maintenance and Repairs 200 200 - 200 Insurance 2,867 2,867 2,867 - Operations, Services 120,524 159,374 126,261 33,113 Transfers -Interfund 21,618 21,618 21,618 - Public Communications 410,386 458,153 421,757 36,396 Personal Service 987,713 1,022,408 991,346 31,062 Materials and Supplies 36,000 28,500 20,752 7,748 Maintenance and Repairs 500 8,000 7,641 359 Insurance 8,829 8,829 8,829 - Miscellaneous 26,023 31,023 30,869 154 Operations, Services 124,534 119,534 112,646 6,888 Transfers -Interfund 107,599 107,599 107,599 - Human Resources $ 1,291,198 $ 1,325,893 $ 1,279,682 $ 46,211 (continued) 121 CITY OF DENTON, TEXAS Exhibit XXIX SCHEDULE OF EXPENDITURES -BUDGET AND ACTUAL GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 Variance with Actual on a Final Budget - Budgeted Amounts Budgetary Positive Original Final Basis (Negative) EXPENDITURES: Personal Service $ 907,325 $ 944,239 $ 1,069,492 ~ (125,253) Materials and Supplies 13,042 12,593 10,341 2,252 Maintenance and Repairs 300 300 - 300 Insurance 9,252 9,252 9,252 - Miscellaneous 500 500 - 500 Operations, Services 264,664 264,683 158,938 105,745 Transfers -Interfund 39,647 39,647 39,647 - FixedAssets 21,620 22,050 22,570 (520) Legal Administration 1,256,350 1,293,264 1,310,240 (16,976) Personal Service 342,484 356,410 294,848 61,562 Materials and Supplies 8,630 8,630 1,742 6,888 Insurance 3,024 3,024 3,024 - Miscellaneous - - 18 (18) Operations, Services 8,558 8,558 6,658 1,900 Transfers -Interfund 32,332 32,332 32,332 - Municipal Judge 395,028 408,954 338,622 70,332 Personal Service 1,715,572 1,754,825 1,573,639 181,186 Materials and Supplies 35,200 51,199 49,790 1,409 Insurance 12,639 12,639 12,639 - Miscellaneous 28,659 43,349 35,939 7,410 Operations, Services 355,534 341,034 275,892 65,142 Transfers -Interfund 159,092 169,093 189,312 (20,219) Planning 2,306,696 2,372,139 2,137,211 234,928 Personal Service 1,437,988 1,486,983 1,379,836 107,147 Materials and Supplies 64,200 64,200 47,877 16,323 Maintenance and Repairs 8,000 8,000 3,354 4,646 Insurance 14,588 14,588 14,588 - Operations, Services 113,814 113,814 75,681 38,133 Transfers -Interfund 125,533 125,533 125,533 - BuildingInspections 1,764,123 1,813,118 1,646,869 166,249 Personal Service 858,080 886,634 841,377 45,257 Materials and Supplies 35,586 43,427 41,098 2,329 Insurance 8,679 8,679 8,679 - Operations, Services 136,824 127,129 103,008 24,121 Transfers -Interfund 63,645 64,309 63,645 664 Code Enforcement 1,102,814 1,130,178 1,057,807 72,371 Personal Service 925,823 957,042 921,916 35,126 Materials and Supplies 63,737 63,737 92,087 (28,350) Insurance 10,585 10,585 10,585 - Miscellaneous - - 45,153 (45,153) Operations, Services 100,299 100,299 63,333 36,966 Transfers -Interfund 82,910 82,910 82,910 - Municipal Court $ 1,183,354 $ 1,214,573 $ 1,215,984 $ (1,411) (continued) 122 CITY OF DENTON, TEXAS Exhibit XXIX SCHEDULE OF EXPENDITURES -BUDGET AND ACTUAL GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 Variance with Actual on a Final Budget - Budgeted Amounts Budgetary Positive Original Final Basis (Negative) EXPENDITURES: Personal Service $ 1,969,383 $ 2,042,244 $ 1,969,643 $ 72,601 Materials and Supplies 73,398 73,398 66,379 7,019 Maintenance and Repairs - - 675 (675) Insurance 21,952 21,952 21,972 (20) Miscellaneous 1,320 1,320 1,350 (30) Operations, Services 154,662 154,662 127,943 26,719 Transfers -Interfund 190,968 190,968 190,968 - Finance 2,411,683 2,484,544 2,378,930 105,614 Personal Service 455,951 475,123 473,600 1,523 Materials and Supplies 55,799 55,799 21,054 34,745 Insurance 5,275 5,275 5,275 - Miscellaneous 10,500 10,500 6,370 4,130 Operations, Services 131,055 132,055 90,257 41,798 Transfers -Interfund 26,728 26,728 26,728 - EconomicDevelopment 685,308 705,480 623,284 82,196 Personal Service 6,447,921 6,674,340 6,223,137 451,203 Materials and Supplies 674,259 673,832 623,442 50,390 Maintenance and Repairs 777,249 813,119 792,504 20,615 Insurance 171,763 171,763 171,763 - Miscellaneous 130 130 2,265 (2,135) Operations, Services 2,007,692 2,102,704 1,915,887 186,817 Transfers -Interfund 357,209 357,209 357,209 - FixedAssets - - 34,720 (34,720) Parks & Recreation 10,436,223 10,793,097 10,120,927 672,170 Personal Service 1,167,163 1,211,206 1,035,935 175,271 Materials and Supplies 60,217 66,782 60,575 6,207 Maintenance and Repairs 520,206 500,641 495,012 5,629 Insurance 18,332 18,332 18,332 - Miscellaneous 503 503 (918) 1,421 Operations, Services 1,247,307 1,260,307 1,214,570 45,737 Transfers -Interfund 71,314 71,314 71,314 - Facilities Management 3,085,042 3,129,085 2,894,820 234,265 Personal Service 3,028,236 3,133,950 3,040,267 93,683 Materials and Supplies 168,151 177,241 173,510 3,731 Maintenance and Repairs 104,647 99,110 70,607 28,503 Insurance 54,554 54,554 54,554 - Operations, Services 377,307 322,571 341,117 (18,546) Transfers -Interfund 674,325 692,498 692,498 - Fixed Assets 689,315 688,841 688,871 (30) Library $ 5,096,535 $ 5,168,765 $ 5,061,424 ~ 107,341 (continued) 123 CITY OF DENTON, TEXAS Exhibit XXIX SCHEDULE OF EXPENDITURES -BUDGET AND ACTUAL GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 Variance with Actual on a Final Budget - BudgetedAmounts Budgetary Positive Original Final Basis (Negative) EXPENDITURES: Personal Service $ 135,351 $ 143,249 ~ 136,147 $ 7,102 Materials and Supplies 2,546 2,546 679 1,867 Insurance 632 632 632 - Miscellaneous 500 500 82 418 Operations, Services 189,020 182,020 175,747 6,273 Transfers -Interfund 5,521 12,521 12,521 - Transportation Operations 333,570 341,468 325,808 15,660 Personal Service 962,187 995,147 880,070 115,077 Materials and Supplies 23,576 23,576 19,116 4,460 Maintenance and Repairs 353,329 415,329 411,940 3,389 Insurance 17,936 17,936 17,936 - Miscellaneous 2,270 2,270 1,103 1,167 Operations, Services 160,079 98,079 101,629 (3,550) Transfers -Interfund 67,370 67,370 67,370 - Traffic Operations 1,586,747 1,619,707 1,499,164 120,543 Personal Service 1,729,630 1,787,571 1,730,493 57,078 Materials and Supplies 65,600 70,319 70,781 (462) Maintenance and Repairs 2,057,320 1,988,802 1,889,697 99,105 Insurance 45,309 45,309 45,309 - Miscellaneous 4,550 4,550 3,309 1,241 Operations, Services 395,826 382,432 458,019 (75,587) Transfers -Interfund 58,415 68,415 68,415 - FixedAssets - 67,193 48,733 18,460 Streets 4,356,650 4,414,591 4,314,756 99,835 Materials and Supplies 92,600 92,600 5,725 86,875 Operations, Services 840,432 840,432 693,171 147,261 Street Lighting 933,032 933,032 698,896 234,136 Personal Service 268,359 277,561 241,025 36,536 Materials and Supplies 8,800 8,800 5,887 2,913 Maintenance and Repairs 56,533 37,745 18,252 19,493 Insurance 17,350 17,350 17,350 - Miscellaneous 1,200 1,600 1,720 (120) Operations, Services 144,773 146,373 142,295 4,078 Transfers -Interfund 27,550 27,550 27,550 - FixedAssets - 14,111 14,111 - Airport 524,565 531,090 468,190 62,900 Personal Service 19,270,023 19,808,383 19,410,959 397,424 Materials and Supplies 384,671 384,671 335,822 48,849 Maintenance and Repairs 254,665 254,665 191,754 62,911 Insurance 215,190 215,190 215,190 - Miscellaneous 12,750 12,750 8,927 3,823 Operations, Services 1,255,520 1,255,520 1,238,251 17,269 Transfers -Interfund 1,013,913 1,013,913 1,013,913 - Police $ 22,406,732 $ 22,945,092 ~ 22,414,816 $ 530,276 (continued) 124 CITY OF DENTON, TEXAS Exhibit XXIX SCHEDULE OF EXPENDITURES -BUDGET AND ACTUAL GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2009 Variance with Actual on a Final Budget - BudgetedAmounts Budgetary Positive Original Final Basis (Negative) EXPENDITURES: Personal Service $ 16,594,761 $ 17,043,164 ~ 17,151,276 $ (108,112) Materials and Supplies 388,013 393,313 404,956 (11,643) Maintenance and Repairs 193,396 193,396 173,482 19,914 Insurance 204,124 204,124 204,124 - Miscellaneous 49,050 49,984 40,180 9,804 Operations, Services 1,185,638 1,204,616 1,156,806 47,810 Transfers -Interfund 573,120 573,120 573,120 - Fire 19,188,102 19,661,717 19,703,944 (42,227) Personal Service 110,898 114,917 113,147 1,770 Miscellaneous 145,602 146,302 142,656 3,646 Operations, Services - - 2,871 (2,871) Transfers -Interfund 27,147 27,147 27,147 - AgencyContributions 283,647 288,366 285,821 2,545 Personal Service 2,100,000 137,870 70,483 67,387 Materials and Supplies - - 71 (71) Miscellaneous 645,000 275,990 219,435 56,555 Operations, Services 1,885,003 2,080,216 1,666,476 413,740 Transfers -Interfund 1,020,487 1,085,274 1,038,282 46,992 MiscellaneouslFinance 5,650,490 3,579,350 2,994,747 584,603 Personal Service 63,698,171 63,614,346 61,965,257 1,649,089 Materials and Supplies 2,320,075 2,365,251 2,097,453 267,798 Maintenance and Repairs 4,333,673 4,326,635 4,057,543 269,092 Insurance 962,351 962,351 962,371 (20) Miscellaneous 988,877 640,156 587,711 52,445 Operations, Services 11,440,483 11,643,006 10,401,573 1,241,433 Transfers -Interfund 4,871,181 4,981,806 4,954,369 27,437 Fixed Assets 710,935 792,195 809,005 (16,810) TOTAL GENERAL FUND ~ 89,325,746 ~ 89,325,746 $ 85,835,282 ~ 3,490,464 125 CITY OFri QN . 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We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the City's internal control overfinancial reporting. A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or a combination of control deficiencies, that adversely affect the City's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the City's financial statements that is more than inconsequential will not be prevented or detected by the City's internal control A material weakness is a significant deficiency, or combination of significant deficiencies that results in more than a remote likelihood that a misstatement of the financial statements will not be prevented or detected by the City's internal control. Our consideration of the internal control over financial reporting was for the limited purpose and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting thatwe consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. AM INDEPENDENT WEAVER AND TIDYYELL LLR DALLAS MEMBER DF BAKER TILLY CERTIFIED Pl1BIJCA0C4l1NTANTSAND CONSULTANTS 122P1 MERIT QRIYE, SMITE 1~OQ, DALLAS, Tai 7521 INTERNATIDNAL WWW.WEAVERLLFGQM P:(972~ 49O 190 F:(97~ 70~ 8321 City of Denton, Texas February 8, 2010 Page 2 However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of ourtests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. We noted certain matters that we reported to management of the City, in a separate letter dated February 8, 2010. This report is intended solely for the information and use of the audit committee, management, City Council, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. ~ ~ ~ WEAVER AN D TI DWELL, L.L.P. Dallas, Texas February 8, 2010 2 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 INDEPENDENT AUDITOR'S REPORT The Honorable Mayor and City Council City of Denton, Texas Compliance We have audited the compliance of the City of Denton, Texas (the City), with the types of compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended September 30, 2009. The City's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the City's management. Our responsibility is to express an opinion on the City's compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the City's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City's compliance with those requirements. In our opinion, the City, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended September 30, 2009. Internal Control Over Compliance The management of the City is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the City's internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the City's internal control over compliance. AN INDEPENDENT WEAYERANDTID~YELLLLP DALLAS MEMBER DF BAKER TILLY CERTIFIED Pl1BLJCACC4UNTANTSAND ODNSULTANTS 3 1~~21 MERIT DRIVE, SMITE 104, DALLAS, T~(7~2~1 INTERNATIONAL WI~W.WEAYERLLRCQM P:[91~~ 4~D 19~D F:(9~~ ~0~ S3P1 City of Denton, Texas February 8, 2010 Page 2 A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or a combination of control deficiencies, that adversely affect the entity's ability to administer a federal program such that there is more than a remote likelihood that noncompliance with a type of compliance requirement of a federal program that is more than inconsequential will not be prevented or detected by the entity's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies that results in more than a remote likelihood that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected by the entity's internal control. Our consideration of the internal control over compliance would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. Schedule of Expenditures of Federal Awards We have audited the basic financial statements of the City of Denton as of and for the year ended September 30, 2009 and have issued our report dated February 8, 2010. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB A-133 and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects in relation to the basic financial statements taken as a whole. This report is intended solely for the information and use of the City Council, management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. WEAVER AN D TI DWELL, L.L. P Dallas, Texas February 8, 2010 4 CITY OF DENTON, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2009 I. Summary of the Auditor's Results: Financial Statements a. An unqualified opinion was issued on the financial statements. b. Internal control over financial reporting: • Material weakness(es) identified? Yes X No • Significant deficiency(ies) identified that are not considered a material weakness? Yes X No c. Noncompliance material to financial statements noted Yes X No Major Programs d. Internal control over major programs: • Material weakness(es) identified? Yes X No • Significant deficiency(ies) identified that are not considered a material weakness? Yes X None reported e. An unqualified opinion was issued on compliance for major programs. £ Any audit findings disclosed that were required to be reported under Section 510(a) or OMB Circular A-133. Yes X No g. Identification of major programs: 14.218 Community Development Block Grant h. The dollar threshold used to distinguish between type A and type B programs. $300,000 i. Auditee qualified as a low-risk auditee. X Yes No 5 CITY OF DENTON, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FORTHE YEAR ENDED SEPTEMBER30, 2009 II. Findings Relating to the Financial Statements Which Are Required To Be Reported in Accordance with Generally Accepted Government Auditing Standards. None III. Findings and Questioned Costs for Federal Awards Including Audit Findings as Described i n I.f Above None 6 CITY OF DENTON, TEXAS SCHEDULE OF PRIOR AUDIT FINDINGS FORTHE YEAR ENDED SEPTEMBER30, 2009 IV. Summary of Prioryear Findings. Finding 08-01 (Significant Deficiency) Recommendation: We recommend that the City improve controls over Municipal Court receipts by implementing policies and procedures designed to prevent unauthorized non-cash transactions from being entered into the Municipal Court system. Status: Corrected. 7 CITY OF DENTON, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FORTHE YEAR ENDED SEPTEMBER30, 2009 Federal Grantorl Federal Passed Pass-Through Grantorl Grant CFDA Through to Program Title I.D. Number Number Expenditures Subrecipients FEDERAL AWARDS U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Community Development Block Grant B-03-MC-48-0036 14.218 $ 15,926 $ - Community Development Block Grant B-04-MC-48-0036 14.218 75,336 - Community Development Block Grant B-05-MC-48-0036 14.218 59,062 - Community Development Block Grant B-06-MC-48-0036 14.218 31,121 - Community Development Block Grant B-07-MC-48-0036 14.218 29,579 - Community Development Block Grant B-08-MC-48-0036 14.218 528,634 116,808 Community Development Block Grant B-09-MC-48-0036 14.218 47,718 - Home Investment Partnership M-01-MC-48-0223 14.239 7,192 - Home Investment Partnership M-04-MC-48-0223 14.239 60,387 (5,004) Home Investment Partnership M-05-MC-48-0223 14.239 3,404 (6,996) Home Investment Partnership M-06-MC-48-0223 14.239 215,052 10,000 Home Investment Partnership M-07-MC-48-0223 14.239 222,260 - Home Investment Partnership M-08-MC-48-0223 14.239 375 - Home Investment Partnership M-09-MC-48-0223 14.239 16,231 - Neighborhood Initiative B-04-NI-TX-0038 14.251 18,716 - Economic Development Initiative 2004 B-04-SP-TX-0788 14.251 9,709 - Economic Development Initiative 2005 B-05-SP-TX-0300 14.251 9,920 - Total Direct Funding U.S. Department of Housing and Urban Development 1,350,622 114,808 Passed Through Texas Department of Housing and Community Affairs Emergency Shelter Grants 4208000272 14.231 183,206 179,380 Total U.S. Department of Housing and Urban Development 1,533,828 294,188 FEDERAL ENVIRONMENTAL PROTECTION AGENCY Denton Brownfields Cleanup Transit Park BF - 96693601-0 66.818 2,469 Total Federal Environmental Protection Agency 2,469 - U. S. DEPARTMENT OF HOMELAND SECURITY Passed through State Department of Public Safety Governor's Division of Emergency Management Emergency Management Performance Grant 09TX-EMPG-0122 97.042 80,993 - Fire Prevention Grant EMW-2006-FG-11425 97.044 5,675 - 2007 LETPP State Homeland Security Program 2007-GE-T7-0024 97.074 155,000 - 2007 UASI State Homeland Security Program 2007-GE-T7-0024 97.008 3,355 - Total U.S. Department of Homeland Security 245,023 - U. S. DEPARTMENT OF JUSTICE Byrne Justice Assistance Grant 2008-DJ-BX-0597 16.580 6,746 - COPS 2006 Technology Grant 2006-CK-WK-0140 16.710 10,610 - Total U. S. Department of Justice 17,356 - U. S. DEPARTMENT of AGRICULTURE Passed through Texas Department of Health and Human Services Summer Food Services Grant 061-1002 10.559 118,677 - Total U.S. Department of Agriculture 118,677 - U. S. DEPARTMENT OF TRANSPORTATION Federal Transportation Grant TX-03-0293-00 20.507 143,465 Passed Through State Department of Transportation STEP Comprehensive 2009-DentonPD-S-SYG-0139 20.600 62,280 - Click It OrTicket Mobilization 2009-DentonPD-CIOT-00038 20.600 3,758 Installing of Traffic Signal Equipments 2250-01-021 20.205 151,458 Total U.S. Department of Transportation 360,961 - 8 CITY OF DENTON, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FORTHE YEAR ENDED SEPTEMBER30, 2009 Federal Grantorl Federal Passed Pass-Through Grantorl Grant CFDA Through to Program Title I.D. Number Number Expenditures Subrecipients NATIONAL ENDOWMENT FOR THE HUMANITIES National Endowment for the Humanities Grant PG - 50568-09 45.149 3,928 Total National Endowmentforthe Humanities 3,928 - TOTAL EXPENDITURES OF FEDERAL AWARDS $ 2,282,242 $ 294,188 STATE AWARDS TEXAS STATE LIBRARY AND ARCHIVES COMMISSION Loan Star Library Grant 442-09136 NIA 45,341 - Total library 45,341 - TEXAS DEPARTMENT OF TRANSPORTATION Airport Maintenance Grant M818DNTON NIA 10,192 - Airport Maintenance Grant M918DNTON NIA 49,999 Installing of Traffic Signal Equipments 2250-01-021 NIA 37,865 Total Texas Department of Transportation 98,056 - TEXAS COMMISSION OF ENVIRONMENTAL QUALITY Trinity River Basin Environ. Restoration Initiative Grant 587-2-77062 NIA 1,565 - Total Texas Commission of Environmental Quality 1,565 - OFFICE OF THE GOVERNMENT -CRIMINAL JUSTICE DIVISION Tobacco Compliance Grant SB55 NIA 4,326 Total Office of the Government -Criminal Justice Division 4,326 - NORTH CENTRAL TEXAS COUNCIL OF GOVERNMENT (NCTCOG) Parks Recycling Grant 09-04-G09 NIA 129,250 Construction and Demolition Recycling Grant 08-04-G12 NIA 5,256 Total NCTCOG 134,506 - TOTAL EXPENDITURES OF STATE AWARDS 283,794 - TOTAL FEDERAL AND STATE FINANCIAL ASSISTANCE EXPENDED $ 2,566,036 294,188 9 CITY OF DENTON, TEXAS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FORTHE YEAR ENDED SEPTEMBER30, 2009 1. GENERAL The accompanying schedule of expenditures of federal and state awards presents the activity of all applicable federal and state awards of the City of Denton, Texas (the City). The City's reporting entity is defined in Note 1 to the City's basic financial statements. Federal and state awards received directly from federal and state agencies as well as federal and state awards passed through other government agencies are included in the respective schedule. 2. BASIS OF ACCOUNTING The accompanying schedule of expenditures of federal awards is presented using modified accrual basis of accounting, which is described in Note 1 to the City's basic financial statements. 3. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Grant expenditures reports as of September 30, 2009, which have been submitted to grantor agencies will, in some cases, differ slightly from amounts disclosed herein. The reports prepared for grantor agencies are typically prepared at a later date and often reflect refined estimates of year-end accruals. The reports will agree at termination of the grant as the discrepancies noted are timing differences. 4. SCHEDULE OF FINDINGS AND QUESTIONED COSTS The schedule of findings and questioned costs, including the summary of auditor's results for federal awards, is included beginning on page 5. 10 CITY OF DENTON, TEXAS CORRECTIVE ACTION PLAN FORTHE YEAR ENDED SEPTEMBER30, 2009 Not Applicable 11 CITY OF DENTON, TEXAS MANAGEMENT LETTER YEAR ENDED SEPTEMBER 30, 2009 February 8, 2010 To the City Manager and Director of Finance CITY OF DENTON Denton, Texas Management of the City of Denton, Texas (the City) is responsible for establishing and maintaining the City's internal control structure. In fulfilling this responsibility, estimates and judgments by management are required to assess the expected benefits and related costs of internal control structure policies and procedures. The City's internal control structure consists of policies and procedures established by management to provide reasonable, but not absolute, assurance that the financial data are recorded, processed, summarized, and reported consistent with the assertions embodied in the financial statements. In establishing those policies and procedures, management assesses their expected benefits and related costs. Because of the inherent limitations in any internal control structure, errors or irregularities may nevertheless occur and not be detected. Also, projection of any assessment of the internal control structure to future periods is subject to the risk that policies or procedures may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. In planning and performing our audit of the City's basic financial statements for the year ended September 30. 2009, we considered its internal control structure in order to plan our auditing procedures for the purpose of expressing our opinion on the basic financial statements and not to provide assurance on the internal control structure. Our report on compliance and on internal control over financial reporting is documented in a separate letter dated February 8, 2010. However, certain matters came to our attention that we wish to report to you. These matters, which were considered by us during our audit of the financial statements and do not modify the opinion expressed in our report dated February 8, 2010, are presented in the following paragraphs. Compensated Absences The City reports a liability for the earned, unused sick and vacation leave that accrues under the City's administrative policies. During our audit, we noted the detail list of compensated absences by employee included accruals in excess of the maximum stipulated in the City's employee benefits policy. As a result, an adjustment of approximately $280,000 was required to correct the balance as of September 30, 2009. We tested all payments made to terminated employees for compensated absences in fiscal year 2009 and there were no payments made in excess of the limits prescribed by the administrative policies. We recommend that the City improve controls over the calculation of its liability for compensated absences to ensure that the maximum accrual caps outlined in the City's administrative policies are appropriately applied. This will help ensure the accuracy of the compensated absences liability reported by the City. AM INDEPENDENT WEAVER AND TIDYYELL LLR DALLAS MEMBER DF BAKER TILLY CERTIFIED Pl1BIJCA0C4l1NTANTSAND CONSULTANTS 122P1 MERIT QRIYE, SMITE 1~OQ, DALLAS, Tai 7521 INTERNATIDNAL WWW.WEAVERLLFGQM P:(972~ 49O 190 F:(97~ 70~ 8321 City of Denton, Texas February 8, 2010 Page 2 Management Response: Management agrees with the proposed recommendation. Currently, sick leave and vacation leave balances are recorded and tracked by individual timekeepers in each department on Excel spreadsheets. This data is then used to calculate the compensated absences liability that is included with the financial statements. The JD Edwards system is designed to provide a centralized process for managing payroll functions. As such, staff began a process several months ago to record all vacation and sick leave balances in the JD Edwards financial system, and we expect this process to be complete by the end of the current fiscal year. In our view, this change will improve the accuracy of the compensated absences liability calculation in the future. Management will continue to evaluate whether further utilization of the JD Edwards system is warranted. This report is intended solely for the information and use of the City and its management. This restriction is not intended to limit the distribution of this letter and the accompanying memorandum, which, upon issuance to the City, are a matter of public record. If we may be of assistance in further discussion of the above comments and recommendations, please call upon us. We appreciate the opportunity to be of service to you and the courtesies and cooperation extended to us during our audit. ~ ~ ~ WEAVER AN D TI DWELL, L.L.P. This page left blank intentionally. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Receive a report, hold a discussion, and give staff direction regarding the Preliminary 2010-11 Budget and Five Year Financial Forecast. BACKGROUND The purpose of this Work Session item is to provide the City Council with some preliminary information regarding the FY 2010-11 General Fund Budget and five year forecast. The attached PowerPoint presentation provides a preliminary version of the five year forecast for FY 2010-11. The financial planning process is still in the early stages, and as a result, the forecast should not be considered complete. Over the next several months, staff will work closely with the City Council and the Audit/Finance Committee to finalize our five year financial forecast. The final version of the financial plan will be submitted to the City Council with the City Manager's recommended budget at the end of July 2010. Due to several changes in the economic environment, staff is recommending a number of changes to the long term assumptions that were included in the FY 2009-10 Adopted Five Year Financial Forecast. Key assumption changes for the FY 2010-11 Five Year Forecast include: • Higher than anticipated ending fund balance for FY 2008-09. • Lower the appraised value growth assumption to -1.6% in FY 2010-1 1, 2% in FY 2011- 12, and3%inFY2012-13. • Recognize the revised sales tax projection for FY 2009-10, which is expected to be 5% below FY 2008-09 receipts. • Incorporate FY 2009-10 reductions related to the hiring/reclassification freeze and the suspension of all non-essential travel and training. • Recognize the reductions related to the efficiency team (e-team) recommendations. • Include an additional 1 cent tax increase in FY 2014-15. With the combination of the above factors in the General Fund, staff is now projecting that the fund balance for FY 2009-10 will decline by approximately $3.5 million, which is approximately $0.4 million less than the $3.9 million decline anticipated in the original adopted budget. While the FY 2009-10 long term plan estimated reduced deficits in subsequent years, the preliminary FY 2010-11 long term plan estimates that expenditures will exceed revenues in the General Fund by an average of $4.6 million each year over the five year plan. In doing so, the fund balance Agenda Information Sheet February 16, 2010 Page 2 will decline rapidly each year and is projected to be negative by year five of the plan. To correct this issue, adjustments to expenditures and/or revenues will be necessary. Since approximately 73 % of the expenditures in the General Fund are related to personal services, significant reductions cannot be made without affecting personnel and/or service delivery. Further, due to the magnitude of the difference between projected revenues and expenditures, efficiency improvements and minor adjustments to spending will not be sufficient to correct the structural funding imbalance in the General Fund. As a result, program level funding reductions and/or eliminations will need to be made even with a tax rate increase. To address these issues, staff will be evaluating a number of possibilities over the next several months including: • Funding Source for Keep Denton Beautiful Program • Consider Overtime Reduction Strategies • Eliminate or Delay Public Safety Training Facility • Reduce Compensation Increases • Reduce Mowing Cycles • Consider Privatization of City Services • Recover Full Cost for School Resource Officers • Reduce Funding to Non-City Entities • Explore Increasing Health Insurance Rates/Lowering Benefits • Reconsider Prior Year Service Additions • Re-evaluate Over 65 Exemption Increases • Reduce programs such as: Library or Other Facility Hours, Civic Center Pool Operation, and Other Programs. As recommendations are developed on these and other issues, staff will provide the City Council with more information. Finally, the lower property tax growth assumptions have also had a significant impact on the General Obligation Debt Service Fund. Specifically, the lower projected property tax revenues may cause a delay in the scheduled sale of debt related to the Public Safety Training Facility. The projected $500,000 a year in operational costs for the facility will also need to be evaluated within the context of the General Fund's financial position. In addition, the lower projected revenues may cause the planned bond election for 2012 to be delayed until 2013 or later. I want to again emphasize that the information discussed above is preliminary. Staff will be working over the next several months to finalize our projections, and as we obtain more data, we will keep the Council fully informed. Agenda Information Sheet February 16, 2010 Page 3 I look forward to discussing this information in detail with you. If you have any questions, or need additional information, please let me know. EXHIBITS 1. 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AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 Questions concerning this DEPARTMENT: Plannin & Develo meat process may be directed to g p Brian Lockley at 349-8378 ACM: Fred Greene SUBJECT Receive a report, hold a discussion, and give staff direction regarding a proposed amendment to the Denton Development Code, Section 35.14.3(B), regarding parking in the Central Business District. BACKGROUND According to 3 5.14.3 (B) of the Denton Development Code (DDC), "development of property within the Central Business District is exempt from the requirement to provide any additional parking spaces." This provision, exempting the provision of any additional parking within the Central Business District (CBD) has contributed to a lack of adequate off street parking within the CBD. This negative impact is most notable when new developments such as multi-family and student housing are constructed within the CBD Planning staff has been working with Jacobs Engineering, Inc. with the development of the Downtown Implementation Plan (DTIP). The DTIP will include a downtown parking component that will detail the overall parking supply and demand for on-street and off street parking and identify specific locations for additional parking, shared parking and new parking facilities. This element will research parking needs by land-use, peak usage by land-use, and availability of parking within the project area and within certain walking distances to the project area. It will also make recommendations for adequate parking ratios for Downtown development based on land-uses. While the DTIP's downtown component will address future parking needs within the project area, it will not be completed in time to prevent or mitigate the negative impacts that are a direct result of the off street exception provision under 3 5.14.3 (B) of the DDC. To prevent new developments from being constructed without providing adequate off street parking before completion of the DTIP's downtown parking component, staff recommends that Section 35.14.3(B) of the DDC be repealed. New developments within the CBD will therefore be required to provide adequate off street parking at the ratios required by Subchapter 14 of the DDC. Any development that is unable to meet the parking requirements on-site may apply to the Board of Adjustment for a variance from the parking requirements; enter into a shared parking arrangement with an adj acent business; or provide remote parking on another lot. This Development Code amendment was presented to the Planning & Zoning Commission at their meeting on February 10, and while they agreed with the need for the Development Code amendment, Commissioners were of the opinion that the amendment should not cover the entire Agenda Information Sheet February 16, 2010 Page 2 CBD, but instead be limited to new developments within a block of the Downtown Square (Exhibit 3). Commissioners were also concerned with parking standards being required of all developments that require a Certificate of Occupancy. Applicability of Code Amendment Staff has reviewed how this amendment will be applied without discouraging development in the Downtown. Originally, it was determined that this amendment would apply whenever there is a change inland-use that requires a Certificate of Occupancy, as well as for all new construction in the CBD. However, this may place an unintended burden on existing businesses. For example, if an insurance business relocated and a new insurance business moved into the same location a new Certificate of Occupancy would be necessary. Consequently, the parking standards would apply to the new business that is equally as intense as the previous business without generating any more parking requirement than what was previously demanded. The intent of this amendment is to address the intensity of uses that may locate Downtown without parking. For example, if an office use vacated a location within the CBD and a restaurant moved into the same location, the restaurant could be more intense and have a greater demand for parking, thus worsen an existing off street parking problem. Conversely, if a restaurant use vacated a location in the CBD and an office use moved into the same location, the office use could be less intense, therefore not needing as much off street parking. Therefore, changes in land-use where a more intense use is proposed would be required to provide parking, whereas changes in land-use where the same or similar parking demand is proposed would not be affected. Accordingly, staff proposes that this amendment apply in the following situations: • For any use where new construction is proposed • For any use where redevelopment of an existing site is proposed • For any use where expansion of the existing structure is proposed • For any change in use where the new use is more intense than the use it is directly replacing PRIOR ACTION/REVIEW November 12, 2009 Downtown Task Force February 1, 2010 City Council Work Session February 10, 2010 Planning & Zoning Commission Agenda Information Sheet February 16, 2010 Page 3 OPTIONS 1. Direct staff to move forward with this Development Code amendment. 2. Direct staff to take another direction. EXHIBITS 1. Map of Central Business District 2. Map of Downtown Implementation Plan Study Boundary 3. Map of Planning & Zoning Commission Recommended Code Amendment Boundary 4. Draft Ordinance Prepared and Respectfully submitted by: G~ Brian Lockley, AICP Development Review Administrator Appendix A City of Denton Site Design Criteria Manual Appendix B Denton Central Business District Map 1 RS 1L E i ' r. _ I f, it 1, i E -J JL !C I . I l! Denton Central. f i. Business District - EE s `f j E ~ ( I~'"-'T ~ E ~eL I cc cc f J,. _Uj n- - I!~ is I l: - - r Ll E: f I ~ ° Ivc E C :l w x-PWRfP 1-0 F ARK CcIE-mss' r---ac i i 1 r: t i`8Rt3vafF „ City of Denton P_. and DevolopmaM Daparbrant Denton Tozas 76261 v ~s= (940) 34.0435D N Approved April 1998 50 ~I1 p - W~~:.J: of miN Zol . I , [ t:: I I I - - - : . ~ . . ~ . 1:.. - '~y'~. :MVHSOb'a8 I •d , o . _ I MaHSG"a . = ti a ~:1 ,~R :m I F >l _ Z i : , ~ . : : ~ . ~ ~ 1, : , ~ : D . ~ " - ~ - ~ - ~ L - . : ' ' ' ' ' : ' * ' ' ' ' - * ' ' , - ~ . . . . I . . ~ ~ . . ; - I . - . -~I 6 ~t < I i d L Chi a~ a y. p, 2 i,n .r.. 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'rte 'F ? 93 1 u ~/Wo,~f~~p~s . mf. a "fit. ft <!u r r _ i t ! - } it s•' ~ n 4 w . a 1 F Li JJ ry' J = 4 i ' ----1 ~ .c I a ya y'~~~Y £ f s z -n rti , ~c t l~~ k BA. a•rl I~ _ 7117 ~ r - ,C~ ~`x a• - lv~ Z Y ~ LAI 13, If 4 a ~ ~ ~ ~ i-~ rm_ •~3 t a7 m ~ ..y r~~ ~ I % ~~s - - u is S e: t,._.-: K - - 5: t t r r r - VA ' p ;t _ Y ~ ' L x...9 is ~,5. ` r¢- •c~' t: ~l-<' ~ru r~i, --j i{ S^ r ~ ~ .i t 2 L R~. { s 5 s fit,' - e7t' 71 - I & r ~ - t ~ L 777 ili X~ ~ r~s s r:: r $i'F' ~i v },T. {X > .1 i ! i ~}ty= t14L r? it t - Exhibit 3 s:\pianning\p&z reiateftear 2010\02 - feb\2.10.10\dca10-0001 parking in cbd\dca10-0001 repeal downtown parking exemption ordinance.docx ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AMENDING THE DENTON DEVELOPMENT CODE BY DELETING SUBSECTION 35.14.3.B., TO REMOVE THE CURRENT EXEMPTION OF REQUIRED PARKING STANDARDS FOR DEVELOPMENT IN THE CENTRAL BUSINESS DISTRICT; PROVIDING FOR SEVERABILITY; PROVIDING FOR A PENALTY IN THE MAXIMUM AMOUNT OF $200.00 FOR VIOLATIONS THEREOF, AND PROVIDING AN EFFECTIVE DATE. WHEREAS, Subsection 35.14.3.B. currently exempts development in the Central Business District from any requirement to provide additional parking spaces; and WHEREAS, many individuals in the community have expressed the perception that parking in the Central Business District is inadequate to,current development, and that this condition could be worsened by exempting future development from providing additional i parking, while others have suggested that a scarcity p of "Oaking ri`the Central Business District serves to promote the goals of the Denton Plan by encouraging walkable communities; and WHEREAS, the City of Denton has commissioned a Downtown Implementation Plan study to seek public input and direction informulatinga small area plan specific to the Central Business District, which, among other goals; secks-to comprehensively address and balance these very issues; and WHEREAS, pending the 'Completion andl.review of the Downtown Implementation Plan study and the implementation Of area-specific--.,plans, standards and development regulations expected to result from it, the ~emstence of-the current parking exemption could impede the comprehensive resolution-of theseimportant policy issues, while in the meantime, solidifying the expectations and entitl'etilents of~'property~owners commencing development in the interim; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: .f SECTION 1. Subsection B of Section 35.14.3 of the Denton Development Code is hereby repealed in its entirety. All other provisions shall remain as written. SECTION 2. If any provisions of any section of this ordinance shall be held to be void or unconstitutional, such holding shall in no way affect the validity or the remaining provisions or sections of this ordinance, which shall remain in full force and effect. SECTION 3. Any person violating any provision of this ordinance shall, upon conviction, be fined a sum not exceeding $2,000.00. Each day that a provision of this ordinance is violated shall constitute a separate and distinct offense. SECTION 4. This ordinance shall become effective immediately upon passage and approval. PASSED AND APPROVED this the day of , 2010. MARIA A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: ,a APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY Y BY: 2 AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Parks and Recreation ACM: Fred Greene SUBJECT Consider approval of an ordinance amending Section 22-38 of Chapter 22 Parks and Recreation of the Code of Ordinances of the City of Denton, Texas, relating to facility and program fees by adopting a schedule of fees; repealing all fees in conflict with such schedule, repealing Ordinance No. 2009-224 and all ordinances in conflict with the new schedule of fees; and providing an effective date. The Parks, Recreation and Beautification Board recommend approval with a vote of 4-0. BACKGROUND This ordinance makes changes to the schedule of fees for parks and recreation services that are included in the proposed FY 2009-10 budget. Specifically, fees are adjusted as follows: • Revise Water Park Admission prices from Ages 12+ - $10/$12, Ages 6-11 - $8/$10, Ages 2-5 - $5/$7, Under 2 - Free to a pricing structure based on height. Proposed Admission prices for individuals Under 48" - $7/$9 and Over 48" - $11/$13, Under 2 - Free. OPTIONS Council options include the approval or denial of the ordinance as submitted. Council may also opt to modify the Schedule of Fees to include additional or modified requirements. RECOMMENDATION Staff recommends approval of this ordinance and agreement. ESTIMATED SCHEDULE OF PROJECT If approved, the changes to fees will be effective March 1, 2010. PRIOR ACTION/REVIEW These increases have been previously reviewed at the Aquatics Focus Group Meeting on January 14, 2010. The Parks, Recreation and Beautification Board recommend approval with a vote of 4-0. FISCAL INFORMATION The changes will result in an additional $18,000 in General Fund revenue. EXHIBITS 1. Ordinance 2. Exhibit A - Parks and Recreation Fees 3. Aquatics Focus Group Meeting Minutes 4. February 1, 2010 Park, Recreation and Beautification Board Meeting Minutes Respectfully submitted: tA- 0.'~-4 Emerson Vorel, Director Parks and Recreation Prepared by: Amanda Green, Superintendent Parks and Recreation llcodadldepartmentsllegallo~r dacamen#slordinances1101201~ parks facility and program fees.dac ORDINANCE NO F AN ORDINANCE AMENDING SECTION 22-~ 8 OF CHAPTER 22 PARKS AND RECREATION OF THE CODE OF ORDrNANCES OF THE CITY OF DENTON, TEAS, RELATING TO FACILITY AND FR.OCxRA FEES $ ADOPTINCr A SCHEDULE OF FEES; REPEALING ALL FEES ~N CONFLICT KITH SUCH SCHEDULE; REPEALING ORDnVANCE NO. 20a9-224 AND ALL ORDINANCES IN CONFLICT KITH THE NEB SCHEDULE OF FEES; AND PROVIDING AN EFFECTIVE DATE, THE COUNCIL OF THE CITE DENTON HEREBY OIAINS: SECTION 1. The "Schedule of ~`ees" for FY 2a~9-~ 1 a, set forth in Exhibit "A'}, attached hereto and made a part hereof for a1i p~.t~poses, is hereby approved, and supersedes a1~ prior confllctin~ fee sched~le~. SECTION 2. The provlSlDn ~f thls O~dlrlance are severable, and the invalidity of any phrase or past of this erdinance Khali nit affect the validity ar effectiveness of the remainder of this or ~nance. SECTION This ordinance sha11 become effective immediately upon its passage and approval, PASSED AND APPROVED this the day of , 1 l1~ARK A.. BURROUGHS, :MAYOR ATTEST: JENNIFER SALTERS, CITY SECRETARY B~: APPROVED A TO LEGAL FORIVI: ANITA BURGESS, CITY ATTORNEY BY: ~xhi~it A PARK ADD R~~ATI~N ~E ~ene~ra~ Fund ~n~~ Effective a~chl, ~~la ,P ' r~~siden~lno~t-r~es~a~~~~ Faciiit~ Rental r ~y 7j' A ~~~~............a•~••••••••~••. rr•.•••••••+~~•+•• V~•V~J J~r~~ ~iJ~r 11R,J~ ~ 7 ~a a a a ~ a a a . • • • ~ • . • • • • • • ~ . , • • • , r r a . a a a a a a ~ • • • • • • . • • ✓ ~ r V~~~~r~4/ Recreation center srnal~ rneet~ng rooms. • a • • , . r . ao~l 3.00 per hour} Meeting Room, Arno~.s A, Ammons B, Denia Room A, Xenia Room C, forth Lakes Room American Legion I~~~, American Legion H.1 Annex, senior Centex Conference Room, eniar Center Craft Room Recreation center urge meeting rooms a a a . , , , 3 0.0013 5.00 per hour} senior Center rooms 143, ~ 44, ~ 45, Devi Room North Lakes Room B KitchenlM~ Craft Rooml MLA C~a~ne Room . • r ,20,00125.00 per hour} civic tenter Pang ! ~ OUr Rental ender 1~0 Lle~~s} ..a...•1•••!••~f•,rr1...... 1 VV•~V! ~V V•~l+ hou~.•a.~aa~a•~••••a•~••,•,r•~., r. •••••~a••~a••a••••.~~rr,• 1~.~~/+ 1l/Lfa~~V ~Iour Rental {101 L.roo gU~sts} .ta••••~••~•••~r 270.01290.00 ~xtrahour~ ....................JJJ...aaa•~•I/F•.•F~•,r•,+,~r,..r......,,~~••~r 1~~•VVF ~~rL+~ our LLr if~~ ~Lf~ {..,~~~~••r•.r,~r. r, ........i a..a~a•~••a r••~~..~r ~~~r~~l~V.~~/ ~~tr~\\\~~~••~•1••~Vi•.•.~•„~!!!r„r....a...a~a•~••a•~.•••~•. r•.~r•1 ~#/~ali ~l ~~•~1.+ ~I,J 4~0 gLlests~••a•a•a••••.r•.r.rr,..,....,..•a••a•••.•• ~ 1 our...a.a.aa••~•~•a.•~••~••••r•.•.rrr,•,~•..••••••••a•a•••~••~•• YVxC tenter: ~ ~ Rotunda: So.OO per hour ~weekda~s} 100. per hour evenings and weekends} axln~urrl da~~~ rate: ~SOO -F; - • Meeting Room 1: 25 per hour ~weel~days} 3 per hour evenings and weekends Ma~in~un~. daii~ rate: 125 weekdays ~ 1 ~ evenings $350 weekend • Meeting Roorrl 2 3 5 per hour ~weel~da~s~ X45 per hour evenings and weekends} Maximum ~ail~ rate: $17~ weekdays $225 evenings $45 ~ weekends I ~YP~ F~ ~~esrde~~lno~-~e~ident~ - • o ams 1 2 $ 5 a par hour {weekdays} ~5 par hour {evenings and weekends} a~imun~ daily rate: weekdays 3~5 evenings X50 weekends • onnunity doom 5~ per hour {weekdays} ~5 per hour {evenings and weekends} Maxi.urn daily rate: $Z50 weekdays 3~5 evenings $ 6 5 0 weekends • dooms 2 X95 per hour {weekdays} omrnunity ~oorrr 1 per hour evenings and weekends} ll~a~imum daily rate: $475 weekdays $~~5 evenings $1,50 weekends • Playa per hour Playa with restrooms ~5~hr., and rental of a meeting room for restraon~ access • Kitchen 1 per hour with meeting room rental $~D per hour for kitchen only rental • Entire Fac~~~ty 170 per hour weekdays} 2~0 per hour evenings and weekends} 1Vlaximun~ daily rate ; 1, 3 G 0 weekdays $1,70 evenings and weekends} ~ Discounts may be given fronrz regular civic tenter rental fees for multiple {consecutive} day rentals and city events available to the general public. e.iar tenter multipurpose room . . . ~ ~O.D01~5~00 per quadrant . • • . • • • X0.001100.00 entire room ~thlet~c fields: ~ Athletic field {f a 1~11~~} a ~ • • . 1 ■ , t . ► ~ ~ ~ as ~ ~.thletic field {wllight} • . ~ • . , • • • Llr 5 . V a Tennis: • Taurnament rental {S hour rental} ......................30,00 {per court} ~ Add~tlanal taurnanaent hour • • • S.~a {per court} Page 2 of 5 I ~YP~' ~~s~de~t~l~a~-r~sient~ Natatorium: Rentals ~ Maur Rental sunder 1a0 guests~ ..•.rr.........~a••.•••...,2~~,Oal~a.aa ~,~1,(1t~{.L llour.a.•••a••••~•••••~•••••••a••••••~r•r•......•.+..••~••~••••••••r••~~V•~~! ~ ~~+~a ~ Dour Rental ~Ial 2~D guests} ...r••rir.rrr.......,.••••~••~~~V•aa+ ~a*~a 1J~tr~ haur ••••••~••••~•••r•~•~•rr•r~•~r•r••••••••••+.~•+~•••~••••••r•••~r••~~.aa! ~~a- +~a ~A~ur ue~t~~.....,.••~•~•••••••••••r•r••r••••.........~~~•aa! IV4J•~a . ' 1 ~ 1 If ~J ~~~r~~a4~J. ~~r•rr+~rr~••.r ......................••~••~••~•••~••~••~r. «.....~~a.aa ~l a•1fa ~OUr 1~~~ ~~V gue~ts~••••~•.••~•~•••••~••r•*rr.•.....,...••~••~~~~•aaf ~~~*4/a Extra Hp\\ •~••~•••••••J„•~••r•*//////•••••r+.r*••r•••••••..•.••••••••••~••••rr•~~ ! i~a1 ~~~/.~a V~ater works irk; Rentals Park rental ~2 hour rental. ~,Oaa guests $ ~,a~.00 Additianl Maur $ X0,00 Outside aterxng fee $ 1 a~. as North Pavilion Area $ 1 0, Oa l~arth Pa~r111an Only $ 7~.aa ~C~Yll1S~1Q~S Discounts nay be given ~rarr~ regular ad.is~ion fees to the Natatorium., water park, or svvirri~nin pool based on promotional coupon available to the general public, advance ticket ales, discounts through eaan passes, evening discount, and through group rates hers the groups ten adn11~~10nS• Da11~ ~v~m.n~~n Pool AC~11a~: Inds 1~ ~~u~~ ~1~~• • • ~ r • ~ • a r • • s 1 r r • r r . • ~ ~ • • • • • •~a~~l • Individual Adult......,....,a••••••.~•••••••••••ir........aa~~.aa civic Oenter Pool eaan Adna.~ss~on: ~ Indi~ridualpass.••,.r••,..rrrr,.•..........~....••..••.5~.a~~~O,Qa 1(L111~~1 ~~~~.a•..•.~~.•.a•a~a•••••~~•••~~~•i~r•r1.....~1~~V#1~~~~•aV a Tennis: 7 ~~u~ Laul L 4€~e ~~L ~u~~+~.,~tV a • • • • • • • • • • • • • • ~ * V V L ~ 4 ~5h~1~~ FJatL~ h~~ a~~ r • Indlvldual court ue fee ~l~hted} ~ ~ • • • • • • • • • • r ~ ~ ~ • • ~ • 1J ~ ~ L ~ ~~nG ~a~t~\.L V~~ + Indlvldual season . . • • • • ~~.~~~~~.a~ 1 V~~a~ V r • • r r r . ~ r • • l r r r r • . r . . a a • a ~ ~ Lf a V 1JI ~ ~ ~ • a V Page 3 of 5 Natato~-i~m: Daily Adrrzission: hildrenb-11...•r•~•+a••~~~••••••rrr•r•••.+••,•••r,•~ ~+~y~V1r~•V~ ~ LLii~~r , + + a + + ~ ~ ~ • • • + • ~ • • 1 r ~ ~ r r 1 .V lli ~ a~~ Pa.~es; rrhh{{+ f++!!I'f~ rr~~yyyyJ Individual ~ rn~Ilthp~~rr...•..•••••••••••••••••••A.►J~fl.r~•V~ FarYl~l 1' ~ r~V~tll + + a a + • ~ a • • • ~ ~ ~ • • ~ • r r + 1 r~ VAr~ V 1~ 111 ~ a • • a ~ ~ • • ~ • • • • • • • • r + • 1 ~ ~ 4.J Fat~~l Y y~~iL~i~~~1]111• • • • ~ ~ • • ~ • r r • . ~ . . , . • • • ~G.~~•~4Ji ~ ~~•~4J Ind~vldual annual ~~~......,+a~~a••~••••••••••••~~V.~~! Fanllly ~.r~~ ••a•••••••••~r~......•••~~•••~~~V•~~J~~~~k/4,/ Ater ~~rk: I)a~ly Adn~ls~lon: fiver 4$" $11.~011~•~~ children under ~ Free Passes: Individual 1 month. pays.. • • ~ . , . ~ r 2.0~1~.00 Individual pass • ~ • • , •.75.4D19~.~0 Fan~llypass ••••~•++••••••••.•..~aaa••~~r~~~•4~~~I~r~V Special event A~~llca.tion _Fee ~Q~-refundable 1~~plicatlon Fee. • . , ~ + • • • ~ ~ • . r • • r , r . ~•~~1 event appllcatlon ~U~rh Sorts You ~ ~..r V Ir~~~~~ F~~ • . ~ • • ~ ~ ~ r • ~ • r • • • • • • • • ~ r 1 ~ r if ~ ~~r ~1~~~W Select Youth Sports Impact Fee• r25.4~ pex parti~ipantlper e~~Qn Park Vet~do~ Sales one-day booth permit: ~ \1J~ LJ~R.l ilt ~n1.4V . , . ~ ~ a + • + • • • • • • r r • • • • • • • • ~ ~ r~~ F~r pr~flt'~ ~~~••••••••••~~••••~r•••+••..r•.r.~r•~•r•••~~•• ~~•V4f For profzt defined as any vendor selling items or cailecting infonuation far future gales ~arl~ Shelter Reservatioa.s Four- our reexvat~an: • Srriall shelter ~eapacity: ~5 persons} ~ barge shelter cap' achy: 5~ pexsons} Page 4 of i ~'Y~~ ~~esie~~lnon~~eside~z~~ ~ Collins Stake in Fred Moore Park • stage rents , a • a • • . a ~ , 15. col hour Re~ioo.ai ~'rk Rental Four- our reseat~on: • North Lakes Park a.•••••~i~a~.•••.•••••••.•••.•• ~VVaVV V t~~{~l~lt,/Il~l LA,1 . ~ ~ ~ • • • • • • r a • ~ ~ ~ • . r . . . Parr • • • ~ • ~ • . ~ • • • ~ . • ~ ~ a a a • • • • • • ✓'V uakerty~n Pa~~ Rental • 'arty Side ~~i~ic tenter Pool Including Amphitheater} • • $1 H7. flour ~ ~X1rr1uI~3~11~ ~.~~~•..........+.•~aaa•~.•.••••.••...~~VLJ~~V ~ South Side ~'ity fall ~ncludin harden walk} . . . $1 S7 ~ 5 ~Ihour ~ 1I1'1l~Ill~~l~~~~~~~.i..a...a~•a~~•a••r..•.•.•.•.~~1~~~VVrV1+ Facility ~dentication hard "Rec Puss~~ ~~y f~ r 11~C~1Vl~llc~ 4+'~ . . • . ~ ~ • • • • • • • • • . • 1 r • ....4J ~1 ~ Page 0~5 Aquatics Focus Group January 14, 2010 at Natatorium Classroom Members present: Renae Seely, Nita Acton, Karl Choice, Harriet Aronson, Dan Proctor. Staff present: Cathy Avery, Aquatics Program Area Manager. Cathy Avery calledthe meetingtoorder at 7:10pm ACTION ITEMS-None DISCUSSION ITEMS 1. Proposed changes for Water Park: ~ Change admission fee schedule from age-based to height-based Original fees were: Ages 12+ $10 Ages 6-11 $8 Ages 2-5 $5 Under2 Free Add additional $2 fee per person for nonresidents Proposed new admission fees, effective with 2010 summer: Based on 48" rule: 48"and over $11 Under 48" $ 7 Under2 Free • Individual Pass Fee will not increase • Family Pass Fee will only increase after the first 6 family members. Starting with the 7t"immediate family member the feewill increasefrom$10 per person to $25 per person. We are the onlywater park in the area that offers a family pass REASONS FOR CHANGING TO THE 48 INCH RULE: ➢ Value based-if you are48 inchestall you can ride all slides-patrons must be48 inchestall to ride threeof thefourslideson theslidetower. They must be42 inchestallto ride the orange slide. ➢ Easierto enforce height rules atentrance toslide-wrist banded by height ➢ Less confusing...onlytwo fees instead of three, and is consistent with other parks ➢ Need to increase revenues to offset increases in operating costs over the past several years due to increases in minimum wage, cost for utilitiesand supplies, etc. and alsoneed revenue to reduce deficit in Natatorium ➢ Average age for 50% of boys and girls to reach 48" is 7 years old ➢ Proposed feesarestill lowerthan what ischarged forsimilar parks in area Recommendation for shifting to 48 inch rule to determine Water Park admission fees and recommendation to modify admission and pass fee structure. All five members thought that shifting to implement the 48 inch rule and the proposed changes for the admission and pass fee structure were reasonable. • WP proposed changes in hours of operation -close M, Tue, Th, Fri. at 8pm instead of 9pm Recommendation for changes in WP hours of operation. Two of the five members agreed that closing at 8pm on Monday, Tuesday, Thursday, and Friday nights was reasonable. Three of the five members present would like forthe parkto remain open until9pm on Friday nights since most patronsdid not have to go to work or school the next morning. • WP improvements discussed: ➢ New slide for summer 2010 will replace yellow speed slide-it's blue with white translucent ➢ Colorado Bull Rock used to replace barkthroughoutthe park due to maintenance issues with bark and to improve aestheticsof parkand natatorium landscape. When it rains the barkwas washing down into the vaults wherethe motors were located and damagingthe impellers. Replacing the bark with rock will eliminate this costly maintenance repair. Also, the barkwill not have to be replaced each year since it has been replaced with the rock. ➢ Pump repairs on river will cost an estimated $23,500. Will repairone and replace two pumps. ➢ Repairsto birthdaypartyshadestructure in WP on island by river will be made bysummer ➢ Changes in concessions menu are being considered, such as adding chicken nuggets and expanding meal deals ➢ Orange slide repaired in children's pool and partsof playstructure and water cannons repainted 2. Possible changes for Natatorium hours of operation and fee structure • Closing on Sundays due to low attendance - at least 6 months during year in the off season when the water park is closed. Nat would remain open on Sundays when WP is open • Closing 6pm instead of 8pm on Friday nights -would close at 8pm when WP is open • Any concerns about admission fee structure for Natatorium? Recommendation for changes in Natatorium hours of operation. All five members would like for staff to reconsider not fully closingon Sundayafternoons. They would like forstaff to reconsider opening for reduced hours, such as 1-5pm instead of 12-6pm in ordertoallow pass holderstimetoworkout, host birthday parties, provide time for general admission swim, and rent lane space out to the Dallas Water Polo Club on Sundays to generate additional revenue. All five agreed with closing the Natatorium on Friday nights at 6pm from September through December due to low attendance, but wanted staff to reconsider closing later in January and February since Friday night football would be concluded. All five members felt thatthe current Natatorium fee structurewasadequate, butthe commentwas made byDan Proctor that we are cheaper than other facilities and should consider an increase in Natatorium admission and pass fees. Cathy Avery stated that staff are reviewing how Denton Natatorium fees compare to other natatoriums in the area and mayor maynot recommend an increase or adjustment in feesfor FY2010-11. 3. Improvements for Natatorium discussed • Hope to install automated front doors to improve accessibility in spring, 2010 • New TV monitor (Potomac will soon be updated with current info and changed periodically • Working on overhead light repairs in pool areas 4. Discussion of siblingfee discountforclasses-should a second orthird sibling be given a discount? Recommendation forsibling discount. Four of the five members did not feel this was necessary, but one member did share that it was done for her daughter who took private dance lessons. Staff did share that it could create some accounting issues and would require proof such as a birth certificate to verify. 5. Discussion of the Natatorium Residencyfee currentlydetermined by location of residence within city limits or proof of tax assessment by DISD. If a family does not live within the city limits, but their child attends a DISD public school and the family pays DISD taxes should they be given the resident rate instead of beingcharged the extra nonresident fee? Theycurrently are being charged the resident rate, based on the definition of Natatorium Residency listed in the Aquatics Center Annual Report, which defines Natatorium Residency as "Current City of Denton resident or proof of tax assessment by the Denton Independent School District." Staff explained that this was being done because the Natatorium is considered to be a school campus by DISD. DISD sold bondsto pay for over $5 million dollarsto build most of the facilityand the COD provided fundsto add the leisure pool. They also pay half of the deficit at the end of each fiscal year for the combined budgets of the natatorium and water park. Staff did explain that by doingthis atthe natatorium some patronswere nowdemandingthe discount at the other recreation centers which were not funded by DISD and it was causing customer service issues. Recommendation for Natatorium Residency. All five members felt this policy should be continued since DISD funded most of the construction costs for the natatorium and also pay half of the deficit each year. If patrons ask for the discount at other facilities they need to be reminded that the other facilities were funded byCOD and not DISD. 6. Cathy Averyannounced that limited scholarships were available but mustshow proof of financial need. 7. Concerns about lack of hot water in locker rooms in the winter were discussed. Staff did have CBS Plumbing come out to review the problem. Unfortunately there is nothing staff can do to resolve this problem duetothewaythe buildingwasconstructed. 8. A comment card was received by a patron asking staff to improve communications with patrons when staff are trying to solve maintenance problems that can or cannot be resolved (i.e.-part has been ordered tofixthis, etc., or it cannot be done because.....). Cathy will follow up on thiswith the Facility Maintenance Manager. 9. Concerns about cleanliness of locker rooms or restrooms were discussed. Members felt that when guardswere notonthe stand theyshould do moreto maintain thecleanlinessof the locker roomsand restrooms when a janitor was not on duty. Cathy stated she would forward this information on to the Center Managerwho is in charge of lifeguards. She also stated thatthere is a check listforguardswho are not on stand (down guards) that requires them to do periodic walk-throughs of the locker rooms and to clean as needed. 10. A comment card had been received about water aerobics instructors. Concerns have been voiced about not having qualified and well trained instructors for all classes, with the exception of the classes taught by Claralynn Barnes. Cathy shared that a requisition had been opened to try to find better qualified instructors. The applicants who responded did not have a background in teaching water aerobics. The position was then frozen as part of the hiring freeze and staff hope to reopen the position to hire qualified instructors in the near future. 11. Availabilityof lap laneswas discussed and is Wotan issue atthistime. Earlier in thefalltherewere concerns about lackof lane spacefor patrons butthese issues have been resolved. 12. Cathy asked for any other feedback about programs at the Natatorium or WP. The only suggestion was to explore ways to reach the obese adults to encourage them to take part in the Natatorium programs offered that could help them to lose weight. Cathy stated that she was hoping to encourage patrons at Weight Watchers or Curves to take part in the natatorium programs such as water aerobics, water walking, and lap swim. Cathy mentioned that she has also had discussions with the Aquatics Center Manager to look at developing programs to target obese children. Cathy also listed her contact information on the agenda forthe meeting. That information is listed below. The meeting ended at 9:15pm. Feel free to eithere-mail orcall CathyAveryto provideadditionalfeedback. E-mail: cathy.avery~cityofdenton.com Phone: 940-349-8808 DRAFT Parks, Recreation and Beautification Board Minute s February 1, 2010 Civic Center Community Room Members present: Carol Brantley, Allyson Coe, Janet Shelton, Jennifer Wages Members absent: Vicki Byrd, Derrick Murray, Mike Simmons Staff present: Emerson Vorel, Bob Tickner, Mary Aukerman, Amanda Green, Jim Mays Allyson Coe, chairperson, called the meeting to order at 6:00 p.m. APPROVAL OF MINUTES OF January 11, 2010 MEETING: Coe asked the Board if there were any changes to last month's meeting minutes. Hearing none, Jennifer Wages made a motion that the minutes be approved as written, Carol Brantley seconded the motion and the minutes were approved with a vote of 4-0. ACTION ITEMS: a) Revision to Parks Facility and Program Fees Ordinance to Modify Water Works Park Fees - Amanda Green, Superintendent of Leisure Services, explained that the fees were based on age, but comparable parks have fees based on height because many amenities have a minimum height of 48". The revision to the ordinance will base fees on height divisions, instead of age classification. The new fees will be: Over 48" is $11 for resident and $13 for non-resident, Under 48" is $7 for resident and $9 for non-resident. Children under 2 years of age will remain free. Several Board members had concerns with the new pricing but Green stated that there are monthly passes that can be purchased, along with other discount coupons, and our pricing is comparable to facilities with similar amenities. Green also said that the new double-loop slide we are purchasing to replace the broken yellow slide should be up and usable before the new season. MOTION: There being no further discussion, Brantley made a motion to recommend the revision to the Parks Facility and Program Fees Ordinance to modify the Water Works Parks Fees to be based on height rather than age, Shelton seconded the motion and the revision passed with a vote of 4-0. DISCUSSION ITEMS: a) Park Naming Request Update -The committee met the last week of January and gave a preliminary report to the Board. Committee chairman Simmons was not available so Shelton and Brantley gave a brief report on their findings. They stated that they had done research on Mr. Dallas and it appeared his real passion was police work, rather than baseball, so the question was raised whether the Denton Police Department would be a more appropriate place to have Mr. Dallas commemorated. They both agreed that, if nothing else, the idea of a memorial plaque in LO.O.F. Cemetery with the names of fallen military personnel would be more appropriate than naming a park after him. Vorel was asked if there were any other avenues that could be pursued to commemorate Mr. Dallas and Vorel said that we have Legacy Park where a tree is planted in the park and a brick with the deceased's name is placed in a memorial area. This item will be brought before the entire Board for a vote at the March meeting. b) North Lakes Adult Soccer Conceptual Plan - Tickner presented a revised conceptual plan of the proposed adult soccer fields, restrooms and parking lots in North Lakes Park. Vorel explained that to keep the cost down the Parks Maintenance Department will help as much as they canto keep this project moving forward. With the latest plan, the existing trail will stay in place. There will only be four fields and temporary restrooms that are prefab and set in place, but can be moved to another location if needed. The concept plan presented will be sent to the City's Planning Department for review. Vorel explained that we may push this project back a year because of the Denton economy. He said that when this area is finished it will pull resources from Park Maintenance to sustain it and those resources are not available at this time. Wages wanted to know if some of the funds could be used to plant new vegetation now so it will be more established when actual clearing begins, which will give the wildlife and birds another place to occupy, which both Vorel and Jim Mays, Superintendent of Parks Maintenance, agreed was a valid option. Shelton asked what could be done now with the funds available as she was afraid that inflation would make the funds we have now not as valuable next year. Vorel said that the road would probably be able to be done and grading work could be done, along with the parking lot. Shelton also asked if there were other proj ects that the funds could be used for this year. Vorel will explore our options. c) Neighborhood Parks Concept Plans - Tickner presented concept plans for the three neighborhood parks being designed by Halff and Associates. The first one, Preserve at Pecan Creek, is a five acre park with a large mound of dirt left over from construction in the area. The decision was made to use the mound for an elevated playground and shelter area as it is in the middle of the park and makes the best use of the space. The second park is Wheeler Ridge and it will have a trail down the middle of it with sitting nodes, large granite blocks, down the ridge line. The third park, Owsley, has been a real challenge because it is only one-half an acre so it limits the possibilities, plus the park has drainage problems. To accommodate the drainage issues, the playground may be raised but the different elevations present challenges to meet ADA guidelines as well. A playground and shelter to accommodate 60 to 80 people for the Summer Food Program is being planned for the site. If there are enough funds available, a half court basketball court and covering over the playground will be considered. This small park is also used by the KKDK and Owsley day camps in the summer. A neighborhood meeting will be held for Owsley. d) Park Facilities Tour -After some discussion it was decided that a 2-hour tour will be held on a Saturday when the weather is warmer. Wages stated that she is not available on Saturdays so a separate, future tour maybe made available during the week. An invitation will be sent when the plans have been firmed up. PARKS PROJECT STATUS REPORT Denton Branch Rail Trail Bridges Project - Vorel stated that City Council is still looking at this item. Tickner said that part of the new lanes on Loop 288 are being closed to accommodate the work on the tracks, but the trail bridge will not be set at the same time. Wages thinks it would be short-sighted for the City not to rebuild the trail at this time. Senior Center Renovation and Expansion Project -The last of the furniture was scheduled to ship on February lst. The open house is scheduled for Saturday, February 20th and the Board will be invited. Unicorn Lake Trail and Landscape Project - Tickner presented a drawing of this project that the Board had not seen before. It has a mile long trail, a game field, and parking for 3 0 cars. It will also have a full size basketball court, a 20 x 40 shelter to accommodate 6 to 8 tables, along with a playground unit. It should be completed in late spring. With no further items on the agenda, Coe adjourned the meeting at 6:47 p.m. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Consider adoption of an ordinance of the City of Denton, Texas to declare the intent to reimburse expenditures from the General Fund with certificates of obligation with an aggregate maximum principal amount equal to $508,185 to allow for the implementation of a fixed asset module in the JD Edwards financial system and the purchase of a Municipal Court software system; and providing an effective date. BACKGROUND As part of the FY 2009-10 budget process, several projects related to the General Government's Capital Improvement Program were approved. Two of these projects relate to software purchases in the Finance Department and Municipal Court. Currently fixed asset records are maintained on Excel spreadsheets. There are a number of inherent weaknesses with maintaining fixed asset records in this manner. These issues, and the recommended solutions, have been discussed in detail with the Audit/Finance Committee, Public Utilities Board, and City Council. As part of the budget process, $250,000 in Certificates of Obligation (COs) was included to implement the fixed asset module in the JD Edwards financial system. The Municipal Court has operated on the Infosol court software management program since 1998. Over the past decade, other court software programs have been developed that enhance court efficiency. The City has identified the Incode software program as being a superior package in terms of data management and report writing capabilities, and as such, has included $300,000 in the budget for the issuance of Cos to make this purchase. However, since the General Fund will pay a portion of the costs, only $258,185 in COs will be required. The request for reimbursement is due to the timing of these projects, which are scheduled to proceed prior to the bond sale for this fiscal year. The bond sale for these COs will occur in late spring. The reimbursement of these expenditures from Certificates of Obligation will allow the proj ects to be executed as planned without delay. Agenda Information Sheet February 16, 2010 Page 2 FISCAL INFORMATION The funding for these projects will come from the issuance of Certificates of Obligation. A total amount of $508,185 ($250,000 for the fixed asset system implementation and $258,185 for the Municipal Court system) will be initially expended from the unreserved fund balance of the General Fund and will be reimbursed once the COs are sold later in the fiscal year. Respectfully submitted: Bryan Langley Director of Finance llca~adldepartme~ttslleallo~r doc~mentslo~dinances1101~ixed asset reimb~seme~t ord.~oc ~IDINAN~E N~. ~0 I AN DRDINANE ~F THE ~IT~ QF DENTIN, TExAS TO DECLARE THE INTENT T~ R.EINIBURSE ExPENDIT~JRE FROG THE GENERAL ~"IJND wITH CEI~TIFIATES ~F OBLIATIDN wYTH AN AC~RE~ATE ~IAIIVIU PINIPAL A~~]NT L~JAL T~ 5 X8,1 ~ 5 T~ ALL~w FAR THE YNIPLEII~NTATY~N ~F A ~`IxED ASSET ~VI~D~LE TN THE EDwA~DS FINANCIAL YSTiVI AND THE P~JRCHASE ~F A NIUNZIPAL ~I~I~T S~FTwAI~E S~YSTE; AND P~~~ID~NC AN EFFECTIVE DATA. ~wHEREA, the pity of Denton the `~SSUe~~ is a municipal corporation and political subdivision of the State of Texas; and WHEREAS the issuer ex ects to pay expenditures in connection with the upgxde of the P JD Edwards ~nadule for tracking flied assets and depreciation cast expenses across ~ the or anization, and to purchase a mare superior court software program in terms of data . • . r • • ( ~ management and report writing capab~lit~es far ~Vlunlclpal court Pray ect~ prior to the issuance aftax-exempt abi~gatlon to finance the prod ects; and HERE.A, the Issuer finds, considers, and declares that the reimbursement of the Issuer for the ayment of such expenditures will be appropriate and consistent with the iwful p ob~ ectives of the issuer and, as such, chooses to declaxe its lntentlan, in accordance with the F . ~ provisions of Section 1.15~w~ Treasury Regulat~ans, to relrnburse itself for such payments at such time as it issues the tax-exempt obligations to finance the Projects; New, THEEF~R, THE CL~NCIL OF THE CITY ~F DENTIN HERESY ORDAINS: SECTION 1. The Issuer reasaa~ably expects to incur debt, as one or more series of abli ations, with an aggregate rrlaximum principal amount equal to X508,1 ~ to allow far the irnplernentatxon of affixed asset system and the purchase of a municipal court software system. SETI~N All casts to be reimbursed pursuant hexeto will be capital expenditures and will came from the issuance of taxwexen~pt certificates of obligation. The funding required far the fixed asset system is ~50,00o and the municipal court software system is ~SS,1S5, far a total issuance of $505,1 S5. No tax-exempt obligations ~avill be issued by the Issuer in furtherance of this ordinance after a date which is later than 1 ~ months after the later of ~ 1 ~ the date the ex enditures are paid or the date on which the property, with respect to which such . 4 expenditures were made, is placed in service. The foregoing not wrthstanding, no tax~exempt obligation will be issued pursuant to this ordinance more than three years after the date any expenditure which is to be reimbursed rs paid. SE~TI~N 3. The request for reimbursement rs due to the timing of these projects, which are scheduled to proceed prior to the bond sale far this fiscal year. The bond sale for these Cis will occur in late spring and by approving this request will ailow the projects to be executed as planned without delay. i l~oc~a~l~e~artmen~sl~egall~ur ~acur~entslordinancesl~ ~~ixa~ asset reim~ursemen~ ord.dac ETON 4. The Endings set Earth in the preamble of this rd~nanae are incorporated by reference into the body of this ordinance s if fu~1y set Earth herein, This ~rd~nance sha.~~ became effective 1l~~ediate~y upon Its passage and apprava~~, PASSED ADD APPR~v~~ this the dad of , 2~~~. NARK A. U~~~I~S, N~A~~ ~ ATTEST. J~NNT~'ER ALTER, rT~ ~RETAY B~: PP~vED ~.S T~ L~AL PAR: AN~TA BU~C~E QTY ATT~RN~ . Page ~ of2 i AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Bryan Langley 349-8224 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager to execute a Professional Services Agreement between the City of Denton and MarketSphere Consulting, LLC for implementation of a JD Edwards Fixed Asset and Job Cost Functionality software module in the JD Edwards financial system; authorizing the expenditure of funds; and providing an effective date (RFSP 4442-JD Edwards Fixed Asset Implementation and Increased Job Cost Functionality awarded to MarketSphere Consulting, LLC in an amount not to exceed $252,340). RFSP INFORMATION In December 2007, the Denton Municipal Electric Accounting System Review prepared by the firm of RJ Covington was discussed with the Public Utilities Board (PUB). Sixteen (16) recommendations were presented in the Covington report. Of these, nine (9) recommendations were specifically related to fixed asset/job cost accounting. The remaining seven (7) recommendations were concerned with a variety of accounting and management issues that have been previously addressed and/or implemented. Following an analysis, staff developed a strategy to implement many of the fixed asset/job cost recommendations contained in the Covington report. The central theme of this strategy is to implement a fixed asset/job cost accounting module in the JD Edwards financial system which is currently operated by the City of Denton. To accomplish this objective, staff recommended that a Needs Assessment/Gap Analysis be conducted to 1) determine the organizational needs for fixed asset information and 2) to determine whether these needs can be met in the JD Edwards system. This strategy was discussed in detail with the Public Utilities Board on February 9, 2009, the Audit/Finance Committee on February 16, 2009, and the City Council on March 3, 2009. Also, on March 3, 2009, the City Council approved a contract with MarketSphere Consulting, LLC to prepare the above mentioned Needs Assessment/Gap Analysis. On October 20, 2009, staff discussed the results of the Needs Assessment/Gap Analysis with the Audit/Finance Committee, and on October 26, 2009, the analysis was also presented to the Public Utilities Board. The Public Utilities Board and the Audit/Finance Committee have both concurred with the strategy recommended in the Needs Assessment and Gap Analysis that was prepared by MarketSphere Consulting, LLC. Agenda Information Sheet February 16, 2010 Page 2 RFSP INFORMATION (CONTINUED) Following the completion of the Needs Assessment/Gap Analysis, a detailed Request for Proposal (RFP) was prepared to implement a fixed asset module in JD Edwards. The RFP was released in November 2009, and the City received three proposals for the implementation from MarketSphere Consulting, LLC, Denovo Ventures, LLC, and RS Infocon, Inc. Following a comprehensive review of the proposals, and selection of MarketSphere Consulting, LLC and Denovo Ventures, LLC for interviews, a staff committee has unanimously recommended that the implementation contract be awarded to MarketSphere Consulting, LLC. The implementation is scheduled to be complete by August 2010. PRIOR ACTION/REVIEW (Council, Boards, Commissions) The Public Utilities Board discussed the fixed asset software system during its February 9, 2009, meeting. During this meeting, the PUB directed staff to move forward in implementing the suggested strategy. The Audit/Finance Committee discussed the fixed asset software system during its February 16, 2009, meeting. During this meeting, the Audit/Finance Committee directed staff to move forward in implementing the suggested strategy. The City Council discussed the fixed asset software system during its March 3, 2009 work session meeting. Also on March 3, 2009, the City Council approved a contract with MarketSphere Consulting to prepare a Needs Assessment/Gap Analysis for the proposed fixed asset system software implementation. On October 20, 2009, staff discussed the results of the Needs Assessment/Gap Analysis with the Audit/Finance Committee. During this meeting, the Audit/Finance Committee directed staff to move forward in implementing the suggested strategy. On October 26, 2009, staff discussed the results of the Needs Assessment/Gap Analysis with the Public Utilities Board. During this meeting, the Public Utilities Board directed staff to move forward in implementing the suggested strategy. RECOMMENDATION Award a contract for implementation of a JD Edwards Fixed Asset and Job Cost Functionality software module to MarketSphere Consulting, LLC in the not to exceed amount of $252,340. PRINCIPAL PLACE OF BUSINESS MarketSphere Consulting, LLC Plano, TX Agenda Information Sheet February 16, 2010 Page 3 ESTIMATED SCHEDULE OF PROJECT The implementation is scheduled to be complete by August 2010. FISCAL INFORMATION MarketSphere has provided the City with a proposal to implement the fixed asset system module in an amount not to exceed $252,340. This amount is significantly lower than the previous estimate of $400,000 that staff provided to the City Council. However, in addition to the direct implementation costs, it is likely that an additional $197,000 to $260,000 will be needed to temporarily supplement Information Technology and Accounting staff during the implementation. These additional costs were anticipated by staff and discussed with the Audit/Finance Committee and Public Utilities Board last year. In anticipation of the above mentioned implementation costs, $250,000 has been included in the FY 2009-10 Capital Improvement Program budget (Certificates of Obligation) for the implementation phase of this project. In addition, the utility funds will pay a portion of the cost based on their anticipated usage of the system. Since the total implementation cost is not yet known however, the exact cost distribution by fund cannot be determined. Once the final implementation cost is determined, the costs will be distributed by fund according to the expected utilization of the system. EXHIBITS Exhibit l :Vendor Evaluation Ranking Respectfully submitted: . 1 Tom Shaw, C.P.M., 349-7100 Purchasing Agent 1-AIS-RFSP 4442 L i~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ i ~ ~ ~ ~ ~~3~ ~ ~ r s X W 0 ~ ~ ~ r~',~~ r~ L L L L ~ ~ ~ ~ ~ ~3 43 ~ ~ ,4~ ~ ~ ~ ~ o C~ C~ C3 C~ U 1~ 0~ ~ ORDINANCE N0. AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT BETWEEN THE CITY OF DENTON AND MARKETSPHERE CONSULTING, LLC FOR IMPLEMENTATION OF A JD EDWARDS FIXED ASSET AND JOB COST FUNCTIONALITY SOFTWARE MODULE IN THE JD EDWARDS FINANCIAL SYSTEM; AUTHORIZING THE EXPENDITURE OF FUNDS; AND PROVIDING AN EFFECTIVE DATE (RFSP 4442-JD EDWARDS FIXED ASSET IMPLEMENTATION AND INCREASED JOB COST FUNCTIONALITY AWARDED TO MARKETSPHERE CONSULTING, LLC IN AN AMOUNT NOT TO EXCEED $252,340). WHEREAS, the professional services provider (the "Provider) mentioned 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 associations applicable to the Provider's profession and such fees do not exceed the maximum provided by law; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION I. The City Manager is hereby authorized to enter into a professional service contract with MarketSphere Consulting, LLC, to provide professional consulting services for implementation of a JD Edwards Fixed Asset and Job Cost Functionality software module in the JD Edwards financial system, a copy of which is attached hereto and incorporated by reference herein. SECTION II. The City Manager is authorized to expend funds as required by the attached contract. SECTION III. The findings in the preamble of this ordinance are incorporated herein by reference. SECTION IV. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of ,2010. MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: 3-ORD-File 4442 I i i PROFESSIONAL SERVICES AGREEMENT FOR RFSP- 4442 JD EDWARDS FIXED ASSETS IMPLEMENTATION AND INCREASED JOB COST FUNCTIONALITY STATE OF TEXAS § COUNTY OF DENTON § THIS AGREEMENT is made and entered into as of the day of 2010, by and. between the City of Denton, Texas, a. Texas municipal corporation, ith its principal office at 2.15 East McKinney Street, Denton,. Denton County, Texas 76201, hereinafter called "OWNER" and MarketSphere Consulting, LLC, with its corporate office at 6860 North Dallas Parkway Suite 550 Plano, Texas 75024 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 EMPLOYMENT OF CONSULTANT The. OWNER hereby contracts with the CONSULTANT, as an independent contractor, :and. the CONSULTANT hereby agrees to perform the services- herein 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, 'JD.Edwards Fixed Asset. Implementation and Increased ,Job Cost functionality ARTICLE rI SCOPE OF-SERVICES The CONSULTANT shall perform the followirng services in a professional manner: The CONSULTANT shall perform all those- services as necessary and as described in the OWNER's RFSP 4442- JD Edwards Fixed Asset. Implementation and Increased Job Cost Functionality, which is on file in the office of the Purchasing Agent as Exhibit "A" and is incorporated by reference as-if set forth fully herein. A. To perform all those services set forth in CONSULTANT's amended Proposal for. Professional Services- dated Thursday, January 21., 2010, which proposal is on- -file yin the office of the Purchasing Agent as Exhibit "B" and is incorporated by reference as if set forth fully herein, B. 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 PERIOD OF SERVICE This Agreement shall become effective upon execution of this -Agreement "by the OWNER and the CONSULTANT and. upon issue of a notice to proceed by the OWNER,: and shall -remain in force for the period. which may reasonably be required for the completion of the :Project, including Additional Services, if any, and an'' required extensions. approved by- the OWNER: This Agreement may be sooner terminated in accordance with the provisions hereof.. Time 'is of the essence in-this Agreement. The CONSULTANT shall. make: all reasonable efforts to complete the services set forth herein as -expeditiously as possible and to meet the schedule established'by the OWNER, acting through.its City.Manager or his designee. -ARTICLE IV COMPENSATION A. COMPENSATION TERMS: 1-. ".Subcontract Expense" is defined as- expenses incurred :by the -CONSULTANT in employment. Of others in outside firms for services in the. nature of "to be determined". 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 PAYMEN. T: 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 is incorporated by reference a& if set forth fully in this Agreement. Exhibit B or other similar documents that may be executed by OWNER and CONSULTANT will contain- all pertinent' 'hourly -rates or: fixed fee. arrangements (if appropriate). The "'Proje'ct Arrangements" ' are included in Exhibit B. 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. The- OWNER. may withhold the final fve percent: (5%) of the contract amount .until. completion of the Project. Page 2 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 any additional services without obtaining prior written authorization from the OWNER.. C.. PAYMENT: If the. ON NER fails to :make undisputed payments due the CONSULTANT ,for services and expenses within thirty (30) days after receipt- of the CONSULTANT's undisputed statement thereof, prompt. payment act'. interest as set forth in Chapter 2251 of the Texas Government Code shall be paid on the amounts due the CONSULTANT. In addition; the CONSULTANT may, :if it has not received payment by the thirty-first (3 I") day after receipt of invoice,: after giving ten (10) 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, provided, however, nothing herein shall require the OWNER to pay prompt payment actAnterest if the OWNER has a bona. fide. dispute with the CONSULTANT, concerning the payment or if the OWNER. reasonably determines that the work is unsatisfactory, in accordance with this Article V, "Compensation." OWNER must promptly notify CONSULTANT in writing if any work is determined to 'be unsatisfactory or if there is a. bona. fide dispute. ARTICLE V 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 VI 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 OWNTER. uses any -of the information or materials. developed- pursuant to this Agreement: in another project .or. foe other purposes than specified herein, CONSULTANT' is released from. any and all liability-relating to. their iise'in that project.- Page 3 ARTICLE V11 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 VIII INDEMNITY, AGREEMENT The CONSULTANT shall indemnify and save and hold harmless the OWNER and its officers, 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 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 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 fled 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 -the following insurance. with an insurance company licensed to do business in the State of. Texas by-the -State ,Insurance Commission or any successor agency that has a rating with Best Rate Carriers of at least an A- or above: A. Comprehensive General Liability Insurance with bodily injury .limits of not less. than $500,000 for each occurrence and not less. than $500,000. in -.the aggregate, and with property damage limits -of not .less- than $100,000 .for each occurrence.. and not. less than. $100,000 in the aggregate. B. Automobile Liability Insurance.with bodily injury limits of not. less than $500,000 for each person and not Iess than $500,000 for each accident, and with property damage limits of not less than $100,000 for each accident. C. Worker's Compensation Insurance in accordance with statutory requirements, and Employers' Liabi I ity Insurance with limits of not less than $100,000 for each accident.. D-. Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate. Page 4 E. The CONSULTANT shall furnish insurance certificates or 'insurance policies at the OWNER's, request to evidence such coverages. The- insurance policies -shall name the OWNER as an additional. insured- on all such policies, -and shall contain a provision that such insurance shall not be. canceled or modified without thirty (30) days' prior written notice to OWNER and CONSULTANT. In such event, the CONSULTANT shall,''prior to the effective date of the change. or cancellation;; serve substitute policies furnishing the same coverage. ARTICLE X ARBITRATION. AND ALTERNATE DISPUTE RESOLUTION The parties may agree to settle any disputes under this Agreement by submitting the dispute to mediation. No mediation arising out of or relating to this Agreement 'may proceed without, the agreement. of both parties to. submit the dispute to mediation. The location for the .mediation shall be the City of Denton; Denton County, Texas unless a different location is agreed to by the parties. 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 thirty (30) 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 fnal. 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: IV "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. Page 5 :ARTICLE XII RESPONSIBILITY `FOR CLAIMS AND LIABILITIES Approval by the OWNER shall. not constitute, not 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 ethploye.es, subcontractors, agents, and consultants. CONSULTANT retains design responsibility and liability at all times. during this Agreement :and after corimpletion 'of this Agreement. 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 marl, return receipt requested',. unless otherwise specified herein. Mailed notices. shall, be deemed communicated as of three (3) days'.mailing: To CONSULTANT: To OWNER: MarketSphere Consulting, LLC -City of Denton :Director ofrCorporate Services Bryan Langley, Director of. Finance 1125 S .103 d Street. Suite 400 21,5 East McKinney Omaha, NE. 68124 Denton, Texas 76201 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, consisting- of X15 pages and four exhibits, constitutes. the complete and final expression of the 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 inv.al.id 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- Page 6 .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 Vitention 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 they.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, national origin or ancestry... age- or physical handicap. ARTICLE XIII PERSONNEL A. The CONSULTANT represents that it has or will secure, at its own expense, all personnel required to perform'.all :the :services re quired 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. C.. In those instances deemed necessary bythe OWNER, the CONSULTANT, its employees and/or its Sub-consultants shall be required to submit to background checks. ARTICLE XIX ASSIGNABILITY The CONSULTANT shall not assign any o.f -its scope of work under, in this Agreement, and shall. -not transfer any of its scope of work.. under this Agreement (whether by assignment,. novation, or, otherwise) without the 'prior written consent of the OWNER. Should the CONSULTANT assign any part of the monies due under this Agreement, CONSULTANT is required to provide written notice of the same to OWNER. Any assignment of monies due'under this Agreement shall not change any of the terms or conditions of this Agreement-to'include but not limited to the terms and conditions for payment under this Agreement. Page 7 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:. (list exhibits) B. CONSULTANT agrees that OWNER. shall, 'until the expiration of five (5) years after the final payment or after final completion of all work required under this Agreement, whichever is longer, have.access to and the right to examine any directly pertinent 'books. documents, papers, correspondence, to include e-mails, and records of the .CONSULTANT involving transactions relating to this Agreement: CONSULTANT is required to, maintain and make available. all electronic records associated with this Agreement. for -purposes of examination. CONSULTANT agrees that OWNNTER shall hare. aecess:during normal working hours to.aIl necessary CONSULTANT facilities and .shall be provided adequate 'and appropriate working space. in order to. conduct audits in compliance with. this section. OWNER shall give CONSULTANT reasonable advance notice of intended audits. This paragraph shall work in conjunction with the Audit provision set forth ~in Article XXII. C. Venue of any suit or cause of.action under this Agreement shall.lie, exclusively in Denton County, Texas. This Agreement shall be construed in accordance with the laws of the State of.Texas. D. For the purpose of this Agreement, the. key persons who will perform most of the work hereunder shall be Greg Davis. However, nothing herein shall limit CONSULTANT from using other -qualified and 'competent members of its firm to perform the services required herein. CONSULTANT understands that OWNER is to be informed of the removal -or loss of any of the key persons working under this. Agreement. CONSULTANT also agrees to provide the OWNER with notice of the name(s) of who it intends to replace th.e..:key -person.- OWNER shall have aright to reasonably reject any replacement key :person(s) and CONSULTANT agrees to name a replacement- key person(s) acceptable to the OWNER. E. 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 Page 8 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. F. The OWNER shall assist the CONSULTANT by placing at the CONSULTANT's disposal all available information pertinent to the Project, including'previIous 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. G. 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. ARTICLE XXII 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 CONSULTANT ashall 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 unresol"ved,. 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 1.0 business days of written request. Further,, the CONSULTANT 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 CONSULTANT which must Abe 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 ate subsequently used to generate or prepare a final. printed document. Page 9 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 t is Agreement through its duly authorized unddisigned officer on this the day of 2010. CITY OF.DENTON, -TEXAS GEORGE C. CAMPBELL, CITY IvIANAGER ATTEST: JENNIFER WAITERS, CITY SECRETARY i - BY: APMOVED.AS-TO LEGAL FORNL- ANITA BURGESS. CITY ATTORNEY BY: COI~ISIJLTAN'T f ~aL. WITNESS: BY.: CITY OF DENTON INSURANCE REQUIREMENTS FOR. CONSULTANTS/CONTRACTORS The Offeror'slBidder's attention is directed to. the. insurance-requirements below. It is highly recommended that offerors/bidders- confer with their respective insurance carriers or brokers to determine in advance of its proposal or bid submission the availability of insurance certificates and endorsements as prescribed and provided herein. If an offeror/apparent low bidder fails to comply strictly with the insurance requirements, that offeror/bidder may be disqualified from award. of the contract. Upon award, all insurance requirements shall. become contractual obligations, which the successful offeror/bidder- 'shall have -a duty to maintain throughout4he course of this contract. STANDARD PROVISIONS: Without limiting any of the other obligations or liabilities of the Consultant/Contractor; .the Consultant/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 award. Consultant/Contractor shall file with the Purchasing Department' satisfactory certificates of insurance, containing the proposal/bid -number and title of the project. Consultant/Contractor may, upon written request to the Purchasing.Department,. ask for clarification of any insurance requirements at any. time;. .however,. Consultants/Contractors are strongly advised to make .such requests prior to proposal/bid opening, since the insurance requirements may not be modified or waived after proposal/bid .opening unless a .written exception has been submitted with the proposallbid: -Consultant/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. Any deductibles or self :insured retentions shall be declared in the proposal or bid. 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 Consultant/Contractor shall procure a bond guaranteeing payment-of losses and-related investigations, clairri administration and defense expenses. • Liability policies shall be endorsed to provide the following: Page l 1 Name as additional. insured the City of Denton, its Officials.-Agents,, Employees and volunteers. e 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 whomclaim is made or suit is brought. The, inclusion- of more 'than one insured shall not operate to increase the insurer's limit.of liability. O 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. a Should any of the required insurance be provided under- a claims-made form, Consultant/Contractor shall maintain such coverage continuously throughout the term of this contract and, without lapse, for a period of three years 6eyorid 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. e 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 Consultant/Contractor shall. either double -the. occurrence limits or obtain Owners and Contractors Protective Liability Insurance. a 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. Page 12 SPECIFIC ADDITIONAL INSURANCE. REQUIREMENTS: All insurance policies proposed or obtained in, satisfaction of this Contract shall additionally comply with the following marked spec f cations, and shall be maintained in compliance with these additional specificalions-.thrvughout the duration of the Cont ,;act, or longer, 'if-so noted.- LXJ A. General Liability Insurance: General Liability insurance with combined single limits of not -less than $500,000.00shall 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. LXJ 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: LX_J 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 5406.096 of the Texas Labor Code and rule 28TAC 1.10.110 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. L_J 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 aportion of a City building. Limits of not. less. than each occurrence are required.. LX_J Professional Uability Insurance Professional liability insurance with limits not less than .51,000,000 annual aggregate with- respect to negligent acts, errors or oinissions in connection with professional services is required under this Agreement. U Builders' Risk Insurance Builders' Risk Insurance, on `an. All-Risk form for 1000 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. L_] 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. Page 14 Additional Insurance Other insurance may be required on anindividual' 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. Page 15 CONFLICT OF INTEREST QUESTIONNAIRE FORM CIO For vendor or other per son doing business with local governmental entity This questionnaire reflects. changes made to the law by H.B. 1491, 80th. Leg., Regular Session. OFFICE USE ONLY This questionnaire is being filed in accordance, with chapter 176 of the Local Government Code bya Date Received person who has a business relationship as.defined by Section 176.001(1-a) with a local governmental entity and the. person 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 person becomes aware of facts that require the statement to be filed. See Section 176.006, Local Government Code. A person commits an. offense if the person knowingly violates Section 176.606; Local Government Code. An offense under this section is a Class C misdemeanor.. 1 Name of person who has a business relationship with local governmental entity. 2 F] 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 7`h business day. after., the date the. originally filed.questionnaire becomes incomplete or inaccurate.) 3 Name of local government officer with whom filer has an employment or business relationship. Name of Officer This section, (item 3: including subparts A,. B. C & D), must be completed for each officer with whom the filer 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 orlikely to receive taxable income, other than investment income, from the filer of the questionnaire? Yes 0 No B.. Is the filer of the questionnaire receiving or likely to receive-taxable income, other than investment income, from orat-the direction of the local government officer named in this -section AND the taxable income is not received from the local'governmental. entity? 0 Yes F-1 No. C_ Is the filer of this questionnaire employed by a.corporation or other business ehtity with respect to which the local government officer serves'as an offrcer.or director, or holds an ownership 6f"10 percent or more? Yes F-1 No D. 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O'l N Q .iL ~.s E ftftft" v L C ~4-.:N tllD N ~ _ ~ 'Fo p- Q U 3 O U C Q', e~ L L nnW o We. ;io _ . _ E ` - L O - d? U - O N 0: L O V U . J. . Q1 Q . L , - +r L . _ . : M. V - m - ,v N M : . m 0 L. . M . . :N . CCu~ : ti ' : ~ _ N -emu- j co ,q. . - . , L . " G , , 11 - . . , , , , - - O --Cc LO 'd. O . 1 -*61 ~f . M- M_ . - . 4). N i? " a} _ . - . m I. .1 I >j.. . . 9- ~ . . . . . :.:,...Cn- , - - - - - - - - - . ~ I . . .-.40- 4) .r . . - . - = .`r . _ . _ - _ - . .m ,r . - . . ~ . - . Proiect Arrangements and 'Billing Schedule MarketSphere's fees for the activities described in this agreement will be billed on a time and materials basis, plus° actual out-of-pocket expenses. Out-of=pocket expenses (including transportation, hotels, meals, etc.) will be billed at the actual Amounts incurred not-to-exceed $22,940. MarketSphere will bill in accordance with the following billing schedule: ,Billing, Descri Pion Billing Bilking, Date March Billing Actual hours incurred, plus expenses March 30, 2010 April Billing Actual hours incurred, plus expenses April 30, 2010 May Billing Actual hours incurred., plus expenses May-31, 2010 June Billing Actual hours incurred, plus expenses June 30, 2010. July Billing Actual hours incurred, plus expenses July 31, -2010 August Billing Actual hours incurred, plus expenses August 31, 2010 September Billing Actual hours incurred, plus expenses September 30, 20.10 October Billing Actual hours incurred, plus expenses October 31, 2010 Change Order.Process During the project-either party may request, 'in writing *in a form substantially similar to MarketSphere's standard form. of change order (see form attached hereto), additions, deletions, or modifications to the scope or. nature of the Services described in. this Statement of Work (all referred to hereinafter as "Chan.ges"). MarketSphere shall have no obligation to commence work in connection with any Change until the fee and/or schedule impact of the Change is agreed upon in a written change. order signed by both MarketSphere and. Client. Upon a request for a Change, MarketSphere shall submit a proposal to Client on MarketSphere's standard change order form (or in a. form substantially similar to MarketSphere's standard change order-form attached hereto) describing the Changes, including, as applicable, the impact-of such. Changes on schedule and fees and. expenses. Within 5 days of receipt of the proposed change order, Client shall either indicate its acceptance of the proposed Changes by signing the. change order or advise MarketSphere not to perform the Changes, in which event MarketSphere shall proceed with the original Services. The foregoing notwithstanding, if MarketSphere, at- the request of or with notice to Client, performs work that is not covered by this Statement of Work or that exceeds the scope of Services described in this Statement of Work, such work. shall ,be: deemed Services. provided pursuant to this Statement of Work, for which Client shall compensate MarketSphere at.the same rates as those described in this. Exhibit.. MarketSphere Consulting Statement of Work Change Order Number. [date] [Client contact .name] [complete legal name of Client entity] [Client address] Deaf [Client contact name]: This Change Order, including any appendices, schedules, and/or attachments, documents changes to the.Statement of Work between MarketSphere Consulting, LLC ("MarketSphere") and [Client's complete legal name] ("Client") dated , 200_, including any prior Change Order(s) or amendments thereto (the "Statement of Work"). This Change Order constitutes the entire understanding and agreement between Client and MarketSphere with respect to such changes, supersedes all prior oral.and written communications. with respect to such changes (including, but not limited to, written change requests), and may be amended, modified or changed only in writing when signed by both parties.. The section(s) of the Statement of Work set forth below is/are hereby amended, effective as of -the date first written above,. by adding at the conclusion of the: respective section(s) the following text: Proiect Scope and Obiectives [describe any changes to this section here. or, if there are none, delete this form field along with the section label immediately above] MarketSphere Services and Responsibilities [describe any changes to this. section here or, if there are none,. delete this form field along with the section label immediately above] Deliverables [describe any changes to this section here or, if there are none, delete .this form field along with the section label immediately-'above] Acceptance [describe any changes to. this section here or, if there are none, delete this form field along with the section label immediately above] AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Michelle McCallum 349-7709 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance accepting competitive bids by way of an Interlocal Cooperative Purchasing Program Participation Agreement with the City of Carrollton under Section 271.102 of the Local Government Code, for the purchase of Incode Software for the City of Denton Municipal Court; providing for the expenditure of funds therefor; and providing an effective date (File 4465-Interlocal Agreement for Incode Software for Municipal Court with the City of Carrollton, contract awarded to Tyler Technologies, Inc. in the amount of $258,185). FILE/BACKGROUND INFORMATION The Denton Municipal Court processes approximately 54,000 cases on an annual basis. Since 1998, the Infosol software system has been used to manage the volume of court cases and citations. Since the purchase of Infosol in 1998, more efficient court processing systems have been developed and are in successful use across many municipal organizations in the state. The City of Carrollton, for example, is currently using the Incode system in their Municipal Court with success. The City of Denton has an existing Interlocal Cooperative Purchasing Program relationship with the City of Carrollton. The purchase of the Incode software is recommended to be facilitated under this purchasing method. The City Council considered and approved the purchase of a new software package for the Municipal Court during the formulation of the FY 2009-10 Budget. The new software package was proposed because the current software package is no longer meeting the needs of the Court in terms of flexibility in data management and reporting tools. Frequently, reports must be generated from data extraction and then processed manually in the format desired. The migration to a new court software system will enhance the management and report capabilities of the Court. In researching new programs to recommend for purchase, site visits were conducted in 2009 by a City team, including a member of the Technology Services staff, the Municipal Court Administrator and the Municipal Judge. After observing the software's real-world application in the City of Carrollton, the recommendation to purchase Incode was proposed. In addition to gaining increased system functionality, there are cost savings projected as well. Like many software programs in the City, Incode will be supported through the Technology Services Department. The Municipal Court currently transfers $53,808 annually for Technology Services to support the Infosol system. Due to anticipated changes with support for the Infosol system, the total annual maintenance cost would increase to $99,800 in FY 2011-12, if we don't change to Incode. Agenda Information Sheet February 16, 2010 Page 2 The annual maintenance of the Incode system is projected to be $46,821. By converting to the Incode software system, this lower annual maintenance fee will be a cost savings of approximately $264,895 from what the City would have paid Infosol over afive-year period. FILEBACKGROUND INFORMATION The project timeline for the software conversion will be approximately seven months. In conjunction with Technology Services staff, the Municipal Court staff will work with an Incode project manager to prepare our current processes for conversion into the new system. The Municipal Judge will also work in tandem with the Municipal Court throughout this software transition. Additionally, on-site trainings and testing will be conducted to ensure a successful migration to this new software program. PRIOR ACTION/REVIEW (Council, Boards, Commissions) Council approved an Interlocal Agreement with the City of Carrollton on October 3, 2000 (Ordinance 2000-366). RECOMMENDATION Award the purchase of Incode Software to Tyler Technologies, Inc. in the amount of $258,185. PRINCIPAL PLACE OF BUSINESS Tyler Technologies, Inc. Lubbock, TX ESTIMATED SCHEDULE OF PROJECT The Court is anticipated to be fully operating on the Incode system in late August. FISCAL INFORMATION The funding for this court software package will be from the issuance of $258,185 in Certificates of Obligation and $46, 821 from the Municipal Court budget. This project will be funded from account 300025461.1365.30100. Requisition 97510 has been entered in the Purchasing software system. Agenda Information Sheet February 16, 2010 Page 3 EXHIBITS Exhibit l: Agreement Exhibit 2: Ordinance Respectfully submitted: . 1 Tom Shaw, C.P.M., 349-7100 Purchasing Agent 1-AIS-File 4465 AGREEi~ENT FAR Dl~PU~'ER ~FTVI~ARE Lf~ENE AhID ERVIE This agreement the "Agreerr~ent"~ is nude by and between the Ci of is ar . Denton, Texas the CITY }and TylerTechnolog~es, lnc. the "VE~VDOR~ . ~ } ~ . DefEnition a. Auf}~or~zed fte. CITY shall use the of~vuare only an the cam utr p equ~prnent at the location the "Authorised ite~} listed below: Denton ~Ilunicipal Court andlar Denton Police Department andlor Denton Resolution Center b. Cer~r'f~ca~e o~ lr~~~a~~afion. The term "Certificate of Installation" shall mean a written notice signed by 11ENDCRt certifying that the software has been installed and that the software substantially complies with the s ecification set . ~ Earth ~n Exhibit A, attached hereto and made a part of this A regiment fvr alf g purposes. c~ ICY. The term, "CITY"shall mean the City of Denton, Texas. d. ~ffec~ive ~a~e. The term, "Effective Date" shall have the r~eanin . g set forth ~n subsection ~a of this Agreement. e. ~x~~br~s. The fallowing are exhibits to this Agreerr~ent, and are hereby incorporated herein and made a part hereof far all ur oses. Ta the pp extent there i a conflict with this Agreement and its exhibits, the terms of this Agreement will apply. {i} Exhibit A: Software specifications iii} Exhibit B: Iternizatian of foods and services Provided viii} Exhibit C: Training Requirements Div} Exhibit D: Fees {v} Exhibit E: Implementation Plan Zvi} Exhibit F: Data Conversion Process vii} Exhibit lUlaintenance Agreement f. Fees. The term "Fees" shall mean the fees as set forth ire Exhibit D of this Agreement. I g. frrder~n~~res. The term "Indemnities" shall have the meanie set fo rth i n u /~y+~/.ya ~ bsectfon ~ ~ ~ of thls Agreement. I h. lr~~ring~er~err~ ~air~. The term "lnfrin errrent lairn" shall have the meaning set forth Nn subsection ~ ~ a of thNS Agreement. i. o~`fvuare. The term "Software" shall mean the cam uter . F p procedures, ales, and documer~tatfon concerned with the operation of a data processing computer system as described in the specifications set forth in Exhibit A, The term "Software" includes any corrections, bu fixes, enhancements ~ , updates, or other modifications, including custom modifications, to such compu#er and user manuals. j. source ode. The tern "Source bode" shall have the meanie set . ~ forth in subsection d of this Agreement. k. source bode ~ven~ The tear "Source bode Event" shall mean the occurrence of any of the events set forth in subsection d ~'r} of this Agreement. 1. ~'es~i~ Perioa~. The term "Testing Period" shell mean the eriod of . p ~~r~e set forth in subsection 4d of this Agreement. m. ~1nau~hari~e~ bode. The term "l~nauthorized bode" shall have the meaning set forth in subsection j of #his Agreement. n. IIEND0~4. The tern "11EN1~~" shall mean Tyler Technologies, inc., a Delaware corporation. 11END~R' ~biiga~ions 'rn enerat~ In accordance uuith this A regiment 9 , Vendor shall supply the goods end services identified in this Section. a. The hard ware, software, documentation, and any other items identified in Exhibit B, attached hereto and made a part hereof for all ur oes~ p p b. The necessary licenses far the ofkvuare as set forth in this Agreement; c. The delivery, installation, data conversion, maintenance, and related services for the ;terns identified in Exhibit l~; d. The training of ITY' personnel as set forth in Exhibi# , at#ached hereto and made a part hereof for ail purposes; and e. All other goods and services, although not specifically described in this Agreement, but that are nevertheless reasonably necesa to IIEND~R's performance pursuant to this Agreement. I f, Follouving the warranty period set forth in this A regiment and provided that the CITY has duly executed hand is not in breach o the f} Nia~ntenance Agreement, VENDER shall provide the maintenance and su ort ervi Rp ces with respect to the oftwargi as set forth in the Maintenance Agreement attachgid hereto as Exhibit . license a. rarr~ of C.rcense. VENDOR grants CITY, pursuant to the terns and conditions of this Agreginrrent, a perpetual, irrevocable and nonexclusive license to use the software, subject to CITY'S payment in full of the licginse fees set forth on Exhibit ~ and the restrictions on use set forth in this A regiment. 9 b. F~e~r~~~or~ orr C1e. CITY agrees to use the Softwargi onl for l y TYs business. CITY shall not perrn~t any Chard pa to use the Software CITY shall not ~'r} revgirse engineer, de-compile, ordisaer~bfe an onion of the . yp Software or fib} sublicense, transfer, rent, or the leasgi the Softwargi or its use e. g c. Copies. CITY, solely to enable it to use the oftwargi, may make one archival copy of thgi Software's cor~puter program, provided that the co . py shall ~ncludgi E~VD~R s copyright and any other proprietary notices. The Software delivered by IIEND~R to CITY and thgi archival cop shall be stored at Y CITY s site. d. source bode. VEIVD~R maintains an escrow agreement with an gicrow services company under which Company places the source code for each major release of the oftwargi {the ;`Source Cade"}. 1lEND~R shall include thgi CITY as a bengificiary on its escrow account, the initial annual fee for which is set forth on Exhibit D, CITY shall be responsible for maintaining its status as a benefc~ary. This subsection sets forth the CITY's right concerning the source code forrr~ of the oftwargi {the "Source Code"}. ~i} ;`source Code Event" means the occurrence of one or more of the follovuing events: ~A} VENI~~R files for bankruptcy and fails whgin requested by the CITY far more than 1~ days to provide any services under any agreement between the CITY and 11EN~~R relating to the Software; ~B} 1lEND~R materially breaches its obligations to provide any maintenance and support servicgi under any agreement between the CITY and 1lEND~R rgilating to the Software and fails to cure such brgiach within o days after the ITY's written notice to 11~N~~R; 3 I VENDER ceases to offer software r~aintenance far the Software other than on a time and materials basis; There i a change in control of VENDER; cr {E} VENDER ceases to be the owner of the Software. iii} ff and only if ~ Source Cade Event occurs, the CITY ma y access and modify the Source Code as necessary or useful for the CITY's rights and uses of the Software as set Earth herein. 4. Delivery, Installation, Data Conversion, Testing ar~d Acceptance a. Deliver. VENDOR shall deliver the Software to CITY in accordance with Exhibit E, Implerentativn Plan. b. lnfalla~ion. VENDOR shall install the Software at the bite in accordance with Exhibit E, Implementation Plan, DITY shall rent VENDER access to the Site and the computer system far the period of time required for such installation, end shall give VENDOR priority use of such stem Burin y 9 ~nstallat~an. Upon completion of installation, VENDOR shall deliver tv CITY a Certificate of Installation. c. Da~~ Dor~verian. VENDOR and the OITY shall perforr~ their respective duties for data conversion as set forth on Exhibit F, Data Conversion Process. d. T~~r~. OITY shall have sixty {~0} days, commencin u an i ` dei~very of the Dertificate of Installation, to test the Software far compliance with the specifications set forth in Exhibit A {the "Testing Period"}. During the Testin Period, CITY shall immediately provide nonce to VENDOR of an failure of the i . ~ . F Software to substantially comply with Exh~b~t A. Upon rece~ t of such notice p , VENDOR shall promptly remedy the failure and install a fix. If such notice is provided by CITY to VENDOR, the Testing Period shall be extended thrvu h the to g th~rt~eth }day after VENDR' last receipt of notice of a failure of the Software to comply vuith Exhibit A ar ninety {9a} days after the delive of the . rY Certificate of lnstallat~an, whichever occurs first. e. Accep~arrce. Acceptance shaft occur ~i} upon CITY's delivery of native to VENDOR that the Software substantially complies with the specifications set forth in Exhibit A, or {ii} if CITY does not provide notice of a failure of the Software within thirty {~D} days of the Testing Period, then u on the ■ i i close of the Testing Period. 4 I f. isirrg ~rrxponer~~s. Except a provided else~rhere in this Areer~ent, if any items necessary far the turnkey installation of the aftware required by CITY to muse the software to function in accordance v~rith this Agreement, VENDER shall license such saft~vere end conve such items to . r r 1TY at no add~t~onal charge to 1TY; provided, however, that such items do not relate to internal systems of the pity that were not disclosed to VENDER rior to VEN p DOR subr~~ss~on of the Proposal. Fees in consideration far the license granted by VENDER, and the other cads and g services provided far herein under this Agreement, CITY shall pay VENDER a fee as set Earth in Exhibit D the "Fees"~, which shall be due and a able b the . py y CITY ~n accordance with Exhibit D. ~~rners~ip a. subject to the provisions of this Agreement, ~iTY and EN~~R agree that VENDER o~rn all proprietary rights, including patent, co ri ht, trade . pY g secret, trademark, and other proprietary rights, in and to the offare and an Y corrections, bug fixes, enhancements, updates, interfaces, or other rnod'rfcation made by VEN DAR. b. Afl training manuals, technical dvcumentatian, and other related ~vritten materials developed solely by either art shall be the sale ro p Y p party of such party. Any training materials developed jointly by the artier shall be p awned jointly by the parties, and each party shall be entitled to exercise all ri his f ' ~ g a o~unerh~p of such n~aterNais ~r~thout any duty to account to the other. c. Ali CITY data shall remain the property of the pity, and VEN~~R shall not use such data other than in connection v~ith providing the services pursuant to this Agreement. 7. onf~dentiallnforn~atiQn Except as other rise provided by law and this Agreement, the artier p hereto agree that all proprietary and confidential information disclosed b the oth r ~ y e during the performance of this Agreement shall be held in confidence and used only in performance of this Agreement. If such information is ubficl p y available, already ~n one party's possession or knovrrn, or is thereafter ri htfull ~ y obtarned by one party from sources other than the other pa ,there shall be no . ~y restriction ~n its use. 8. Training VENDER shall provide a training pragrarn as described in Exhibit . 5 I warranties ~ a. VENDOR uwrarrants that the information ravided in its r p espane to CITY s Request far Proposal for Software License is correct in ail n~ateria! respects and that DITY r~yy rely an said response, attached hereto as Exhibit G and rude ~ part of this Agreement far all purposes. b. VENDOR, and all personnel of VENDOR engaged in instaiiin gr r~aintaining, and supporting the Saftwyre, and providing trainin thereon, cam I . ~ pY with ail federal, state, and Iocal laws, regulation, orders, and ordinances pertaining to this Agreer~ent, and have the skill and knowled e t icall 9 Yp y possessed by members of their trade. c. The Software, when instafied at the Site in accordance with this Agreement, will substantially conform to the Software specifications set forth on Exhibit A and to the then current version of its published currents ecif cations. p d. After final acceptance of the Software, the Software will substantially conform to the specifications set forth in Exhibit A for sa Ion as g CITY has a written agreement with VENDOR to provide maintenance. if the Software does not perform as warranted, VENDOR shall cam i with its pY obligations underthe ~Ilaintenance Agreement. e. Ali services provided pursuant to this Agreement andlar an aintenance Agreement will be performed with due care and in a workmanlike manner in accordance with reasonable commercial standards, f. Ta the best of VENDR's knowledge, information, and belief, there has been no legal action regarding the Software in the six years prior to the Effective Date, there i no action threatened andlar pending of any kind or nature that would affect VENDOR'S ability to fulfill its abiigatians arisin out of this 9 agreement. g. VENDOR has foil authority to perform its abligatians arising out of this Agreement, a vuell a any enhancements, n~adificatians, maintenance, and upgrades, and that such performance shall not infringe the patent, co ri ht py 9 , trademark, andlar misappropriate the trade secret andlar other propriety ri ht rY g of anyone. h. VENDER recognizes that CITY is unfamiliar with the licensed ar custom program, and that iTY may justifiably rely on VENDOR'S representation concerning the amount of training necessary. i r. VENDOR has full authority to grant to CITY the license far the Software and to perfarn~ the services described in tJ~is A reerrfent andlor an 9 y f~laintenance Agreement. • ~ ~R i a~ ~ ~f Na cam uter virus, bu , to ~c bomb warrn, bacfc dear, tra door " "dro dea " ~ f ~ p d, ar time fuck" has such terns are Known in the corn utgir induct in ~ ry}, tentionally ancfuded disabling instructions, andlor similar latent features ~collectivefy, ~`Unauthori~ed adgi"}, is resent in the software a ~ s follows: ~i} Upan installation, VENDOR has e~camined thorou hf gY the software with the mast advanced techniques and sarare then available and has promptly removed such Unauthari~ed odgi, if any, that VENDOR has discovered. {ii} Neither VENDER nor an agent or emplayegi of VENDOR has intentionally placed Unauthorized fade in the aftware. ~iJi} Neither VENDOR nor an agent or en~playee of VENDER shall introduce any Unauthorized fade to the af~ware. k. Far one hundred eighty fig} days follou~ring the JTY's recei t of the Cert~~cate of Installation, VENDOR shall, at its sale a erase, rom tl re air I~ f~ P Y p or replace any and all Software that fails tv conform to any warren gicified in . tY f~ this Agreement, after which time the terms of thgi Maintenance A regiment shall 9 apply. I. Far the duration of this Agreement, the vftware will, at elf times correctly use, stare, calculate, display, and function with dates later than December ~ , ~ X99 and with dates earlier than January ~ , ~a~0; that the ear a0a is r y ecogn~~ed as a leap year with EGG days, and that all dates include the century. THE I~lARRAJVTIE SET FORTH IN THIS SECTION g OR ELEUVHERE IN THE AGREEMENT ARE 1N LlEU OF A~.L OTHER UIJARRANTlES. TO THE IUTA~fMUIU! E~CTENT PERMITTED UNDER APPLICABLE LA1 ALL OTHER 'U1~ARRANTIE, DOfVDITIOI~J, ANf] REPREBENTATIOJV U1~HETHER E~PRES, IJI~I'LfED ~R VERBAL, TATUTRY OR OTHERUIE, ARE HEREBY EXCLUDED, fNDLUDJfV U111THOUT LIMiTATIOIV, THE IMPLfED WARRANTIES OF I~ERHAf~JTABILITY AND FITfVES FOR A f~ARTIULAR PURPOSE. I ~ Limtitation of Lia~il~ty. ~~R BE LIABLE FAR S~EiAL, INDIRECT, IN N~ EVENT SHALL IIEN ~R E7~ENIPLARY DAMAGES, ~R FAILURE INDIDENTAL, ~NSEC~UENTiAL, BUT OF OR IN ~NNEDTI~N 1~l1TH THE T~ REALIZE SAVINGS ARiSiN USE ~F THE S~FTVI~ARE. ~ ~ . Inde~nnifioat~on lrrderr~r~i<~re. 11END~R shall defend, fn~el~ectc~a~ Property . ITY its it Dounc~l, officers, agents, and lndemn~ty, and hoid harmless Y , ' ~ ~ ollectivel the "lndemnitee"}, at VENDER s employees ~~ndlv~duaily and ~ y~ ` and ali losses, damages, and expenses tnclud~ng expense, from and against any . ' claims and actions {individual#y and coiictively an reasonable attorney s fees}, . ~ ~ ' ' f a claim that an mater~ai or service furnished Infir~ngernent Ia~rr~ } ar»~ng out o Y ' ent andlor an maintenance Agreement ~nfr~nge ~ pursuant to this Agreem Y , ` an trade secret or proprietary rights of another, patent or copyright or v~oiate y . in ement Claims suffered by or awarded against VENDER shall pay lnfr g F im is settled VENDER agrees tv pay such settlement lnderr~n~tees, or ~f such cla amount, provided that: VENDOR shall be notified promptly in writing of any action and related claim. VENDER shall have sole control after consultation ~i~~ the defense of an action ~nclud~ng the right to select wath CITY, ofi settle rovided, however, that VENDOR shall not counsel and to , p . , ` ettlement that in any gray d~n~~n~hes CITY rights enter into any ' li atians arisin out of this Agreement, without first orVENDORs ob obtaining ITY's express, written consent. As to an art of the Software uvhich is subject to a Y p ' `n err~ent or mica ropriation, EN>~OR nay elect to, at clam of ~nfr~ g pp ' nse ~ obtain the right of continued use ofi such park its sole expe , ~ } rarn for OITY, or ~ replace or modify such part of the of the grog ~ ~ m to avoid such claim; provided such repiacer~ent or progra ification does not n~ateriall~r+---dir~i.nih CITY'S rights or mod VENDOR's obligations underthis Agreement, ' set forth in this Section ~ ~ ~a} does not apply to the extent The ~ndemn~ty im is attributable to modifiications ofi the Software made by that such a cla n third art uruant to the CITY'S directions, or upon the the D1TY, or a y p y p unauthorised use of the Software by the CITY. ~n~er~r~~~ie, VENDOR agrees to indemnify, hold b. ~~G~I~1~~?~~ demnitees from and a ainst liability for any and a!! harmless, and defend the ! n 9 8 I ' or other claims for fraud, civil rights violations, or for property suits, actEans, or arsenal in'u of an character, name, and description broughtfor or damage p ] rY Y ant of an ne li ant act or fault of VE~1D~R or of any agent, employee, on acca y g ' ubcantractor or u liar in the execution of, or performance under permEtted s pp ' ment and~or an tfaintenance Agreements provEded, hov~ever, that this Agree y ll not be liable herein to indemnify the lndernnities against liability ENI~R she ' in out of bodil in'u to people or damage to property to the for damages arE g y 1 rY bodil in'u or ro art damage is caused by or resultEng from extent that such y ~ ry p p ' li ant or otherwise, of any of the indemnities. 1f END~~ shall pay the actEOns, nag g ' v~ith cysts which ma be obtained against lndemnites arising out any audgment y of such in~u or dan~a es, including reasonable attorneys' fees. ~ 9 ~1~N~~~'s Safes Res orrib~l~#ies. 11END~R further agrees that it cr Y ~ ' s exercise reasonable recautions on behalf of, and be solely shall at all tEme p ' the safet of 11l*ND~'s officers, agents, employees, permitted responsible for y li ensees and invitees. VENDER expressly agrees that CITY subcontractors, c t t be liable for the ne li ence of VE~ID~R or a perrr~itted subcontractor, shall no 9 g ' that of 11~ND~R's officers, agents, employees, and those of a lncludEng permitted subcontractor. trrdemn~~ Prov~~orrs Addir~ional ~o ~~f~er CITY ~4eed~es. d. y ~f/f/ Rand 1TY a ree that this indemnity provision shall be consEdered ~n f I~ l~ l~ ~ ~ y . ~ . ' such other remedies as CITY nay possess at lava and ~n equEty. This addEt~on to ' ' ' t` n vbli ation shall not be limited in any gray by any limitatiaE~s on the ~ndemn~f~ca Eo g r t of dame e, compensation or benefits payable for or by amount o yp g . or an ermitted subcantractor, manufacturer, or suppler under the IIEND~R y p ' om ensation Act disabilit benefit acts, or other employee benefEts U~orker p ~ y acts. e. lairr~ for labor and ~1a~r~a~s. VENI~~I shall indemnify and save ndemnitees from all claims for labor and materials furnished under thEs harmless l nt. Uvhen re nested b CITY, II~NI~~R shall submit satisfactory Agreeme q y that all arsons, firms, or corporations, vuho have done ~rork or evEdence p ' materials under the A regiment have been fully paid or satisfactorily furnished g . . In case such evidence is not furnished or is not satisfactory, an amount secured ~~y{11 be retained from monies due V~Nt~R ~uhich, in addition to any other suns she r retained vrrill be sufficient, in the opinion of CITY, to meet all claErr~s that E~ay be , firms and cor orations as aforesaid. such sum or sums shall be of the persons, p . ' it the liabilities as aforesaEd are fully dESCharged or satESfactorEly retained ant secured. f. ~ifra~ Pa fnerr~. I=inal pyE"nent to EI~~~R by CITY vuill not be y ile an suit or olaim referred to in this ectEOn EregardEng EndeE~nEty~ made vuh y remains unsettled or until all appeals are exhausted. 9 I Profecffor~ o~ Pro er# rid Pub## ~#ab!##fy. V~NDaR shall pay fvr g. A Y s resultin from its o erat~ons. 11~NDal~ shall be fully responsible any damage g p the rotection of all ersons, including members of the public and er~playees far p p ontractors of ermitted subcontractors and all public and private ~ of other p property. ~ ~nura~ce Require~ner~t~ NDa~ sha11 ravide and maintain vUorkers Compensation utrith a. V~ p . ' . laid Disc shall contain a vUaiver of ubrogat~an ~n favor of the statutory I~rn~t p y City. ravide and maintain in full force and efl:ect during b. I~ND~R shall p ' slit insurance includin ,but not limited tat the time of this Agreement, auto lab ~ ~ ~ ' overin the o eratian of ovuned and non-ovuned automobiles, trucks insurance c g p ' les rotectin V~ND~R and CITY as an Additional insured Frith and other vh~c } p 9 , ' ' not less than one million dollars ,ggO,Ogg.~D} per accident far any auto. l~m~ts c, V~hID~R shall provide general Liability Insurance. such insurance II have limits of not less than one million dollars ~~,a0a,ag0.Og} per sha and two million dollars ~,aa~,aaa.Og} annual aggregate such occurrence ~ ' alit shall be in an occurrence form; "claims made" policies are not insurance p y table. The eneral Liability Insurance must name the CITY as an accep Additional 1 nsu red. ~NDaR shall also ravide and maintain Professional Liability d. ~ nd omissions insurance coverage to protect 1l~NDa and CITY from errors a . ' ' arisin out of the ertormance of professional services, if any, under this liability g p nt. such covers a sha11 be in the sung of not less than one m~ll~on Agreeme g rs ~ ~a~ D~a.00 er occurrence. such insurance shall be kept in effect rears after the cam letion of the contract. !f 1lENDaR fails to ma~nta~n far fou y ~ e covered Burin that time, CITY may pay the premiums to keep the the ~nsuranc g insurance in effect and recover the costfrorn the 1l~ND~R. A si ned Certificate of Insurance, satisfactory to CITY, shovuing e. g ' Frith the re uirer~ents of this Article shall be furnished to CITY before cor~pl~ance a rvices are erformed~ such certificate shall provide g days ~rr~tten nvt~ce any se p riot to the cancellation or modification of any insurance referred to to CITY p 'nue to issue such certificate far four years after completion of therein and cants o deductible shall a 1 to any demand made by CITY far the contract. N lip coverage. ll of VEiVDaR's insurance providers shall be admitted and f. A ' to do business in the state of Te~cas and shall be rated at least A:11 ~n author~~ed et Com an ' #r~surar~ce ~r#de. Insurance policies and certificates A.I. ~ ~ Y issued b non-admitted insurance companies are not acceptable. y ~0 I An deductibles or self-insured retentions must be stated on Y 1~ENDR' certificates of insurance, which s~alj be sent to and approved by CITY. ~ 3w Tern and Termina~i~n~ a. ~ffec~r"ve Dade. This A reement and the license granted herein shall take effect u on the date that the last party executes this Agreement. b. ~er~ninaffor~ for Defau~~. Each party shall have the right to terminate this A reement and the license granted herein upon the occurrence of the following everts: i In the even# the other party violates any material provision of this A reement and after receipt of written r~otiee either ~A} the alleged 9 breachin art fails to reined such breach ~th~n thirty {0} days or if g p such breach cannot be cured within such thirty day period and the alle ed breachin art demonstrates the reasons therefor, the alleged g g~ breachin ark does not have a mutually agreeable plan to remediate g~ such breach within such thirky X30}days; or ii I n the event the other party ~A} terminates or sus ends business, ~B~ becomes subject to any bankruptcy or p insolvenc roceedin s under Federal or state statute, Y i~ g becomes insolvent or subject to direct control by a trustee, receiver, or similar authority, or ~D} has wound up or liquidated2 voluntarily or otherwise. c. ~errr~ina~ian forLaok of Apprapria~ed funds. V~NDO~ agrees that: should the Cit Council overning CITY fail to appropriate funds to pay for goods y g ervices not ahead acce ted under this Agreement, CITY may terminate this ors y p A reement without enalt or further obliga#ion as to the goods or services not g p Y ce ted+ rovided however, that in such event, CITY shall pay for all goods and ac p t p , services delivered rior to the notice of termination, CITY shall nat be entitled to p . a refund of an r~onies aid, and if not paid in full, the license granted herein Y ~ shall terminate. ~4. As~~nmenf. Neither ~ND~R nor CITY may assign this Agreement without the x Tess rior written consent of the other parley. A sale of fifty percent X50°l~} or ep ,p more is an assignment. I Force ~lajeure 1Veither party shall be in default yr othr~rise liable for any delay in or failure of its performance under this Agreement if such delay or failure results from f re, explosion, act of hod, or of the public enemy, v~ar, civil disturbance, terrorism, quarantine, eplderr~lc, or catastrophe. ~ Notice Alf notices under this Agreement shall be given in Writing and by certified mail, return receipt requested, at the addresses appearing belovu: A. Notice to CITY Kevin Bunn, Director Technology Services pity of Denton, Te~ca F. McKinney Street Denton, TIC ~~~0 ~ B. Notice to ~NDO~ ~ ~ 5~r~ Street Lubbock, Texas ~g4~ 4 Attn: Brett date ~7. eneraf Provision a, Comp#efe Areerr~errt. The parties agree that this Agreement is the complete and exclusive statement of the agreement bet~reen the parties, which supersedes and merges all prior proposals, understandings, and all other agreements, oral or written, bet~reen the parties relating to this Agreement. b. Arrrerrdr~er~#. This Agreement may not be modified, altered, or amended except by Britten instrument duly executed by both parties. c. ~lafver. The Waiver or failure of either party to exercise in any res ect an ri ht provided for in this Agreement shall not be deemed a Waiver of p Y9 any further right under this Agreement. d. evera~flrfy. If any provision of this Agreement is invalid, illegal, or unenforceable under any applicable statue or rule of lave, it is to that extent to be deemed omitted. The rernainderof the agreement shall be valid and enforceable to the maximum extent possible. e. overr~irr ~.a~. This Agreement and performance hereunder sf~all be governed by the lags of the State of Texas. I f. ~Ier~ue. Any lau~suit arising out of this Agreement shall lie tried in Denton fount ,Texas, or, if hraught in the federal courts, in the Northern District Y of Texas, . Re~ationl~tp of par~fes. This Agreement does not create ~ g arknershi or joint venture relafi~onsh~p, nor does it author~~e any party fie serve p p as the ie l re resentative or a ent of the other. The relationship of IIEND~R to g ~ g ~ 1TY shall be that of an independent contractor, IN vvITNE I~vHERE~F, this Agreement has been e~cec~ated by ~ duly authorized officer of each party hereto. TWE I`~Y of DENTO~I TYL~~T~HNOLOCI~, INS. By: ~y: Name: Name: . Brettate Title: Title: President Local ~overnmen~ DE~r~s~on Date: Date: 11~I1 ~ APPROIJED A T~ INTENT APPROVED A T~ FARM . ti Y~ 8 ~ Y' Nty A~korney I ~xh~~it A Software eificat~o~ Master files are used to reduce the need to re-enter often used information, cades, persons, and vehicles. A "List vUindav~' for al! fields marked with an * allows the user to select code from the screen during input withaut having to look up information in separate manuals, and provide the ability to add new cades from a lookup window without exiting to a file r~aintenance program. 3. All dates in the system use a four {4} digit year. The fallowing is a partial list of user selected options that must be provided: 4. Docket numbers can be manually entered, au#omatically entered by the systern, ar the citation number can be automatically used as the dac#cet number. 5. The street name andlor block used in the location of a violation can be validated against a Master street Index to verify spellings and black numbers. This feature can be de-activated. A zip code file should be used to automatically enter city, state, and area code. fi. The pity name+ state, and zip Cade can be defaulted far new citation entry. 7. The user can define un I im ited warrant types. 8. The user can optionally keep a history of previous addresses for persons in the Master Larne file, The user can optionally add a fee to citations involving an accident 1 a. A fee can be added to warrants when issued. This is done for each of the warrant types. ~ ~ . The system allows partial payments to be taken far a fine and distributed to the feesfcastslfines, fineslfeeslcasts, ar a percentage to feeslcostslfines. ~2. The systems does not allow the same docket number or citation number to be used mare than ante. Cltatiarr File ~ The system allows the user to attach multiple violations to the basic citytian information. Each citation has the fine and multiple fees andlar court casts attached to it. The feeslcastslfine can be increased ar decreased withaut affecting other citations with the same violation. 94. if a violator is a juvenile at the tame of the violation, an indicator is set far that citation to so indicate. i~a~ior~ er~er~! ~a~~ ollec~eaf by fhe y#er~ i ~ 5. Ditation number 1 B. Date violation accurred 1~. Time violation occurred, can be military or AI~1P>I~ ~8, Date citation filed in Dourt ~ 1JVas an accident involved? Was hazardous material involved? 2~. Name of the violator see i~laster Ne~ne File for detaii~~ Information on vehicle involved see Il~aster Vehicle File far detail}* ~3. officer issuing citation see officer File for detail ~4. County vuhere violation accurred tiliola~~orr Inf~rmafron Co~lecfed by the ~yferrfi emu{tipfe violafi~n~per c~~a~~or~} ~5. Docket nur~ber assigned by system, ranually entered, ar same as citetian na.~ ~6. ~ffense~ 7. Location of the violation block, street}* ~8. Intersections t_acat'ron of intersection black, street~* 30. L.acation grid fuser defined 3~ , Attorney of record ~frarn Attorney file~~ 32. Judge scheduled to hear case from Judge file}# 3. Plea entered* 4. Date plea entered 35. Date of conviction 36. Date conviction reported to state 37. Current case event status 38~ Due date of current event 3, Due time of current event Perrd~ng lnforrr~a~r'an 4Q. Pending event status #1 41. Pending due date of event #1 4~, Pending due time of event 43. Pending event status #2~ 44, Pending due date of event 45. Pending due time of event #2 4. Pending event status #3~ 4~. Pending due date of event #3 48. Pending due time of event #3 Misc. ~errera~ lnformafior~ fathered the Sys#er~ 49. vl~arrant status of case D. Fees due for case 5 ~ . aurt costs due far case 5. Fines due far case 5. Total amount due far case 54. Bond set by fudge 5~. Band pasted by violator ~6. Type of bond pasted ~7. lndicatar for "No Bond„ 58. Band agent or attorney 59~ Drivers Lfcense suspended? fia. suspended date B1. End suspension date fit. Date suspension report to state B3. Bpecial sentencing fib. Other campiainant G5. Pasted speed limit Actua! alleged speed ~7. Direction of travel i fib. Construction zone fig. Road conditions ~0. Traffic conditions 7~ , Uveather conditions 7~. Type of radar used 7~, A complaint farm can be printed for each violation an each citation entered. pertain violations can be flagged to not print a complaint. The complaint form for each violation is user defined. 74. A user defined setter can be produced automatically to send to the parentlguardian of juvenile offenders. erreraf Cr'fatior~ Repar~s ?5. List Citations by vialatior~ Date ~6. List Citations by Filed Date 7~. List Citations by itatian Number 78, List Citations by Docket Nurber 79. List Citations by Uiolatar Name 8a. List Citations by Officer 81. List Citations by Violation 8~. List Citations by Location 8. List Citations by Court Date 84, List Citations by Due Date and l=vent 8b. List Citations on Payment Plan Nl~s~er Name ~'i!e Sfi. The Master Narrae file holds inforr~ation an all persons in the court system, Qnce a person is added, they can be attached to multiple citations without re-entering their persanaf information. A saundex code a generated far the first and last Warne to allow searching for names that sound the sane but are spelled differently. 8~, A history file can be kept on changes of address an a person to assist in warrant service. The fallowing inforr~ation can be maintained; Cerreraf frrfora#~v~n G~#hered by fhe ysfer~ 88. Last Name 8g. First Name I 90. ~liddie Name 9 ~ , u~ix Name 92. ~oundex code last name 93. oundex code firs# name 94. Date of bir#h 95. ex* 9fi. l~ace~ 97. Hispanic Ethnic Designator* 98. Height 99. Weight 100. Hair ~olor~ 101. Eye ~olor* Drivers License fnfora~icn ~afhered by the ys#em 102. Drivers license number 103. Drivers license tate* 104. Drivers license expir. year 105. Drivers license type* 105. Drivers license DL? 107. otfrer ~erreral Infor~rratiorr 108. ether I D num ber 109. hoc sec n u ~ ber 1 ~ 0, Address 111. ~biock, street, apartment no, city, sta#e*, zip} 11~. Home phone 113. occupation 114. Employer ~ 15. Employer address 1 ~5. block, street, city, state*, zip} I 1 ~ Uvork phone General Master 1Va~re Deports ~ 1 List of person by name. 1 ~ 9~ Last of person by sex, race, date of birth, ethnicity. 1 ~D. List of persons with associated vehicles Master Ve#~icle File Requiremenfs The Master Vehicle file holds information on all vehicles. Once a vehicle is added, it can be attached to multiple citations without re-entering the information. Make of vehicle* 123, Model of vehicle* ~ Bady style of vehicle# ~~5. Year of vehicle ~ 2~. Velrr'c1e color* 1 Z7. Can~mer~cial ve~lcle? 1 ~8. VJN X29. License plefe iafe* ~ 30. License plate rrr~r~ber 13 ~ . License plate expi~at}orgy year Genera! f~as#er Veftr~le Deports ~ List of vehicles by make, model, year. X33. List of vehicles by license plate inforation. ~ 34, List of vehicles with associated persons. Officer N1as~er File lnforma~ion 135, The Officer Master file allows officers to be associated with their citations without typing in the names every time. ~ 3fi. ~itatian books can be entered as they are given to officers to kaep track of citation books issued verses citations issued. ~3?'. The days off schedule can be maintained far the officers to assist in court scheduling. X38. An officer"s badgelid number can a changed without affecting citations already entered into the cour# system. I 139. ~~frcer agency* 14D, ~l~icer badgelid nurrrber ~ 41. officer lash Warne 142. ~fricer first Warne ~ 43. ~r~rcer middle initial 144. Officer rank 145. Of~cerphone number 14fi. Officer pager number 14~. Drcer shift asignment* 148. Officer days ai`f"k erreral O~Ficer departs 149. List of officers by name. 150. List of officers by agencylbadgelidWumber. 151. List of officers by days off. 1 List of officers by shift assignment. 153. List of citation books assigned to an officer. 154. Outstanding citations by officer. ~lt#arr~eyl~and Oa, & Collec~iar~ ~Igenay Nlaler File 155. The AttarneylBond Oo. & Oollectian Agency Master file should eliminate the Head to type in attorney information for cases. Lists can be run for cases by attorney or surety bonds by attorneylBond Oo or Oollection Agency. 156. Aflorney fond Oompany or col{eo~ro~ ~ger~cy 157. onfac~ Person 158. Firrnlompany name 159. Fr'rrrrlorr~pany address 16g. 81pok 1 ~ 1. tree# 162. pity 163. tate~ I 154. Grp 1 fi 5. Phone number ~ Bond Limn genera! A##orr~eylJuafel~ond' Co. Reports 1 List of Bond companies by name. X58. List of attorneys by Warne. 159. List outstanding bands by attorneylBor~d company ~ List pending court oases by attorney. warrarrr l~las~er F11e Informa~r'~rr ~ 71. IlVarrants can be issued automatically by the system or selected by the user and printed by the system. served warrants can be left in the system for historic infarr~ation. The user can define an unlimited number of warrant types and set up the warding for each. A warrant fee can automatically be added to the fees and costs when a warrant is issued. 178. Warran# number 174. Type of warrar~l fuser defirred~ ~ 7~. Da#e warrarrif was issued 1 Arnourr~ of band set for warrant 177. Amounf due far warrant 178. l~anre fpervn warrant issued for ~frorn ~lasler lllame flle~ 179. Vehicle inforrrra~ion ~frorrr l~asfer Vehicle file} . 18a. Dade warrant closed 181. 1~ow dosed served, recafled, canceled} 18~. Person c{o~ir~g warr~nl 188. officer warrant assigned fo for service 184. tatelRegionai Data Bank Information 1 S~, lD number 185. Date enfered 187. Person enferrng informafran I 188. Dade removed 189. ~ersan removing rn~ora~lon General Warrant Reports ~ 9D. List of Warrants Issued~* 191. List at Vvarrants Cleared** 19~. List of Ullarrants Outstanding by date, person, or vehicle.~* 193. List lillarrants entered into tatelRegian data bank 194. List Vliarrants removed from tatelRegion data bank 195. **Option to include name~addres information. 19. Vlfarrant listing will show warrant far person requested as well as all aliases for that person, payments arr~ ~isposi#lor~ of Cases 197. The system gill allaw fees, casts, or fines to be changed when payments ere entered. 198. The system will allow payment in full or partial payments. 199. hands can be posted and forfeited to pay fees~castsffines. SOD. Credit can be applied to a case far various types at camrnunity service ar jail time. ~a1. Receipts are printed and numbered far each transaction. ~D~. Cases can be set for pre-trial, hearings, trials by judge, ar trials by jury and a case docket printed for each pending court session or prior court sessions. X43. Cases can be placed on probation, deferred adjudication, ar driver safety course and tracked through completion. Paymerrfs Reports X04. ~ Payments by date ~a5. Payments by Receipt number ~0~, Payments by Fees~atsll=ines X07. Payments by L account number 2D8. Fees~Cast distribution for quarterly report to state Disposr'#ior~ Reports X89. Conviction report to state Texas format far mag media reporting} I 210. Various court docket schedules by ~udgeldate~type of trial. 211. I~onthl~ judicial report to state. 212. fist of persons requesting Drivers safety Course, 21~. Dist of cases pending b}r various status Bond Reports 21~. outstanding bond list. 215. Bands Posted 21. Bonds Forfeited~Refunded System Ir~t~rface 2 ~ 7. Central Cash receipts I Exhibit B ~temiiation of Goads and services Provided customer Nart►e: Ctty of Denton, Tl(- ~Ilunicipal Court . confatt; Kevin Gunn . date: January ZOitl ° ; Salesman: Lee l4Gdki~ Software i_iceres and Professional Services Estirnated tcstlrnated A lcation Software QTY license Fee Conversion hours Services Total C AnrwaR h~aint+errenee WCODE Court Case r~M1anageme~ Criminal Court Cie Managemen4 1 115,54a 19,004 180 20,a0a 154,500 2$,875 Centrafizad Cash Colectior~ 1 12,500 32 4,a44 i8,8Ua 3,iZ5 CAatian lssuirg device Interf$Ce (Krems) 1 2,250 I~fA turA 2,254 583 Court iNCODE Weh services 1 4,400 I~fA turA 4,40Q 1,104 General Ledger (non•INCODE} Irrierface 1 5,5D0 htfA NIA 5,500 1,375 CoMectionAgency ExpaR tr~erface 1 2,750 NfA NrA 2,750 8$$ WCODE Printing and Repor#aq Solutions Secure 5igrratures (r'ncl~des 4 sigrnatures] 1 1,375 tJfn NIA 1,375 344 Tyler Output l~racessor Tyler Outp~ ProcessorServer 1 5,500 14 1,75a 7,250 7,375 - base Tap Engine - Print Output Channel -Tyler Content Management Gukpu# Channel - ~mait Output Ctrannel l.aseriictre Output Cannel ~ 4,460 4 5d0 4,900 1,1a0 WCDDE Content il+>gnagement LaserficS~e Court Suile tr>tertave 1 4,440 8 1,~4Q 5,4a4 1,7a4 INC01]E Proiessior►al Services J'r+o]ect f~at~errrertt 15A4a 15,000 t'ro]ect Consukir~ 32 4,40a 4,OOa Final ln~plementatian $a 14,40a 10,aao system sotiware System Software 1 6,535 N1A 8,535 1,834 AocuODBC # users 30 7,240 turn 7,2a4 1,800 i NC~E Subtotal 15$,575 19,000 21$ 27,250 244,825 39,644 Project A~anagemer~ 15,000 15,000 Project Cansuttin9 32 4,400 4,aQa F'urallmplerrrentatton $a 10,000 14,4x0 q+ICODE System Software Srrbta#al 43,735 13,735 3,434 ~'otal 172,310 18,a0a 330 58,250 247,SE0 43,078 Aca.M~aL 34 i i D Customer Name: City of Denton, 7~(-Municipal Court Contact: Kevin Gunn • ~ . t. pate: January 4, X010 . . , Salesman: iLee Midtcif# ~Qf1YC~S1011 BI"@~~(~OW~1 Canversian programming Estimated Applica#ioa Soiiwam Fee Hours i:stimated 8ar+rices Court Case iwlana~ement Ticket hllas#er File ~Subjec#ta eha~ge basedon Vendor} ]~,t14Q 32 4,OQ~ Wan•ani ~4as#er File lr~clcded aockel h~asier File IncluQed Car~version Total ]5,000 32 q~,ppp Customer Dame: City of Detrtor#, TX - Mu~ic~pa! Court Contact: Kevin Gunn ~ : ;R; < <;w E Date: Jan~ary4, ~01D " , 'W talesman: L,ee Midkitf Cash Collection Ha~dw~r~ M'►stallat'ron Annual tAisc, Hardware and Network Equl~. RZY Purchase Price Expenses Maintenance Maintenance source Cash Collet#ion L Epson 1'M-U950P ReceiPtVaidation Panker ~Para~eQ (L~ 5 5,075 203 INCODE • 1~ mos werrar~y Mega Plus Automated Cash Drawer (L) 5 1,000 40 IhiCODi: -12 mos v~rraety h+~g Stripe Reader ~L) 5 1,040 Tapax Signature Pad T-L4t:2 (L) 5 1,750 Gourk EyebaN Camera (i.y 5 30D lnstaiation and Configuration or` S~+stem of Hours) 1 9,504 r~~ ~,T~~ ~4~ Please refer tQ ~VCOD~$ ~AtA polky for a!! r~atrlms. F bus#omer Name: C~#y of Derr#on, TX - Mu~icipa! ~vurt ~oritac#: ~eviq Gann Date: ~ian~ary 4, X090 Salesman: fee Midkiff ~U~~n~ Service Annual Fee INCODE Student Center yster~ IiVCODE Student Center 3,5Q~ -Continuing Professional Education Credit unlimited Aess to INebinars and Archived IIVe~inar - Unlimited Access to Self Study Courses -Open for A~.L EmploPyees during sutascription period - Mon#hiy Vllehinars coverir a varie#y of topios • Court quite • General Knowledge -Online Self study Courses -New 1Nebinars and Self Study Courses added througttou~ the year Tyler Tecirrrofogies,ltUCQD~ S4lr~f~on rs regr"sfered wr~h the Na#~orra! Asoc~tier~ of to#e Boards of ~ccou►~fancy (NASBA} as a sponsor of conf~~~rrg pro~essiorrral edducat~n on fhe Nafiertal Regr'sfry of CAE Sponsors. Sfate Boards of Accourrfancy lave final authar~y on the acceptance of ~ndividuat courses for CAf credo`. Complarr~f regarding registered sponsors may be addressed #a the l~ationa! Registry of CAE Sponsors 95a Fourth ~verrue Nortf~, Scrri~e T00, Nashvi~e, 7N, 37~~9-2~~7. We~s~e: wwu~nasba.or~ To#al 3,~ i I G EACH I BTT ~`rainir~ R~uirn~en~ Contents a1L V r ~r 1 ~ Lr 1~1~ ~a~~~~~~~~~~~i ~~~aa~~~F~i~~~a~~~~i ~a~~a a~.~~~~~~~~~~~~t~a~aai~..~~~~a~~~i~~~a ~~~~~~~....~~~~~~~~~~~a a~~~...~~~~~~~~~t~i~~~~~~ta,.r ~~~~~~r~i~i ~~~~a~a ~a~..~~~~~~~~t~i ~~~~~~~~i~~l~i~~~ !~~]~1~ LI on Tralnit l V Lr~~~ Y ~ .~~~~~t~~~~~~~~~~i~~~~~~t~~~~~~~~i~a~a~~a~a.~*~~w~~~~~~a~a~ai~.n~~~~~~t~i~~taa~a~,.~~~~~~a~~~~~i~a~~aa~~.~i~~~~~~t~i~~~~~~a~a~.~~~~i~~~~t~i~a~ it ~+V Mr~ 4J V{~w/ +'~Niiti.kL 111 Vii~~a~i ~~~~a~~~~N ~~i~~~~~~~~F~a~a ~~~~i ~~~~~~F~i~~a~~~a~u a...~~~~a~F~~~~~~~~sa~~..~~n~~~w~~~u~~~~~.~. ~~~~F~i~~u~~~~a ~a ~...~w ~~~~~~a~i ~~~~~~a.a~r.~~~~~~~i1 ~i L i Ly 4Ri~ ~~V 1 1 l~V i i iJ4.i 41 V +i ~~~~~~~~~~i ~a ~~~~tl~~~~a~~a~~~~a~F~i aa~a4~~~~~~~~r~i ~~~a ~~Faa ~~r~i~~a~~~~aa ~~r~aa.~~~~~~i~~a~~~r~i ~a~~~~.~~~~~~~~~~F~i~~~~~~~~~.~~~~ai~~~~~ ~a +.1 Tr~l i i i li}.. V ~V i I ~ 4 • ■ ~r~~+~~~i~~a~a~~w ai~rr~~~~~~~~F~~~~a~.~~~~~a~~~~~~a~~F~a~~~a~a..~~~~~F~i~~~~~aa~aa~~.~~~~~aa~~~a~~~~w ~aM~.~~~i~~~~a~~~FaF~~a~~~.N ~~~~~~~~i~~~~F~i~a~ai~.~i~ ~~~a Traz ~1.., {l Y L ~~...~~n ~~t~i ~i~si ~a n ~~~r~~t~~~~~~t~i ~a~r~~~~i~~~~t~i ~~~~~~~~i.~~~s~i~~a ~~~~aa ~~~~t~~*~~~~~i~~~~~~i aa~~a~a~~. t~~~~~~~~a~i~~~~~~t~a ~.~~~~r~~~~~~ra~~~~~t~a C ent~aliz ed ~ S h C o11~Gti a n s ■~ps~aa~f~~ n~~~~~~~w~~~~a.~~~~~~~~~~~~~~saa~~a~~~F~~~~~~~~~~~~~~~F~a~aalf~i~~~~F~i~~p~~aaa~aRY~~~~ia~~~~~~~F~~~~p~~.~~~~~~~n~~u~~a~a~~~{a+i i P 1 n r~ M~~~ ~~~~~~...~~i ~~~n~~~~~i ~a~a..~~~n ~~ta~~~~~t~i w~~~~~~~~a a..~~~i~~t~~~i~~a~~~t~a ~...~~~~i ~~~~aa to ~~~~~~~~~..~~~n~n ~~~~~~t~i~a~~..... Training ~verviev~..........~~~~~~~~~F~~~raa~•Y~l~F~a~~~~~~i~■u~~~..~~p~~~~~~~~~F~~~a~~~~~~~~~~~tai~~pf~F~a..~.~~~~a~~~~i~a~~~~t~~~a.~n~~~~~~~~~~~~~a~~~~~~i~~n~~~~~~~~~~~a~~~~ F T ralr~ ~ n f.` V ~~~~~4 a~~.~~~~~~a~~~a~a~~~r..~~~~~~~~~~~~~~a~~~~~.r~~~~~~~~i~~a~~aa~a~..~~~~~~~~~a~~~~~~~~~~.~1~~~~a~~~t~iaa~~a~~~ay~~~~~~~t~a~~a~~~aw ~a~~.~~~i~~a~t~i~i~~~~ wa~~~~~~ 1 Tl ~I■Jlli afn~ i'14~~1 i~ ~~~i aa~a.. ~~~~i ~i ~a~~~~~~a ~..*~~~~~~~Fai~~a~a~ta~~~~~~~~~~~a ~~F~a ~a~~w ~~*a~~~~~~~~a ~Fa ~~a a~aYa~~~~a~F~a~~~a a~a~~~~~~~~i ~~~~~~F~~~a~a a~~~. ~~~~~~~~F~i~~~~Fw ~~aa4~f~~~~~n V i ~f.., 4L~j ~1 ~ n ~ ~~~~~~~~~~~~~~..~~~i~~~~~~~~~~~~~~~i ~~i ~~~~~~i ~aaa~~~.. ~~~~~~~~~F~a ~a~~~~~~F.i ~r~~~~~a ~~~~~~a~~i ~a ~~.~~~rn~~~~tai~a ~~~~a~~a~~~~~~~~~ i I I PL,~N 0~ R~~ Ew IN~DI~E gill conduct training meetings to discuss the plan, timeline, and training rnateria~s needed. Based on these meetings, a document will be prepared, The training materials will he provided as a separate document. The training plan provides class descriptions, a training matrix, training dates, tune and locations, and personnel to be trained. Training wiil Dacus on all stakeholder related to this project. Training will lie conducted by course name. A~~L~~T~~ TR~IN~ ~~~TI~TE C4l~RT C~ I~NAiJ~1~IENT PR~~~~U7~~T1~ INIi l~~~ATIO You will need the following items far training ~ List of badgelid numbers of persons wag complaints in the court. ❑ Sample citations far practice entry. ❑ List of current violation codes and fee schedules. i ❑ sample complaints, warrants and letters. Sample of any requixed State reports. ❑ Lisp of county roads. ❑ List of account numbers for fees and fines. ❑ List of general ledger cash account and bond account numbers. ~ List of general. ledger refund account nurr~bers. TRA~NIN~ ~~~~Ew 2 of 5 We will cover the fallowing items during this t~rainirig session Setting up all code tales and documents. • Entering and maintaining citation information, ~ Citation clispositivns. • Letters. Master Name and ~Vehicie des. • Court Calendar. • Court Docket. ~ Complaints. ~ Nvn-Cash transactions. TRA~NIN~~ DB~~CTI~E Qur objectives for the training sessions are • Citation Processing o Enter and ruake changes to citativnslviolativns. o Move violations through various processes and dispositivns~ Case Processing a Create and print Court Dockets. D "~'rarisactlon f nput End•of dad Close Dut Procedures for Court • Manage the Court Calendar. • Warrant Processing ~ Warrant Reports ~ ~]ury processing i • Pepvrts + security Farms, Complaint Documents o Create and pint complaints, 3 of 5 ~ ~f~~~~. o Create and print various letters. CE~ITRALI2ED BAH COLLECTIONS ~E~EU'IITE INFORMATION You will need the following items for training: ❑ Listing of misc. receipt information with related general ledger account information. ~ Curxent collectio~a policies in regards as to how moneys are handled. TIAINIIVC OE~'~E'' we wig. cover the follawi.~.g items during this training session * treating endorsement codes. • Terminal maintenance. • Operator maintenance. * Adding transaction codes. • Faking single and multiple payments. • Operator processing. ~ voiding a receipt. • Transferring information to subsystems. T~I~iI~G OBJECTIVES Our abjecti~res for this training session are • ~lelp customer identify process in which terminals, drawers and operators wild. be processed. • Assist customer in setting up terminals and operators. • Illustrate the use of transaction codes. Instruct the customer in adding transaction codes, • Provide general overview of haw payments integrate with various INCOME modules. ~ Instruct the customer in processing a payment, printing a receipt, validating and endorsing a check. • Explain the operator close out process. 4of5 + Assist customer in closing an operator and balancing the drawer. + compare and contrast the operator close out report and daily cash collection report. Follow through with customer on preparing deposit and txans~erring inforn~atian to subsystems. • Assist customear i.n checking subsystems and the transfer effect. T~A~rl~ AT~I~ City staff will be trained as do~nmented ~n the tables bel~v►~. TRA~~N~ DAVE, TIMES ADD L~CAT~~~ List the specific date, times and locations of the cia~ses. 5of5 ~ b i Exhibit D trees Customer Hams: City of Donlan, T7(- Al~nicipai CouR C4[1taCt: K$Y~1 Gunn . ~ . ~ ~ nay: r~nua a, soy a ~ ~ Salesman: Lee Nti¢kYf investment Summa antract f>Q # ; 2009-Q15Z Prepared for: City of Deutan,'~[ - INunici~al Court Contact Persnn: K~e1vi~❑n+ Gunn ssue Date: 11410 14~cfdress; ~Lfl L. Ifl~iSa~ Ds~, 7b205 lesman: L. Midkif'ff 1'haue: X940} 349-8595 J. )Driver Fax: (940) 349-8533 Email: kevin r}n citvr~fdemm~.cam ~i )~arempt: Ye8lfVa Total Hardware ~ System Saftwrare 2,281,25 6,843.75 9,125.04 243.00 Total Applications Software Cleanse Fees 43,01T.50 103,386.00 Z5,846.5Q 172,310,00 43,078,00 Tfltal ProfeSSional S@NiCBS Fiarde SeN~E.`es 9,50D.04 1,500.00 Q~-Site S61viCeS 27,Z5Q.04 27,250.00 Final tmprerraerrtatiar~ 10,000.04 10,000.04 Pr'o1ec~ ManaOement 15,OOQ.04 15,400.04 Project Cor~su~ing 4,000.04 4,404.00 ~afa Caraversion ~ ASSiSt&race 19,040.00 19,000.04 iruco~ sr~ent center 3,saa.~a Please Nye: Trcr~e! expenses wijl be ~i~~ed ds t~acurred 1. License Fees - CLIEI~IT will p$y #o COMPANY an initiat deposit upon execution of this Agreement that equals 2596 of the total License lee as shown above. CLIENT yviEi pay a second installment equal #a 6096 as shown above ups delivery of software. CLIENT she€l pay a fines installment equal to 1596 as sham above upon receipt of "Certi~icatior~ of Gorr~pletian" as defined elsewhere in this agreement. All invoices received by CUE~IT shall be due and payable within 30 days of receipt. 2. Services shall be billed as delivered. COMPANY shall invoice CLIENT once per month and include all services applicable to that period. lnvaioes received by CL1EN'C Shall be due and payable within 30 days of receipt. 3. Hardware • CLIENT will pay to COMPANY an initial deposit equal to 2596 of the tote! hardware being ordered under fhis contract, CLIENT will pay a second installment equal to T596 of the total hardware included in this egr~eernent upon receipt of said hardware from COMPANY. 4. Saftuvare Maintenance -The annual amount will became due the first of the month fallawang six months after ~e installation of the COMPANY software. 5. 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J.. 4........Y......,,.~ E ~ ~ ~ ~ ! s~. , ~ w . ~ ~ : i 3 ~ LL :r CC ~ _ t i ~ "C t i'e 'rC (L :K ~ ! :r 'C :S ~ ~ ~ ~ i~L Lr. !U~. i~ iLL 'Y~. ;k ~ ~ ' i ~ 'LL :ILL ~ ~ ~ i • b A P o O d 'Q O~ ~r..'~...p Tfi. ~O..4 :o O p p Q O o Q P 0.. 0 4..'b b 8 ~O SO O 6 b b EI ',O 'a b . ~ w .w v o :a ,a o .a :c .o I~ .P :a ; i ~ _ ~ ~ ~ .q :c s . ! . i I ~ ~ ~ ~ _ 'o ~ ~ w $ k ~ : ~ : , ~ ~ ~ $ o ~ ~ ~ ~ ~ ~ , ""':oJ w h 4'1 Y YI N r! :Y M 'r 4V 17 • i7f ~ °r~ 'A h tv e~ Y ur rY N N 'M M ~ .N e ~ I ..+.~-}-`gyp a i ~ ,A i 3 3 1 i~ ~ f ~ I 1 I ~ iM1 ~ I ~ 1 } E ~ iQ+ sA R ~ k~ i V~ iip l E~HI~IT F The Date onerion roe Rurpo~e one of the mast difficult aspects of software transition revolves around data conversion. This process takes place in one of two ways: 1. The manual method ~ In the manual made the Client enters data from the existing system into the new Tyler Technolagy system The automated method - in the automated rode a software program is written ar coded in order to facilitate moving information from the existing system to the new Tyler Technology system . This document is provided to aid the Client in understanding the automated conversion process and provide clear direction as to the responsibility and the scope of the process. ~Nho should reed this document? The obvious answer to this question is the individual at the Client site that is most responsible far the transition. specifically it should be: The individual responsible far extracting and providing data from the aid system to the Tyler Technolagy system, Any individuals responsible at a department level. . Any individual that would benefit Pram understanding the conversion process The onverion Rroces The process itself has a predefined set of steps that must take place far a successful conversion. 1. Initial data extraction -The Client must perform the preliminary extraction and transmission of data including supporting documentation reports andJar print screens}, trial balances, aging reports at the tirr~e the data is extracted to assist in the data evaluation. Data Evaluation -Tyler Technologies will then be responsible far evaluating the information that has been transmitted, span a successful evaluation the client will be contacted far further scheduling, 3. onversian scheduling - Cnce a schedule has been decided upon, Tyler Technologies will proceed in development of the conversion prograrr~s, During the development step, the Client will be responsible far providing knowledge and insight into the information frarn their current system 4. Cn-bite Conversion -Upon Tyler Technology's arrival at the client`s site for the conversion, the Client will be responsible for a final extraction of the dataF In mast situations the Client will not have to transmit the final extraction to Tyler Technologies. The Tyler Technolagy trainer an site will assist the Client in preliminary INCCDE application setup that is required for the conversion as well as execute the conversion programs and assist in the verification of the converted information's integrity. Even though the Tyler Technolagy trainers possess a great deal of knowledge in the area of conversion, it is ultimately the Client's responsibility to validate any converted data. The sections that follow clearly outline and describe each of the above steps. Data Extraction and Tran~miion of Data As stated in the contract, the Client must supply data in A~II, Excel, Access, L, Foxpro, Paradox or other standard P format with unpacked data fields and record layouts or field na~nesF File Description and layout The contract further states that the Client must supply sufficient file descriptions and layout information for the data. Sometimes file descriptions will be referenced as data definitions Normally data files have one raw after anotherF Each row represents a record ar grouping of I information As an example, a vendor file would normally have a row for each vendor in the system The rows then have to be broken dawn further into columns or fields An example of a field in the vendor file could be vendor name. The file description provides the infarrnation needed to knave exactly what position each field starts and stops in each raw In all cases, fle descriptions are absolutely necessary far any tYPe of conversion. ~l~dia Type Tyler will accept CD, DIID or 4mm tape, However the preferred transfer methodology is via ftp site or direct Connection to Client's system, Final Data Extraction The final data extraction will be performed an the day of ar a day very close to the final conversion. This extraction gill be coordinated with Tyler Technology's conversion personnel and irriplementatian coordinator. Data Extraction A~itanc~ In almost all instances the Client owns its data, but the current software provider's file descriptions will be Considered proprietary information, There will be scenarios where the software provider will not provide file descriptions or will provide the descriptions for a fee. Any fees required by the vender are the responsibility of the Client and are not included in the contract. In many situations the data will have proprietary fields with na easy solution for extraction. Tyler Technology's years of experience with data conversions has lead to many innovative techniques far data extraction, When the Client has exhausted their available options, Tyler Technologies can assist with the data extraction far additional fees. The Client will have the responsibility of Contacting their sales representative far a quote for additional services Upon receipt of a purchase order from the Client, Tyler Technologies will proceed with this assistance. ~onv~rsion ch~du~ling once Tyler Te~hnalagies has received the data frarn the Client a three stage evaluation process will be implemented l~ledia will be evaluated as to its readability. Each data file transmitted will be reviewed as to its format, file description, and estimated complexity, 1Nhen these two stages have been successfully completed, Tyler Technology's implementation coordinator will schedule with the Client a time far the data Conversion, conversion assistance, and training, The third stage of the evaluation is mare detailed and will fallow in approximately 3 weeks. During this stage the data will be evaluated for its completeness, validity, and mandatary fields needed in the conversion. If problems arise during this process, Tyler Technologies will communicate to the Client the problems. The Client will be responsible far resolving the problems in a timely a manner as passible so that the schedule is not afFected~ If na problems arise then the Client can assume that TylerTechnalagies is on schedule. Timing is an important element during a data conversion. scheduling of the conversion will revalue around the most advantageous Cutoff dates. For exemplar if a Client bills their utility Customers at the end of each manthr the nest ti~re to da the Conversion would be during the last two weeks of the month. Financial Conversions will be easier to validate if performed after a period has been closed. All of these elements will be discussed by the implementation Coordinator with the Client during scheduling. Conversion Program ~e~r~lop~ent After Tyler Technologies receives and validates the Client's data, the development of the conversion program veil! begin. During the development process, questions about the Clientrs Current data or application may be raised. The Client is responsible far providing contact infarrnation for staff members} that are capable of responding to questions for each rr►adule being converted. I It is important for the Client to understand that Tyler Technologies has a minimal amount of experience with the Client's current application. ~uestians raised by Tyler Technologies will be the result of analysing data. There are a significant number of times when the data being analyzed does riot correspond with the information that the Client views an the screen in their current application, Providing staff members that have an in depth knowledge of the Client's current application is a key element of a successful conversion, Part of the develaprnent process will be testing the program with the data provided in the first extraction. This testing will take place at Tyler Technology's facilities, Any potential problem areas will be communicated to the Client, conversion As~~t~ nee As part of the contract, a Tyler Technology`s trainer will be at the Client location during the actual conversion. Tie trainer will provide conversion assistance in the areas of preliminary setup, conversion progrenn execution and data validation. Even though the primary focus of the trainer is a successful completion of the conversion process, the trainer will be providing a lirnited amount of training in certain areas. In a majority of cases, the trainer responsible far the canversian assistance will also be responsible for the training that will occur either before or after the convers~an, Yt is important to Hate that the trainer will not be the programmer responsible for the creating ar madifying canversian program. The trainer will be responsible for conveying to the programmer discovery of client specific information before the final canversian and any mistakes found aver the canversian, The Client will need to facilitate the trainer by providing a comfortable place to wgrk, eccess to facilities before and after normal warn hours and telephone communications. I]ata V~iida~ivn The final step in the conversion process is the data validation, Much attention will be given to data integrity during the testing phase by the program developers. The conversion assistant will also spend time testing the integrity of the infarmatian. Balances and the output of processes will be tested after the conversion. A visual inspection of different rr~adules will be performed by choosing different records an a random base. But Data validation is ultimately the respans~bility of the Client. i ~~hib~t Annual Software IVIalntenance Agreement Summary for licensing and support Scope of Agreement. The CLIENT services of the software products in agrees to purchase and C~1vIPANY accordance with the payment provisions agrees to provide services for the set forth in Section l.l. software products listed in the Additional Charges. Any Investment Summary of this maintenance performed by C~IVIPANY Agreement in accordance with the for the CLIENT, which is not covered following terms and conditions. Bath by this Annual So~ware Maintenance parties acknowledge that this Annual Agreement, will be charged at Software Maintenance Agreement CCMPANY's then current market rates. covers both support for the software All materials supplied in connection products listed in the Investment with such non~covered maintenance or Summary of this Agreement and support plus expenses will be charged to licensing of updates of such installed CLIENT. software products, ~c} Suppork and services will be Term of Agreement, This Annual suspended whenever CLIENT"s account Software Maintenance Agreement is is thirty X30} calendar days overdue and effective on the date executed by an shall be reinstated when CLIENT'S officer of C~IIrIFANY and shall have a account is made current. term beginning upon the first of the 4. Licensing of updates, releases, and month six months after the ~nstallatlon l~ew~ ~ersio~ns of the Ynstalled of the C~MPAN~ software and ending Software Products. upon the last day of the month one year ~a} In consideration for the payment of fallowing that date. the annual maintenance fees, CLIENT'S ~a~ This Annual Software license of the COPAN~''S installed Maintenance Agreement will software products set forth in the automatically renew far subsequent one Investment Summary shall be extended year terms unless either party gives the to include any and all updates, releases, other party at least thirty days prior andlor new versions of the installed written notice of its intent not to renew software products delivered to CLIENT prior to the expiration of the then under this Annual Software current term. Fees far subsequent years Maintenance Agreement, subject to the are subject to change. terms, conditions, and restrictions set fib} If Cf,IENT has not elected to forth in Section 2.1 of the Sot~ware participate in the COMPANY Annual License Agreement. Software Maintenance Agreement, or fib} li or as long as a current Annual elects not to xenew the Annual Softwware Software Maintenance Agreement is in Maintenance Agreement, the CLIENT place, COMPANY shall promptly shall acquire Software maintenance in correct any functions of the software accordance to the section entitled products which fall to substantially "Support Terra far CLIENTS Not comply with COPAN~''s current Participating in the ,Annual Software specifications for the rr~ost current Maintenance Agreement version of the software products. If 3. Payment, CLIENT has made modifications to the ~a} CLIENT agrees to pay COMPANY software products, COMPANY will not the amount identified in the Investment make such corrections, unless 1 I modifications were specifically expenses. CO~I~A~' ernp~oys ~ra~y authorized in writing by COMPANY. L'P~4s b~~ is got a ~~ard re~s~red {c} COMPANY reserves the right to fir change the functionality of future COMPANY Shall provide CLIENT releases of its software and CLIENT with remote support through the use of understands that COMPANY is not secure connection over the Internet obligated to include speciftc connection via C~trix GatoAsiSt. If functionality in future releases unless CLIENT will not allow access through provided for herein. OotoAsSist, COMPANY cannot 5. Terms and Condition far Support. guarantee support standards will be rnet. {a~ COMPANY shall provide software G. Support Terms for ~L~ENTs fat related CLIENT support during standard Participating ~n tb~e Annual Software support hours. Currently, standard 1V~aintena~nce Agreement. The support hours are from 7:~Oam to Software License Agreement includes six 7;ODpm, Central Standard Time, months free maintenance. If CLIENT Monday thru Friday, excluding elects not to participate in the holidays. COMPANY reserves the right COMPANY Annual Software to modify these support hours as Maintenance Agreement, CLIENT shall COMPANY sees fit in order to better receive support on a Time and Materials serve its entire client base. Assistance basis following six months after the and support requests which require COMPANY Software is installed in special assistance from COMPANY'S accordance with the following terms: development group will be taken and {a} CLIENTS not on Software Support directed by support personnel. Maintenance will receive the lowest {b} COMPANY will maintain staff that priority for Software Support. is appropriately trained to be familiar {b} CLrEN~'s not vn Software Support with the software products in order to Maintenance will be required to render assistance, Should it be required. purchase new releases of the Software. {c~ COMPANY will provide CLIENT New Releases will include f xes, with all updates that COMPANY rriay enhancements and updates, such as, Tax make to the then current version of the Tables, wl2 reporting formats, 109 installed software products covered in changes, etc. this Agreement, CLIENT agrees to {c} CLIENTS not on Software Support install such updates promptly after Maintenance well be charged $175 per receipt, hour with cone-hour minimum for all {d} CLIENT acknowledges that the software Support calls. updateslenhancements may not be {d} CLIENTS not on Software Support compatible with CLIENT'S particular Maintenance will not be granted access hardware con~igurativn or operating to COMPANY'S software Support web- ystern. CLIENT acknowledges that site. additional hardware and software nay {e} CLIENTS riot on Software Support be required at the CLIENT'S expense in Maintenance are subject to higher rates order to utilize the for training and continuing education updates~enhancernents. performed by COMPANY employees. {e} COMPANY will make available This is due to the fact that the CLIENT appropriately trained personnel to may not be utilizing the most current provide CLIENT additional training, version of our software. program changes, analysis, consultation, {I} COMPANY will not guarantee a recovery of data, conversion, non- program fix to a documented bug for coverage maintenance service, etc., Software verszonS that are not the billable at the current per dierri rate plus currently released version. Because I every CLIENT is on of~ware support ~a} Support service does not include the Maintenance, ofken times, bug fixes are installation of the software products, rolled into the latest release and then onsite support, application design, and sites are upgraded to the latest release of other consulting services, support of an the soware, operating system or hardware, or any fig} If a CLIENT decides to discontinue support requested outside of standard Software support Maintenance and later support hours. chooses to reinstate Software Support fib} CLIENT shall be responsible far Maintenance, the CLIENT wi11 be implementing, at its expense, all required to pay the portion of annual changes to the current version. CLIENT saffware support maintenance fees for understands that changes furnished by the Enhancement and Sv~ware Updates COMPANY for the current version are {2~"°Io} dating back to the date when the for implementation in the current CLIENT discontinued Soffware Support installed soffware products version, as it Maintenance. exists without customization or CLIENT 7, Additional Services. The services alteration. listed below are not included in the ~c} rf CLIENT has made modifications ' COMPANY Software Maintenance to the software products, COMPANY Agreement. These services shall be will not support the modified saflrware provided at COMPANY'S discretion and products, unless modifications were will be billed on a Time and Materials specifically authorized in writing by basis at COMPANY'S then current rates: COMPANY. ~a} Changes to print programs; 9. CLIENT ~esponsihilitres. fib} Saflrware modifications; ~a} CLIENT skull provide, at no charge ~c} Sofl<ware Training; to C~MPAN'Y, full and free access to ~d} Responding to problems caused by the sofkware programs covered bad data; hereunder, including the following: fie} Responding to problems caused by working space; adequate facilities hardware; within a reasonable distance from the ~f} Responding to problems caused by equipment; and use of machir~eS, operator error; attachments, features ar other fig} Responding to problems caused by equipment necessary to provide the sofkware that is not COMPANY specified support and maintenance soflrv~are; service. Such environment includes, but ~h} Responding to problems resulting is not limited to, use of the appropriate from misuse, accidents, CLIENT operating system at the version and neglect, fire, or any other cause not release levels specified by COMI?ANY within COMPANY'S reasonable control; and additionally specifies that the ~i} Changes made to the COMPANY environment far any C~MPAN~Y affware by someone other than software application requires the COMPANY personnel; and CLIENT to have a-mail and Internet Any other services performed by access. CLIENT will be responsible for C~MI~ANY not otherwise specifically all additional costs incurred to the extent provided for in this Agreement, including such hardware and Soflwarc does not but not limited to, bank reconciliation, conform to C~MPANY"s current reconciling out of balance reports, specifications. The acquisitions of balancing segments ofthe system, etc. necessary hardware and Software 8. Limitations and Exclusions, The meeting the requirements then in effect support and services of this Annual shall be sole responsibility of the oflware Maintenance Agreement do CLIENT, not include the follo~ving: I fib} CLIENT shall maintain a high speed 1. Nan-Assignability. The CLIENT shall intern.et connection ~DSL, Cable, ar not have the right to assign or transfer its faster} and must be able to provide rights hereunder to any party. COMPANY with IP connection to Force ajeure. COMPANY shall not CLII~NT's network through Citrix be responsible for delays in servicing the OotoAssist, VPN, Citrix, ar Microsoft products covered by this Annual Software Terminal services. COMPANY shall Maintenance Agreement caused by strikes, use the connection to assist with lockouts, riots, epidemic, v~ar, government problerrz dlagnosls and resolution. regulations, fire, power failure, acts of hod, COMPANY is not responsible for or other causes beyond its control. purchase of VFN client software license 1.3, governing Law. This Annual Qftware ar configuration of CLIENT'S ~xewall Maintenance Agreement shall be governed settings. If CLIENT will not allow by and construed in accordance with the access through OotaAssist, COMPANY laws of CLI~NT's state of domicile. cannot guarantee support standards will 1~. Entire Agreement be met. a} This Annual Software Maintenance ~c} CLIENT mint maintain an active e- Agreement represents the entire agreement mail address capable of receiving a 5 of CLIENT and COMPANY with respect to MB attachment. This e-mail account the maintenance of the software products must be accessible from a PC connected and supersedes any prior agreements, to the server hosting the COMPANY understandings and representations, whether software applications. written, oral, expressed, implied, or ~d} CLIENT must open fireall ports to statutory. CLIIINT hereby acknowledges enable access to COMPANY'S FTP that in entering into this agreement it did not server for program updates via Live rely on any representations or warranties ' Update. other than those explicitly set forth in this fie} CLIENT 1S responsible for reading Annual Software Maintenance Agreement. and complying with COMPANY'S b} If any term or provllon of this Systerr~s Requirements. Agreement or the application thereof to any CLIENT is responsible for ensuring person or circumstance shall, to any extent, that data and application backup be invalid or unenforceable, the remainder processing is occurring, as well as, of this Annual Software Maintenance verifying the existence and accuracy of Agreement ar the application of such term the data being backed up. For mission or provision to persons or circumstances critical data, COMPANY highly other than those as to which it is held invalid recommends regularly scheduled off site or unenforceable shall not be affected backup services, s well as, frequent thereby, and each term and provision of this local backups. Annual Software Maintenance Agreement I0. Limitation of Liability. Upon the shall be valid and enforced to the fullest initiation of maintenance and support extent permitted by law. services under this Annual c~ This Annual Software Maintenance Maintenance Agreement, the liability Agreement may only be amended, rnodifed of ~~Al~~', whether based on a or changed by written instrurr~ent signed ley theory of contract ar tart, shall he bath parties. limited to fining defects in accordance d} CLIENT should return an executed copy with the terms herein, and if the of this Agreement to COMPANY. If the C~1Vf'PAN~' cannot ft~ defects, to the Agreement is not returned to COMPANY fees paid by ~LYENT for services within ~D days from the issue date, then such under this Aanuat Software Agreement is subject to be voided and prices Maintenance Agreement; are subject to change. I ORDINANCE N0. AN ORDINANCE ACCEPTING COMPETITIVE BIDS BY WAY OF AN INTERLOCAL COOPERATIVE PURCHASING PROGRAM PARTICIPATION AGREEMENT WITH THE CITY OF CARROLLTON UNDER SECTION 271.102 OF THE LOCAL GOVERNMENT CODE, FOR THE PURCHASE OF INCODE SOFTWARE FOR THE CITY OF DENTON MUNICIPAL COURT; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (FILE 4465-INTERLOCAL AGREEMENT FOR INCODE SOFTWARE FOR MUNICIPAL COURT WITH THE CITY OF CARROLLTON, CONTRACT AWARDED TO TYLER TECHNOLOGIES, INC IN THE AMOUNT OF $258,185). THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Manager, or his designee is hereby authorized to purchase municipal court software in the amount of $258,185 from Tyler Technologies, Inc. under competitive bids received by the City of Carrollton in accordance with an Interlocal Cooperative Purchasing Program Participation Agreement under Section 271.102 of the Local Government Code which is on file in the office of the Purchasing Agent. SECTION 2. The City Manager, or his designee is authorized to expend funds pursuant to the agreement for the purchase of various goods and services. SECTION 3. This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2010. MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY 5 BY: 3-ORD-File 4465 AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Herman Lawson349-7755 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance accepting competitive bids and awarding a public works contract for the construction of a covered parking structure for Denton Municipal Electric; providing for the expenditure of funds therefor; and providing an effective date (Bid 4430- awarded to the lowest responsible bidder meeting specification, Links Construction, LLC, in the amount of $331,700). The Public Utilities Board recommends approval (5-0). BID INFORMATION This bid is for the construction of a covered parking structure with storage at the Denton Municipal Electric's (DME) pole yard. DME currently has six large bucket trucks and four line trucks. The units are utilized to work on energized conductors, set poles, hang transformers, and numerous other safety sensitive jobs. The bucket truck booms consist of steel and high strength fiberglass. The fiberglass acts as an insulator to protect employees while they are working on energized conductors. In the case of the line trucks, the third stage is made up of fiberglass and is used when hanging equipment or setting poles in energized lines. The purpose of the covered parking structure is to decrease the amount of exposure these safety sensitive pieces of equipment have to "the elements" when not in use. The large bucket trucks cost approximately $140,000 to $175,000 each to replace and the line trucks cost approximately $185,000 to $300,000 each to replace. A raised loading dock is also included in the bid so that materials that are delivered in an enclosed trailer can be unloaded at the DME site instead of taken to the warehouse to be off loaded. This will save DME the time of taking a trailer to the warehouse, re-loading the material, and bringing it back to the pole yard to unload. DME would also utilize this covered structure to "Stage" material (within a fenced and secured area) for future projects or for when material has to be moved from one project to another due to the weather, priorities changing, or customer coordination conflicts. PRIOR ACTION/REVIEW (Council, Boards, Commissions) This item was approved by the Public Utilities Board on January 25, 2010. RECOMMENDATION Award to Links Construction, LLC in the amount of $331,700. Agenda Information Sheet February 16, 2010 Page 2 PRINCIPAL PLACE OF BUSINESS Links Construction, LLC Denton, TX ESTIMATED SCHEDULE OF PROJECT This project is estimated to be completed within 60 calendar days from notice to proceed. FISCAL INFORMATION This project will be funded from account 602190496.13 60.3 610. Requisition 973 51 has been entered in the Purchasing software system. EXHIBITS Exhibit 1: Bid Tabulation Respectfully submitted: . 1 Tom Shaw, C.P.M., 349-7100 Purchasing Agent 1-AIS-Bid 4430 4-'a o 00 ~ ~ ~ ~ W W W W Q ~ ~ ~ ~ ~ ~ ~ ~ o ~ O ~ H ~ ~ N ~ ~ ~ U1 C/~ C/1 U1 Q ~ ~ ~ ~o ~ ~ ~ ~ ~ ~ ~ ~ r--a H ~ Q ~ ~ ~ 0 ~U ~ o ~ ~ ~ ~ ti • ~ ~ N C/1 C/~ C/1 t/1 ~ ~ ~ ~ ~ N ~ ~ ~ o ~ ~ ~ ~ ~ N ~ ~ 0 o Q ~ U 0 ~C o ~ o ~ V U ~ 00 U1 C/~ C/1 V1 ~ v ~ ~ ~ ~ ~ ~ Q ~ U o ~ ~ ~ U Q ~ W ~ ~ o ~ .o ~ o v ~ a ~ ~ ~ ~ ~ ~ A a ~ ~ ~ ~ M ~ ° A ~ U 0 U ~ o ~ ~ o ~ ~ o oo~ W W W W Q ~ ~ o~W ~ o; ~ ~ ~ ~ N ~ U ~ ~ ~ Q U w W ~ o o ~ o ~ o ~ ~ ~ ~ ~ W W W W Q V v ~ ~ ~ ~ ~ ~ N ~ ~ ~ ~ U Q ~ ~ ~ U ~ Q Z ~ ~ ~ N M ~ o ~ W ~ ~ ~ ~ o ~ ~ ~ ~ ~ a o r Q o ~ ~ ~ ~ ~ °a ~ ~ M~ 0 A a H ~ ~ r W a~ 0 ~ ~ , , ~ ~ o ~ U 0 a ~ ~ ~ ~ . ~ ~ N M ~ N ~ mnr~ ~ I I I I I I I w+ I ORDINANCE N0. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A PUBLIC WORKS CONTRACT FOR THE CONSTRUCTION OF A COVERED PARKING STRUCTURE FOR DENTON MUNICIPAL ELECTRIC; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (BID 4430-AWARDED TO THE LOWEST RESPONSIBLE BIDDER MEETING SPECIFICATION, LINKS CONSTRUCTION, LLC, IN THE AMOUNT OF $331,700). WHEREAS, the City has solicited, received and tabulated competitive bids for the construction of public works or improvements in accordance with the procedures of State law and City ordinances; and WHEREAS, the City Manager or a designated employee has received and recommended that the herein described bids are the lowest responsible bids for the construction of the public works or improvements described in the bid invitation, bid proposals and plans and specifications therein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The following competitive bids for the construction of public works or improvements, as described in the "Bid Invitations", "Bid Proposals" or plans and specifications on file in the Office of the City's Purchasing Agent filed according to the bid number assigned hereto, are hereby accepted and approved as being the lowest responsible bids: BID NUMBER CONTRACTOR AMOUNT 4430 Links Construction, LLC $331,700 SECTION 2. The acceptance and approval of the above competitive bids shall not constitute a contract between the City and the person submitting the bid for construction of such public works or improvements herein accepted and approved, until such person shall comply with all requirements specified in the Notice to Bidders including the timely execution of a written contract and furnishing of performance and payment bonds, and insurance certificate after notification of the award of the bid. SECTION 3. The City Manager is hereby authorized to execute all necessary written contracts for the performance of the construction of the public works or improvements in accordance with the bids accepted and approved herein, provided that such contracts are made in accordance with the Notice to Bidders and Bid Proposals, and documents relating thereto specifying the terms, conditions, plans and specifications, standards, quantities and specified sums contained therein. SECTION 4. Upon acceptance and approval of the above competitive bids and the execution of contracts for the public works and improvements as authorized herein, the City Council hereby authorizes the expenditure of funds in the manner and in the amount as specified in such approved bids and authorized contracts executed pursuant thereto. SECTION 5. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of ,201 0. MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: 3-ORD-Bid 4430 i I i i DRAFT MINUTES PUBLIC UTILITIES BOARD January 25, 2010 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was present, the Chair of the Public Utilities Board thereafter convened into an open meeting on Monday, January 25, 2010 at 9:02.m. in the Service Center Training Room, City of Denton Service Center, 901-A Texas Street, Denton, Texas. Present: Chair Dick Smith, Bill Cheek, Phil Gallivan, Bill Grubbs and Barbara Russell Ex Officio Members: George C. Campbell, City Manager Howard Martin, ACM Utilities Absent: John Baines and Randy Robinson, both excused CONSENT AGENDA: The Public Utilities Board has received background information, staff's recommendations, and has had an opportunity to raise questions regarding these items prior to consideration. 3) Consider recommending approval of Bid #4430 for award of a contract for construction of a Covered Parking Structure to Links Construction in the estimated expenditure amount of $331,700.00. Board Member Russell moved to approve Item 3 with a second from Board Member Grubbs. The motion was approved by a 5-0 vote. The meeting was adjourned by consensus at 9:54 a.m. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Frank Payne 349-8946 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance accepting competitive bids and awarding a public works contract for the construction of a 42-inch water transmission main from Scripture Street north along Bonnie Brae to West Windsor Drive and over to Loop 288; providing for the expenditure of funds therefor; and providing an effective date (Bid 4466-awarded to the lowest responsible bidder meeting specification, SJ Louis Construction of Texas, LTD in the amount of $4,670,710). The Public Utilities Board recommends approval (7-0). BID INFORMATION The North-South 42-inch Water Transmission Main project consists mainly of the construction of a new 42" diameter water transmission pipeline which will expand the capacity of the City's water distribution system to the western and southwestern sections of the city. The project is required to handle the increased water demand seen in the distribution system created by recent growth and to accommodate future growth. The new line is designed to handle projected peak demand rates up through the ultimate buildout condition. PRIOR ACTION/REVIEW (Council, Boards, Commissions) This item was approved by the Public Utilities Board on February 8, 2010. RECOMMENDATION Award to SJ Louis Construction of Texas, LTD in the amount of $4,670,710. PRINCIPAL PLACE OF BUSINESS SJ Louis Construction of Texas, LTD Mansfield, TX ESTIMATED SCHEDULE OF PROJECT This project is scheduled to begin April 2010 with an estimated completion date of June 2010. Agenda Information Sheet February 16, 2010 Page 2 FISCAL INFORMATION This project will be funded from account 630160519.1360.40100. Requisition 97526 has been entered in the Purchasing software system. EXHIBITS Exhibit 1: Bid Tabulation Respectfully submitted: . 1 Tom Shaw, C.P.M., 349-7100 Purchasing Agent 1-AIS-Bid 4466 ~ ~ °o °o ~ ~ °o °o °o ~ • ~ ~ ~ O ~ p N N N 0 N U ~ ~ ~ ~ (n (n (n 0 ~ ~ N ~ In In ~ ~ ~ o ~ O m W W W ~ p p W W W L I` N z ~ = p C ~ O ~ U ° ~ ~i U U N c~ ~ ~ ~ ~ ~ ~ ~ o o o 0 o o c~ o 0 ~o ~ ~ ~i ~i ~ ~i ~i ~ a ~ ~ ~ ~ ~ ~ ~ ~ ~ m ~ ~ ~ ~ ~ ~ ci ~ a~`o ~ m ~ ~ ~ ~ v o c~ ° w w w c~ ~i p w w w ~ C~ ~ ~ M ~ z ~ ~ ~ ~ p ~ ° rn O z ~ ~ ~ N d7 ~ ~ p N ~ O ~ r In O N In U ~ ~ ~ U m ~ ~ vi ~ °o °o ~ ~ °o °o 0 o ~ ~ ~ ~ ~ o U~ ~ °o °o ~ ~ ~ ~j O O m N ~ L O In m ~ y m + ~ t6 O ~ O ~ ~ ~ ~ ~ N O ~ ~ p ~ ~ ~ ~ U d7 z ~ - ~ ~ 00 C4 z ° ~ (D ~ V O ~ In U ~ ~ ~ U J {f} b~} ~ {f} {f} ~ ~ O O ~ O O ~ O O to ~ O O ~ N ~ I` O ~ O - ~ In In ~ U • ~ o ~ N c~ m cn cn cn ao 0o m cn cn cn w ~ N U t~ ~ 00 ° W W W ~ ~ W ~ N N p W W W ~ ~ c~ ~ o0 o z ~ ~ ~ ~ p N o o z ~ ~ ~ ~ ° ~ ~ ~ ~ ~ p m ~ o ~ N ~n v ~ ~ ~ ~ _ O p ~ °o °o °o ~ ~ °o °o ~ _ 0 J ~ t0 r r O L U= N ~ ~ = y J i ~ ~ t0 O N ~ ~ ~ ~ >L N ~ N ~ p ~ ~ ~ 0 ~ ~ N ~ ~ t0 t0 00 ~ > C U Q ~ N z y N ~ ~ ~ ~ ~ ~ U c~ N ~i V N ~ N ~ N = N N N N L t6 t6 t6 (6 y L ~ y ~ ~ L ~ ~ ~ ~ ~ ~ ~ ~ Q Q ~ Q Q ~ ~ ~ p ~ o 0 o p ~ 0 0 0 ~ c~ c~ c~ ~ c~ c~ c~ ~ ~ ~ N N N ~ ~ N ~ N O N W ~ W c~ A a~~~ ~ N A a~~~ ~ N 0 s m m m m m m CON c°n N c°n ~ ~ ~ c°n c°n c°n ~ ~ CO ~ ~ ~ c~ c~ c~ ~ ~ ~ ~ ca ca c~ ~ ~ ~ ~ N 0 m m m p ~ ~ 00 00 00 p ~ ~ ~ ~ a ~ ~ ~ m ~ ~ a ~ ~a ~ 00 ~ ~ ~ W ~ ~ ~ ~ m ~ ~ ~ ~ ~ m ~ ~ Q~ L Q Q Q Q m n 7 7 ~ N m ~ ~ l0 ~ ~ N m ~ u1 lD ORDINANCE N0. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A PUBLIC WORKS CONTRACT FOR THE CONSTRUCTION OF A 42-INCH WATER TRANSMISSION MAIN FROM SCRIPTURE STREET NORTH ALONG BONNIE BRAE TO WEST WINDSOR DRIVE AND OVER TO LOOP 288; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (BID 4466-AWARDED TO THE LOWEST RESPONSIBLE BIDDER MEETING SPECIFICATION, SJ LOUIS CONSTRUCTION OF TEXAS, LTD IN THE AMOUNT OF $4,670,710). WHEREAS, the City has solicited, received and tabulated competitive bids for the construction of public works or improvements in accordance with the procedures of State law and City ordinances; and WHEREAS, the City Manager or a designated employee has received and recommended that the herein described bids are the lowest responsible bids for the construction of the public works or improvements described in the bid invitation, bid proposals and plans and specifications therein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The following competitive bids for the construction of public works or improvements, as described in the "Bid Invitations", "Bid Proposals" or plans and specifications on file in the Office of the City's Purchasing Agent filed according to the bid number assigned hereto, are hereby accepted and approved as being the lowest responsible bids: BID NUMBER CONTRACTOR AMOUNT 4466 SJ Louis Construction of Texas, LTD $4,670,710 SECTION 2. The acceptance and approval of the above competitive bids shall not constitute a contract between the City and the person submitting the bid for construction of such public works or improvements herein accepted and approved, until such person shall comply with all requirements specified in the Notice to Bidders including the timely execution of a written contract and furnishing of performance and payment bonds, and insurance certificate after notification of the award of the bid. SECTION 3. The City Manager is hereby authorized to execute all necessary written contracts for the performance of the construction of the public works or improvements in accordance with the bids accepted and approved herein, provided that such contracts are made in accordance with the Notice to Bidders and Bid Proposals, and documents relating thereto specifying the terms, conditions, plans and specifications, standards, quantities and specified sums contained therein. SECTION 4. Upon acceptance and approval of the above competitive bids and the execution of contracts for the public works and improvements as authorized herein, the City Council hereby authorizes the expenditure of funds in the manner and in the amount as specified in such approved bids and authorized contracts executed pursuant thereto. SECTION 5. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of 2010. MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: 3-ORD-Bid 4466 1 DRAFT MINUTES 2 PUBLIC UTILITIES BOARD 3 February 8, 2010 4 5 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was 6 present, the Chair of the Public Utilities Board thereafter convened into an Open meeting on 7 Monday, February 8, 2010 at 9:00 a.m. in the Service Center Training Room, City of Denton 8 Service Center, 901-A Texas Street, Denton, Texas. 9 10 Present: Chair Dick Smith, Bill Cheek, Phil Gallivan, John Baines, Randy Robinson, Bill 11 Grubbs and Barbara Russell 12 13 Ex Officio Members: 14 George C. Campbell, City Manager 15 Howard Martin, ACM Ut111t1eS 16 17 OPEN MEETING: 18 19 CONSENT AGENDA: 20 The Public Utilities Board has received background information, staff's recommendations, and 21 has had an opportunity to raise questions regarding these items prior to consideration. 22 23 Board Member John Baines pulled Item 2 for individual consideration. 24 25 ITEMS FOR INDIVIDUAL CONSIDERATION: 26 27 2) Consider recommending approval of Bid No. 4466 to SJ Louis Construction of Texas, LTD 28 for the construction of the North-South 42-inch Water Transmission Main project, in an 29 amount not to exceed $4,670,710. 30 31 Board Member Baines asked with this proj ect is due to demand or age. Payne replied it is to 32 extend the water system south into the west side of the city and this is the first step. ACM 33 Martin stated that this project will connect to the Roselawn elevated storage tank and its 34 associated water line. Martin added that in 2008 as part of the impact fee update staff looked at 35 how to provide water to the southwest part of the service area by bringing water from the Ray 36 Roberts plant and this is the first phase of that major water transmission line. 37 3 8 Chair Smith asked that between the bar-wrapped concrete steel cylinder pipes or mortar coated 39 steel pipe which is preferred. Payne stated that the engineering staff has been equally happy 40 with either and that the bid process was setup to allow the contractors to bid either or both and 41 there were tow that actually bid both. 42 43 Smith then asked the reason for the difference in the engineer's cost estimate of $7.5 million 44 and the bids which came in at $4.6 million. Payne replied bidders were nervous about the 45 quantity of rock and if one looked at estimates before the bid opening one would find that the Draft Minutes of the Public Utilities Board meeting February 8, 2010 Page 2 of 2 1 bidders bumped up the unit prices on the pipe to cover rock excavation in order to still have 2 some contingency money in the project. 3 4 Board Member Baines asked if the price is too low. Payne replied no and that it is a good 5 competitive bid when five or six bid around the same number. 6 7 Board Member Russell moved to approve Item 2 with a second from Board Member 8 Robinson. The motion was approved by a 7-0 vote. 9 10 The meeting was adj ourned by consensus at 11:3 0 a.m. 11 This page left blank intentionally. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: DENTGN MUNICPAL JUDGE'S OFFICE CMI ACM: Robin A. Ramsay, Denton Municipal Judge SUBJECT Consider adoption of an ordinance of the City of Denton, Texas, appointing Robin A. Ramsay as Presiding Judge for the City of Denton Municipal Court of Record; establishing term of off ce for the Municipal Judge in accordance with applicable state statutes; providing for renewal and extension of term absent specific action by Council; authorizing the Mayor to execute an employment agreement for term of office; ratifying terms of the employment agreement; ~ and declaring an effective date. BACKGROUND The judicial appointment for a term of office is more a question of legal authority, and is not merely an issue of employment or compensation.. The judicial appointment process under the Denton City Charter, Code of Ordinances and Chapter 30 of the Texas Government Code is intended to address the validity and enforceability of the Court's judgments and orders. While the Presiding Municipal Judge serves at the pleasure of the Council and may be removed during the appointed term, the period of appointment is for a specific two ~2} year period. Under Article VI, Section 6.03 of the Denton City Charter, as well as Article II, Section 19-3~ of the Denton Code of Ordinances, the Presiding Judge shall be appointed in even~numbered years, and the alternate judges appointed inodd-numbered years. While statutory and case law provides for the "automatic re-appointment" of municipal judges once appointed, the Judge's Office has, over the past few years, sought to bring a certain degree of formality and regularity to this process. In March of 2009, this Council addressed this issue and appointed or re-appointed the Presiding Judge and Assistant Judges for the Municipal Court, as provided by ordinance and statute. In as much as this action was taken in 2009 fan odd-numbered year, in order to further coordinate the appointment process of the Presiding Judge with even-numbered years, the Judge's office is asking that the Presiding Judge be re-appointed, by separate ordinance this year, in 2010, and that the Council consider re-appointment in each even-numbered year thereafter. OPTIONS The City Council may appoint any persons they feel are qualif ed and competent to serve in the capacity as Presiding Municipal Judge for the City of Denton Municipal Court, and could continue to do so in regular increments every two years. In the alternative, the Council could rely on provisions of state law that provide for the automatic re-appointment of municipal judges in the event of inaction by the Council serving for consecutive terms occurring after a judge has been legally appointed once. RECOMMENDATION It is the recommendation of the Judge's Office that the Council adopt the proposed ordinance of appointment so as to comply with the Denton City Charter and Code of Ordinances and Chapter 30 of the Government Code, and continue to do so on a bi-annual basis, with the Presiding Judge being appointed in even-numbered years and the Assistant Judges appointed in odd-numbered years. ESTIMATED SCHEDULE OF PROJECT Effective upon appointment and adoption of ordinance. FISCAL INFORMATION The appointment or re-appointment of the Municipal Judge will have no fiscal or financial impact, as there axe no additional costs or additional positions created. Any compensation will be derived from the currently budgeted amounts. BID INFORMATION Not Applicable. Professional Services} E~HLBITS 1- Grdinance of Appointment 2 -Employment Agreement Respectfully submitted: ~i n^ 1/ l r / obin A. Ramsa Presiding M cipal dge Denton Municip, ~ ~ ourt of Record No.l S:lOur Dacumentsl0rdin&t~cces1101Rannsay Cantt~ct Apprdvai.dac ~RDiNANCF N0. NANCY ~F THL CITY ~F DENTIN, TFxA, APpOINTII~C RDBI~i AN ~RDI REII)INC~ JUDCxE FOR THE CITE DF I~ENTDN IVIUNICIFAL COURT RAIVIAY A ~ RD ~ E~TABLIi~IN A TERM ~F QFFICE FAR THE IJNICIFAL JIJD~E IN ~F RLCQ , RDANCE wITH APPLICABLE STATE ~TAT~JTE; PR~VIDIN FAR R~N~wAL ACCQ ETNI~N OF T~RNI ABSENT P~C~`IC ACTION B C~~NCIL; AND IVIA~YDR TO EECI~TL AN ~ EIVIPL~YNIENT AOREEENT FAR AIJTH~I~T~IN THE RNI DF OFFICE ~ RATIF~'IN TERIVI~ OF THE EIVIPL~YENT AR~EIVIENT; AND TE D~CLARIN AN EFFECTIVE DATE. . wi~EREA~ section b . a3 of the Charter of the City of Denton and Chapter I9 of the s finances of the Ci of Denton authorise the City Council to appoint ~ Municipal Cade of Ord reside aver the 'udicial functions of the Municipal Court of Retard for the City of Judge top ~ Denton; and wHEREA~ Cho ter 0 of the Cxavern~aaent Cade, the I~nifor~n Municipal Courts of P Record Act the Act" , ~ ecif~cally section ~~.aaaa~, pravxdes that a governing body shall ~ ~ P a Dint one air more judges to preside aver rnonicipal court of record; and pp ' the Council shall establish two ear terns of offioe; . wHEREA, the Act requires that Y and 'HEREA the Texas Constitution and Chapter ~ of the Local .Caver~nent Code ' that a ~nunici l court 'ud e who i~ not reappointed by the 91~~ day following the provide p J ex iration of a term of office shall, absent action by the appointing authority, continue to serve . p for another term of office beginning on the date the previous term of office expired; and ~VHEREA~ a licabie ort~ons of the City Charter and. Code of Ordrnances prov1de a ~ that the residin 'ud e shalt be appointed in even-nurribered years; New, TI~EREFORE, p gJ g THE COUNCIL F THE CITE ~F DF~T~N HEREBY ORDAIN: ' is hereb a ainted as the Presiding Judge far the SECTION I ~ Rohm A. Ramsay y pP al Court of Record far the City of Dentan, Texas far a two year term of office Mun~cip . . an the da of NXarch, Za1a and continuing through ll~arch ~r~, Za12, or as further begmng y rovided herein. in his capacity as Presiding .lodge, he shall have all duties and powers as p rovided under dec. 30.Ua0~7 of the Texas government Cade. p ECTI~N The City of Denton therefore appoints and designates the aforementioned on as munici al `ud e and rna istrate far and under the laws of the Mate of Texas, with all peas p ~ g g the owers r~ hts and duties of said appointment for a two year tern of aff1ce. As provided p ~ g .Article I of the Texas Constitution anal Chapter 2~ of the Local C~overn~nent Code, said by . rrn of affiee shall be renewed and extended and said Judge shall be reappornted far to S:lO~r Dacumen~slCanitactsl101Ra~say Empinymel~t A,gca~cu~doc TATS ~F TEXAS COUNTY OF DE~'TN § En~ploytnent A cement This Agreement, made and entered into effective the day of , 2a ~ ~ by and between. the City of Denton, Texas, a Texas municipal, corporation, hereinafter called "Employer,'} and Robin A. Ramsay, hereinafter called "Presiding Judge," bath ~ of wham agree as follows wrtnesseth: wI~EREAS, Employer desires to re-appoint and continue the ernployznent of the services of said Rabin A. Ra.say as Presiding Judge of the City of Denton NYunicipal Court; and . wI~EREA~ it is the desire of E.ploycr to ~1}secure and retain the services of Presiding Judge and to provide inducement far him to remain in such employment, to made passible . full work p~aductivity by assuring presiding Judge's morale and peace of mind with respect to future security, and ~3} to act ~a.s a deterrent against malfeasance ar dishonesty for personal gain on the part ofthe presiding Judge; and w~EREA, Presiding Judge desires to accept continued employment as presiding Judge of said City of Denton, Texas ~Ulunicipal Court; and wIREAS, the parties acknowledge that Presiding Judge i a member of the State Bar of Texas ~"State Bar"~ and that Presiding Judge is subject to the Cade of professional Responsibility of the State Bar and shall comply with all conditions and restrictions a set furtl~ . for municipal fudges under all applicable state statutes and as required under the Texas Cade of Judicial Conduct; N~, THEREFORE, in consideration of the mutual covenants herein contained, the parties agree a follov~rs: SECTION 1. DUTIES, Employer hereby engages the ernp~oy.ent services of Rabin A. Ramsay as Presiding Judge of sa~xd Employer to perform the functions and duties specified by the Cade of Judicial Conduct, the Denton City Charter, the City Cade, Chapter a of the Texas avernent Code, the laws of the State of Texas, and all other applicable laws, and to perform other legally Permissible and proper duties and functions as En~player shall from tie to t~~e assign. Such duties include court sessions, workday arraignments, in-house training, office hours, and other services of the 1Vlunicipa.l Court Judge far Statutory 1Vlagistrate~ for the City of Denton. s:lour documentslcontract~ll~lramsay emplo}~ment agreement.~o~ SET~~N Z. TERM. A. Presiding Judge shall be re-appointed for term of t~vo years commencing on March 4, X01 ~ and ending un March , 20 ~ 2. Nothing in this Agreement shall prevent, limit or otherwise interfere with right of employer to terminate the services of Presiding Judge at any time, subject only to the provisions Set forth in Section 4, paragraphs A and B of this Agreement. . Nothing in this Agree.en~ Shall prevent, limit or Qtherise interfere with the right of the Presiding Judge to resign t any t~m.e from h1s posrtlon w~ the Employer, Subject only Io the prov~sron Set forth 1n Section 4, paragraph , of this Agreement. C. Presiding Judge co~.tinue in the duties of Presiding Judge on March 4, 2010, and agrees to remain in the employ of Employer until March 2D ~ 2, and except as provided herein, ~ neither ~o accept other employment nor to become employed by any other erriployer until this Agreement is terminated by either party as provided herein. The term "en~.ployed" shall not be construed to include those outSxde act~v~ties -approved ~n accordance with Section 8 hereof. E'~I~N 3. ~S~JSPENS~~NI~REM~~AL. Subject to the provisions of Section 4 below, Employer may suspend or remove the Presiding Judge with or without full pay and benefits at any time during the term of this Agreement, but only if. A. Employer and Presiding Judge agree; or . At least ~ days before the Suspension or removal shall become effective} the pity council shall by a n~aj ority vote of its .e.bers adopt preliminary resolution stating the reasons for his removal. The reasons for removal shall be ~ accordance with Section 30.00005 of the Texas Government bode, as amended the "Reasons for Removal"~. Presiding Judge nay reply in writing and nay require a hearing at a public meeting of the council, which shall be held not earlier than 20 days nor later than 0 days after the filing of such request. The hearing may be held in executive sesSZOn, at the option of the council, un~esS Presiding Judge requests the hearing be held in open session in accordance with Tex. Gov't bode X551.074. Pending such. hearing, the council may suspend Presiding Judge from duty, but nay not suspend or reduce his salary, After such hearing or public hearing, if one be requested, and offer full consideration, the council by n~aj ority vote may adopt a final resolution of removal or suspension. SECTION 4. SEPARATY~N AND SEVERANCE PAY. A. In the event of his separation s Presiding Judge under Subsection ~.A, he shall be ent~t~ed to receive a tamp sum payment equal to six months aggregated salary. Severance pay is not due for removal under Subsection 3.B. 2 s:l~ur dacumen#~lcantracts1141rams~y e~r~~loyment ~greerrient.do~ B. In the event Presiding fudge voluntarily resigns ~ his position with E.player before expiration of the aforesaid term of his employment, then Presiding Judge shall give Employer 0 days notice in advance, unless the parties otherv~ise agree. SECTION ~AL,AR~. Employer agrees to pay Presiding Judge for his services rendered pursuant hereto an annual base salary of $ I o9,$ 55.03, payable in installments at the same tune as other employees of the employer are paid. A11 provisions of the City Charter, City Code, and Rules and Regulations of the City adopted by the City Council relating to vacation and sick leave, retirement and pension system contribution, holidays, and other fringe benefits and working conditions as they now exist or hereafter nay be amended, shall apply tv Presiding Judge as they would to other employees of the City, which benefits include health insurance, long-term disability insurance, retirement under the Texas 1V~unicipal Retirement System, and other benefits as provided to other Council appointees of the City. E. In addition, Employer agrees to incareas said base salary andlor other benefits of Presiding Judge in such amounts and to such extent as the Council ray determine within the approved budget that it is desirable to do so on the basis of an annual performance review of said Presiding Judge made at the carne tine as similar consideration is given other Council appointees. C. In addition, to the annual base salary the Presiding Judge shall also be paid 1G5 per day . for the perfonnance of magisterial duties for the City of Denton Municipal Jail or other designated detention or folding faczlity for city prisoners, on both ~i} officially designated City of Denton I~olidays, and ~ii~ an Saturdays and Sundays. SECTIOiV . PRF~RMANCE EvALUATI~N. A. The Council shall review and evaluate the performance of the Presiding Judge at least once annually during the time set aside each. year for the performance review of other Council appointees. ~ Said review and evaluation shall be . accordance v~ith speci~i criteria. developed ~ ointly by Presiding Judge and Employer. Said criteria maybe added S to ar deleted frarn as the Council and Presiding Judge shall agree. Annually, the Council and Presiding Judge shall define such goals and performance obi ectives which they determine necessary for the proper operation of the City of Denton ll~unicipal Court, and in the attainment of the Council's policy objectives and shall further establish a relative priority among those various goals and objectives, C. In effecting the provision of this Section, the Council and the Presiding Judge mutually agree to abide by the provisions of applicable law. . SECT~~N 7. H~LT~S wOR~. It is recognized by both Employer and Presiding Judge that the duties of Pres~drng Judge require great deal of ti~.e outside of normal office hours. It is also recognized by the parties that Presiding Judge is required to devote the amount 3 7 s:lour documeratsl~o~tracts1101ramsay ert~plo}Tment agreement.doc of tune and energy necessary to carry out those duties v~rith the highest amount of professlonallsn~ possible, That berg the case, the parties recagni~e that Presiding .lodge nay choose to take personal time off during business hours when it is appropriate and when his duties allow. ~ Although this personal time off is not caniderd vacation, neither i it to be considered as campenstory time for tine spent by Presiding Judge in carrying out his duties outside of normal office hours, as the parties agree that the Presiding Judge must devote the amount of tune necessary to fulfill thane duties. The Council will consider the Presiding Judge's use of personal time off during the performance evaluation. ECTI~N 8. ~LJTfDE ACTI~ITIE~. Presiding Judge is entitled to devote whatever amount of time he feels is appropriate under the circumstances to the pursuit of teaching, counseling, consulting, writing, private practice of law, fudging for other municipal courts, o other non-employer connected business outside of normal business hours of the Employer, . provided that this does not conflict ar interfere with his duties of the of.e of Presiding Judge as required by Chapter of the Texas Government Cade, and provided that Presiding Judge first natives the Council Appointee Performance Review Con~it~ee that he intends to e~.~.e in such activity, ~nclud~ng the amount of true he intends to devote to this actrvlty and his engagement In the activity is approved by the Chair of the Committee. ~CTI~N 9. AUT~M~BE. The Presiding Judge is rewired to be on call for ~4 hour service, so therefore, must have access to a vehicle for City business. En~player shall grant to the Presiding Judge a car allowance of $335 per month for providing such vehicle. The Presiding Judge shall be responsible for the purchase, maintenance, insurance, taxes, etc. far said vehicle. The n~anthly allowance will be considered far increase during the performance evaluation process. The Employer also agrees to reimburse Presiding Judge far mileage far out-of county travel associated with City business at the current IRS rate far mileage reimbursement in accordance with the then current City Travel Reimbursement Policy for City employees with car allowances. a ECTI~N 1 RETIREMENT, Employer agrees to execute all necessary agreements pravi~ed by the International CxtylCounty Management Association -Retirement Corporation ~ICMA-RC} far Presiding Judge's partlc~pat~on 1n said ICMA-RC retirement plans. Employer further agrees to contribute 6°Io of Presiding Judge's annual base salary ~to 1CMA-RC's 47 plan, AlX sums contributed to said plans shall be in addition to Presiding Judge's base salary. Employer also agrees to allow Presiding Judge to contribute whatever porkian of his base salary he may deetn appropri~.te to said plan, including "catchup>' provisions. B. En~player agrees to pay the percentage of the cast of Presiding Judge's participation in the TMR retirement program, ~n accordance v~ith Errxployer's current policy for other execu~.ve-level employees. C. If the Presiding Judge retires pursuant to a qualilied retirement plan; or is permanently disabled during the term of this Agreement, the Presiding Judge shall be con~pensate~. far sic1~ leave, vacation leave, holidays, and other benefits then accrued ar credited to the Presiding Judge in accordance with Employer's current policies for compensation for ~4 s:lour ~~c~rnentslcontractsll0lramsay em~~ayr~ent agreemer~t.doc these benefits, and, at the Presiding Judge' ~ option, shall be permitted to continue to participate in the pity's health insurance plan on the same basis as over retirees from the City are permitted to do so, or, if such other retirees are not permitted to do . o, at the . cost of the Presiding Judge. ETYGN 1 ~ . D~JE; MEM~E~HIP AND UB~PTION. En~playr agrees to budget and to pay for the professional dues, memberships, and subscriptions of Presiding Judge necessary far his continuation of full participation in national, regional state and local _ associations and organisations necessary and desirable far his continued professional participation, growth and advancement as Presiding Judge, and far the good of the Employer in amounts that are approved by the pity ouncxl in the annual budget for the City's Municipal court Judge - Adn7.inistration. . ~CT~GN 1 PR~FE I~NAIf I~E~~OPMENT. employer hereby agrees to budget for and to pay the full travel, paicipatian, and subsistence expenses of Presiding Judge far professional and aff~cial travel, meetings and occasions adequate tv continue the professional development of Presiding Judge, and to adequately puxsue necessary official and other functions for Employer, including such national, regional, state and local groups and committees thereof which Presiding Judge serves s a member in the amounts approved by the City Council in the a~ulual budget for the City's Municipal court Judge ~ Adm.inistratian. SECTION 1. BANDING. Employer shall bear the full cost of any ~ fidelity or athe~ bands that nay be required of the Presiding Judge under any law orordinance. - ECTYGN 14. ~THE~ TEAM AND CGNDITIGN ~F EMPI~~YMEN'~. . A. The City Council, upon recommendation of the Council Appointee Performance review Connnittee and in consultation with the Presiding Judge, shall any such other ternra.s and cond~~ian of enlp~oyrrzent as 1t nay determine from' tlnle to t~.r11e, relatlr~g to the performance of Presiding Judge, provided such. terms and conditions are not inconsistent with or in conflict with the provisions of this Agreement, the City Charter, Chapter 0 of the Texas Government Code, or any other law, and are memorialized by a w~.tten aendn~ent to this Agreement. B. A11 provisions of the City Charter and Code, and regulations and rules of the Employer relating to vacation and s~cl~ leave, retirement and pension system cantrlbutlans, holiday, and other fringe benefits and warping conditions as they now exist or hereafter nay be amended, Asa sha~1 apply to Presiding Judge as they would to other employees of the 5' Employer in. addition to said bene"~ts enumerated ~pecif~cally for the benefit of Presiding Judge. ECTIGN 15, E~]-ERAL PRG~I~GN. A. The text herein shall constitute the entire agreement between the parties. This Agreement shah be binding upon and inure to the benefit of the heirs at law and executors of Presiding Judge. 5 s:yaur dv~umeratslco~txactsli ~~ramsay em~ioerat agreement.doc . . any provision, or an~r portion, thereof, contained in, this Agreement is unconstitutional, in~aiid, or unenforceable, the remainder of this Agreement, ar portion thereof, shall be deon~ed several, shall not be affected ~ shall remain in force ~ and effect. D: The venue of any litigation in~alving i,s Agreement shad be in a court of c~n~petent ~urlsdict~on s~tt~ng In l~entan bounty, ~'e~as. ECTI~N ~ . APP~~PIATI~N. The Employer has appropriated, set aside and encumbered, aid does hereby ppraprfate, set aside, and encumber available and unappropriated funds of the. Glty i~ an amount sufficient to fund and pay all financial obligations of the pity pursuant to this Agreement, including, but not limited to the severance pay, salary and benefits set forth and described herein. IN ITNE IEREOF, the Mayor as duly autl~ori~ed by the pity council and o behalf of the pity of ~cnton, has signed .and executed this Agreement and the Presiding Judge has signed and executed this Agreement, both in duplicate, the day and year first abase Witten. QTY ~F DENTON, T`ExA 11~ART~ A. BT.R~~JCH, M.AY~~ ATTEST: JENN~FE~ ~UA~TE, CITY EETA~Y i APP~~~ED A T~ LE~,A~ FARM. . ANITA BUR~xE, CITY ATT~lNEY 1 F PRE~DIN JE AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Utility Administration ACM: Howard Martin, 349-8232 SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton, Texas approving a renewal of Beneficial Reuse Water Contract by and between the City of Denton, Texas and the Oakmont Management Corp; providing for the City Manager's execution thereof; providing for the expenditure of funds therefor; providing for retroactive ratification and approval thereof; and providing and effective date. The Public Utilities Board recommends approval (5-0). BACKGROUND Compliance with State and Federal environmental regulations and optimal wastewater treatment plant operation have resulted in the production of reclaimed effluent water of a quality, in many cases, better than the streams and reservoirs into which the water is discharged. The effluent quality from the Pecan Creek Wastewater Treatment Plant (PCWWTP) meets the highest standard (Type I) for effluent water. In 1975 an effluent reuse line was installed from the PCWWTP to the Spencer Rd. Power Plant. Historically the reuse program has supplied approximately 0.5 million gallons per day (mgd), in the winter, and approximately 1.0 mgd, in the summer, and has occasionally supplied as much as 3.0 mgd during peak electrical demand periods. Over the last few years we have seen a reduction in the use of effluent at this facility. The older turbines and lower efficiencies of these units have resulted in less electric production at the plant. We would expect this trend to continue unless the City of Garland upgrades the turbines to more efficient units. In the late 1990's increasingly stringent environmental standards for wastewater discharges into receiving streams prompted staff to consider alternatives to discharging of wastewater effluent into Pecan Creek. Reductions of effluent discharges into Pecan Creek and the back water area of Lake Lewisville will improve dissolved oxygen conditions in this critical mixing zone. In the fall of 1999 the Beneficial Reuse Division investigated the feasibility of providing effluent water for irrigation to businesses along Mayhill Road. The division discussed this possibility with potential users south of the wastewater plant. The businesses contacted were very interested in the possibility of using effluent water for irrigation. To provide effluent water to these businesses, it would be necessary to install an 18"pipeline along Mayhill Road. In the fall of 2000, a Letter of Intent for the purchase of reuse water was signed by Oakmont Country Club. Oakmont agreed to a "take-or-pay" contract at a monthly charge of $4,000 for a minimum duration of 5 years. Ina `take or pay' contract, the customer pays a base monthly charge whether effluent water is utilized or not. Oakmont's participation in the proj ect was critical since they were the largest proposed user and would help provide revenues to pay debt service on the installation of a new effluent line. In the spring of 2002, the City of Denton's Field Services Department laid the first section of effluent pipe from the Wastewater Plant along Mayhill Road to just south of Edwards Road. The final section of the effluent line from Edwards Road to Oakmont Country Club was sent out for bid. Bidding for the construction of the 18" effluent line was awarded to Texas Electric Utility Construction Inc. in November 2002 in an amount not to exceed $1,147,995.37. Texas Electric Utility received their Notice to Proceed on January 31, 2004. The project was completed in March of 2004. We began delivering effluent water to customers in April 2003. The annual debt service for the reuse line is approximately $80,000 (Exhibit 2). Currently, we have 10 customers connected to the effluent reuse system. With the exception of Oakmont, effluent customers are paying $1.35/1,000 gallons. Annual revenues (Exhibit 3) for the effluent reuse program have averaged around $90,000/year over the last 5 years. We have added 2 new customers in the last 3 months and are negotiating with a prospective customer currently. Oakmont is currently paying $48,000 annually for reuse water. Staff has discussed the possibility of a rate increase with Oakmont. Due to current economic conditions, Oakmont indicates that if the price of the effluent water increases significantly they will have to go back to using wells to offset the cost increase. This increase in the use of well water can potentially reduce effluent revenues to a point where the project cannot meet the debt service requirements for the pipeline. We have communicated with Oakmont's General Manager (Exhibit 4) that we would agree to extend the current contract for an additional 5 years. We indicated that at the end of this 5 year extension we would renegotiate the contract and a rate increase between 20-30% was anticipated. OPTIONS 1. Approve the extension of the current Agreement with Oakmont Country Club 2. Renegotiate the Agreement with Oakmont Country Club RECOMMENDATION Staff recommends renewal of the current Agreement with Oakmont Country Club through February 2015. PRIOR ACTION/REVIEW (Council, Boards, Commissions) 1. The Public Utility Board recommended approval (5-0) on January 25, 2010. EXHIBITS 1. Ordinance No. 2002-377 2. Effluent Line Debt Service 3. Effluent Customers Annual Revenue FY 04-09 4. Oakmont Country Club Letter of Renewal S .Ordinance with Agreement 6. PUB Minutes Respectfully submitted: Prepared by: Gayla Wright Jim Coulter Beneficial Reuse Manager Director, Water Utilities 4 TIE STATE TES ~ ~~NTY DENTIN § BENE~Z~,AL RE~~ LATER ~~NT~AT T~~ ~~NT~A'T far beneficial reuse of water is made and entered into on this the _ day of , ~0~~, by and between the IT~ ~ DEI~T~, TEA, a Texas Municipal arporatian, ~ ~ 5 East McKinney street, Denton, Texas 7G~~ ~ ~hereaer "~T~Y"}; and ~A~~NT AI~A~N~ENT a Texas orpo~at~on, acting herein by and through its duly authorized Board of Directors, of 1 ~0~ flub I~ause Dri~~re, Corinth, Texas 721 a thereafter "PL~R.~AEK"~. wITN~TH wI~EREA, the PU~~AE~ has identified a use for treated wastewater effluent, for beneficial reuse, hereinafter sometimes alternatively referred to as the "reclairried water,,, ar "reuse water" 1n Qrder to maintain Its general landsep~ng at the ~akmant country flub {hereinafter "~,~,I~,~I~T"} and to be a mare v~ahle and cast~effective alternative than puxchasing potable 1rr1gatlon water; aril wHEKEA, the pity of Denton, Texas, through its Pecan creek water Keclarnatian Plant, expects to be able to supply to the PUR~HAER treated wastewater effluent, far the purpose of its reuse; and w~EREA, in connection with this wastewater Effluent Transmission Line ~~o j ect {"Project"} the ~~TY shall construct a transmission line fer the purpose of seaming several entities with treated wastewater effluent, which line extends by and 1s contiguous tQ the Denton state choQl property, with its youth terminus at the ~al~mont vuntry flub in Corinth, Texas; and wHEREA., this Project generaXly involves a water^recycling project, and the quality of effluent produced from the Pecan creek water Recla~matian Plant presently meets the highest standard far effluent reuse {Type I}; and t i ~EREA, because this Contract involves the sale of treated v~aste~vater effluent, as distinguished firom treated potable mater suitable far human consumption, the ordinances of the pity ofDer~ton, Texas concerning potable mater rates do not apply to this Contract; and ~ER~1~, the Texas Natural Resource Conservation Commission ~hereaf~er "TNR"} has adapted the 0 TAC Chapter l ~ Rules ~vhxch regulate the use of reclaimed v~ater, and HEREA, the City of Denton, Texas has incorporated the ~ a TAC Chapter ~ I 0 Rules in the "Be~aeficial Reuse 'dater User's Handbook;" and ~VI~REA, an the ~ nth day of November, 2aa0, PURCI~AER and the CITY entered into a "Letter of uhscrlptlon and ~amltrnent" ~"Commitment Letter"} pravidzng for PURCHASER' purchase of treated v~aste~vater effluent from the CITY; specifying a monthly base payrrient, as in a "take or pad' agreement utilised ia~ the mater industry; the Commitment Letter further provided for delivery of the treated v~aste~ater effluent by the CXT~ to the PUR~AER' indlvrdual meter point; made the delivery of treated aste~vater effluent not subj ect to rationing; and containing other relevant provisions; and N~ T~IERE~~RE, far and 1n consideration of the terms and cond~t~ons conta1ned herein; the promises and covenants made herein; the terms and provrslans of the Letter of Subscription and Com.itn~ent hereinabave referred to, and the consideration paid and to be paid by ~AKM~NT NIANAEIViENT CORP., hereafter called "PURIfiASER", to the City ofDenton, Texas, hereafter called "CITY", the parties do hereby C~NTRA.CT and A.REE as follows: ARTILY PURI~.AS~, TANP~RTATI~N AND DELZ~Y~~t~ ~F D~ 'V~ATER ~ 1. I ~~LI~ATIONS. ~uxchaser has previously signed a Letter of Cozn.itment and Intent ~herea~er the "Commitment Letter"} attached hereto and incorporated herewith by reference as Exhibit "A". The Letter provides that the PURCHASER will purchase reuse grater from the CITY. ~~'E'~ER, PURCHASER shall purchase such reuse water from CITY, subj ect to terms other than as provided far in said Con~xtent Letter, In each n~anth during the Term has defined herein, CITY agrees to produce, and PURC~IASER agrees to take, an amount of reuse water ~h1ch 1s sufficient to 2 i f eet PURI~AE~' ~ an-site irri anon needs for all of P~RI~AE~' property far that month The n~ artier acknowled a and a ee that the exact amount taken by PURCHASER may vary from month p ~ to month. I~awever so ion as ~XTY i not in default hereunder, P~URI~ASER agrees to pay YTY the sum of 4 00o for each and every rr~onth during the Term, regardless of the exact amount tal~en b PLT.~I~AE~. The paxt1es agree that this ~s cans~stent v~1th a "take or pad} arrangement. Y PLTR~HASER will acce t reuse water from ~XTY at the point of delivery hereina.fler described in Exhibit "B "attached hereto and incorporated herewith by reference ~hereinafler referred to as "pSER'S delivery point"}. ~ .2 DELIER~ ~F ~EL~S~.~TER. CITY agrees to deliver, under the lirnitatians and conditions ~iereafler set forth in this contract, the reuse water which PURH~SER needs on a continuous basis at the deliveryl1ndrv1dual meter paint shown on ~xhlb~t attached hereto. PUR~~IASER shall be res ansible for construction and maintenance of all distribution lines from . PUI~HA~SER shall not be res onsible for associated costs for tapping the exlst~ng ITS reuse lines p fees meters and an other costs incurred by the CITY' to provide the reuse water to the a ~ ~ PURI~~.SER. Each treated wastewater effluent custarner of the CITY along the Pray ect, shall have its owrY reinforced concrete buried meter station. Title to, possession, and control of the reuse water shall remain with the IT~Y until it passes through the PUR~IASER' ~ntez and control valve at the Dint or Dints ol` delive as herein described; where title to, possession, and control of the reuse p p water shall ass from the 1TY to the P~IAER. The XTY shall furnish all reuse water p su lied under this contract at sufficient volumes to allav~ PURHA.SER to properly ~rriga~te its pp ro ert . If C1T~ should fail to furnish water at such sufficient volumes, as determined in the good p P y faith drscret~on of PI.JRI-IASER, then PURCHASER shall, if the situation 1s not re~nedled within fi~een 15 da s after written notice is received by ITV, be entitled to terminate this contract ~ ~ ~ rnunedlately with no further abllgat~on to CITY, 3 1.3 N~ ~AT~~NZNCr ~F WATER. The treated wastewater effiuer~t sold by the CITY to the PUHAEI~ shall not be sub' ect to rationing during any period of drought, or during any period of time that the use of atable water i curtailed or ather~rise restricted pursuant to any draught contingency plan, then in force and effects ART~LE IX, U~AL~TY AID ~JE D~ REUSE CATER 2~,1 UALIT~ ~F E WATER. The quality of the reuse water to be supplied by 7TY to ~UR~HA~R under tl~s ~antract shad meet the quality requirements established in 3 ~ TA. ha ter ~ I ~ far "T e I," a they may be amended from tine-to-time, which quality requare~nent are currently as shown below: BADS ar ~~D 5~ng1~ Tur~ldlty ~ Fecal oliforn~ FUI1 ~0 na~* Fecal aliform ?5 ~FUII mt** Geometric mean dingle grab sample {not to e~e~ed} The CITY shall erfarrn re aired sampling and analysis on the reuse water as prescribed by applicable p q regulatory agencies 2.~ ~JE OF REUSE WATER DY PHA~~R. PC~RHAER ~ UF~ THE AT ~EEIED ~Y AND UNDER T ~NTRAT FAR ~N-SITS nATI~N FRP~E ~NL~' AND IN ~II'11IAN~ KITH ALI~ REEENT OF 3 ~ TAB ~HAFTF~ ~ 1 ~ . 210.3 AND 1~.~4. "On~site iYTigatxon" refers to the use of water for maintenance and beautif1cation of the Xandscap1ng and facilities of the PURHAS~I~. THE REUSE wATE~ SUPPLXED ~1NDER THr NTRA~T ~ NDT iIITARLE ~`DR ~iINYAN ~NUPT~DN AND SMALL NAT BE USED P~TR.HAE~t ANY THIRD PARTY FQR ~RD~NARY 4 DDNI~T~ ~J~. PURCHASER shall tale all necessary precautions to prevent consumptro~a of the sub' ect reuse water by its employees ar other persons, including the pasting of warning signs in a both En lisp and par~.sh, in large and conspicuous printed letters at least four ~4"} inches high, at g all laces where employees or other persons are likely to have access to the reuse water. The actual p establishment, maintenance, and enforcement of such safety precautions sha11 be under the exclusive dominion and control of PURCHASER. F~LJ~RHAER assumes full legal responsibility far any as~d all damn es resulting from human consumption of the subs ect reuse water aver it reaches the g A~TRCHASER' point of delivery. ~RV~D~D H~wEVER, PURCHASER does not hereby waive any defense that nay be available under the laws and the Constitution of the State of Texas, or otherwise, in the event of any suitor action brought against it by any third-party far damages. 2.~ USA ~F REUSE WATER BY THIRD ~ARTIES~ PURCHASER shall not sell, trade, exchan e~ donate, or otherwise transfer the reuse water provided by tlns Contract to any third party, and shall not permit or a11ow the reuse water to be used In any manner by any third parties. ~.4 C~Il~LI1~C~ ~F 1~JSE CATER. PURCHASER shall construct or cause to be constructed supply lines such that it is not passible for any reuse water supplied to P~CTRHAER under this Contract from PURCHASER to re-enter any potable water system. However, this shall not revent the corn~ninling in water storage facilities of PURCHASER' reuse water with other p mater obtained by PURCHASER from another system or source for irrigation purposes. All such commingling shall be subj ect, however, to applicable City off' Denton regulations and ordinances, ar those of other go~rernmental agencies governing the use of reuse water. ~~~5 D~SCHARE OF REUSE WATER PURCHASER sha11 not cause ar permit the discharge of reuse v~ater ofd s1te, either airborne ar by surface runoff, unless permitted by the TNRCC. i §2. DRAFT SPRAY OF REUSE CATER PURCHASER shall not use reuse v~ater in any rr~anner where the result would be any drib or spray to areas v~here the general pu~~ic mould be exposed. ~,7 SET ~rRASS C~N]~ITI~NS. PURCI~ASER ha11 apply reuse water in such rr~anner as to minirriize wet grass cond~tian ~n unrestricted landscaped areas during the periods that the area should be in use. 8 EFFECT ~N ROUND CATER. PURCI~AER shall utilize reuse water ire a manner that does not threaten ar adversely affect ground water. i ~~.9 C~NI~ITI~N ~F SCE; PURHAER shad not apply any reuse water to the ground when the ground rs either saturated or frozen. §~.1 ~ NUXSANCE. PURCI~ASER shall be solely responsible far the prompt clean-up of any nuisance caridit~ans that e~clst an PURC,ASER' real property, v~hich result from storage or the use of reuse water reeexved from the CITY. ~~.11 BENEFICII~L REUSE CATER USERS' HANDB~~R. PURCHASER confirms its receipt ofthe "Beneficial Reuse dater Users' Handbook" ~herea~er the "Handbook"~ published by the City ofDenton, 'astewater Utilities, ar~d which Handbook was approved by the City ofDenton Pub1~c Utilities Board on the 7~` day of January, ~Oa2. The CTI'Y confirms that it will pran~ptly issue FURC~ASER a cagy of any new or amended Handbook that it .ay issue in the future, PURHAER is fu11y responsible far 1~no~ving the contents of the ~andbool~ and fully complying with 1t. i §2.12 ~EP~~rBILITY 0~' THP~ PARTIP~. ZT~ shall not be responsible, nor liable for any contamination of the reuse water or the inappropriate use or application of the reuse water supplied under this contract alter it passes through the P~R~' described point of delivery ~Plxhihit "B" hereto. PURCI~AP1R shall Indemnify the CITY far any and all damages and claims for damages arising franc any eontarninatian of the reuse water supplied under this ontraet aver it passes through the PURHAER' point of delivery; except regarding any damages resulting from the ITS'' failure to deliver the quality of reuse water required by state law and by the terms and ca~aditions of this contract. ITS' shall indemnify the P~CJRHI~E~, to the extent provided by applicable law, for any and all damages ar~d claims for damages arlsing from any contarrilnatian of the reuse water supplied under this ~antrct before it passes through the P~JRHAP~' point of delivery. ARTII~~ III. SATE ANTI l~~T~I~ §3.1 SATE HA~I~ FAR 1~J~ WATER. During the Term, the rate afpayment for reuse water provided hereunder shall be a follows. A~, A monthly base charge of 4,~~0 for each rrronth during the Terns of this ontract7 take ar pay. This monthly base rate pravi~on rs s1~nllar to a "take or pad' provision used ~n the water industry. In other words, sa long as the ~fT'Y is not in default hereunder, the monthly base charge shall be due and payable by PURAER to CITY for each and every month that the contract is in effect, whether ar not PURC~IAER has utilised any treated wastewater effluent far that month or not, and regardless of the amount aftreated wastewater effluent taken by and used by PR~AER; and A monthly facility charge of $ I x.20, per thirty days. §3.2 ETERII~C. CITY shall operate, rnaintaxn and read the reuse n~eterlmeters and shall record monthly usage, based an such rrieter readings. This shall be for the purpose of research and data gathering by CITY, and shall have no effect on the rates to be charged hereunder far reuse water, i f 1 CITY shall provide to PH.~~ER copies of any and all readings, data and other information obtained from such readings, which in any way relates to usage or consumption PCI~AER, at PI~RHAER' request, Further PURCHAE~ agzees that rt shall not ~n any rnanr~er Interfere, tamper, ar atteapt to do anything with regard to the operation or functioning of such meterln~eters. ~3.~, PR~~AER' OPT~~N~ The fTY sha11 be obligated to increase the reuse flaw to PURHAE~, subject however, to the condition that the CITY must be able to transport the increased volume of treated wastewater effluent to PURHAER through the existing treated wastewater effluent txans~r~issian line. ~fthe CITY cannot transport a volume of reuse water or supply potable water at the rate charged herein far reuse water until the supply of reuse water is resumed through the existing treated wastewater effluent transmission line, which ~s sufficient to meet P~C]I~HAE~' ~ on-site irrigation needs, then CXTY will be in default of this contract. ARTXLE Y~'. TE1I §4.1 TEII~ ANI~ REN~wAL ~F ~NT~.A.T. This antract shall be far a term beginning with the effective date, and ending dive ~5} years aver that date the "Term"}~ This contract rr~ay then be re-negotiated by CITY and PL~R~HAER upon mutually agreeable terms and conditions. ~4.~ EFFETI~E SATE. This contract shall be effecti~re upon the occurrence of all ofthe following: PUR7IAER' and ZTY' execution of this antract; connection by the CITY of its treated wastewater effluent transmission line to the PURH~4ER' delivery paint; issuance by the CITY of a written "N'otice to Proceed" to PUR~HI~ER.. For purposes ofthis antract, the "Effective Date" w~11 be the date on which the final necessary condition occurs. i TERIl~IATI~~ OF FONT ~T. This ortract sha~1 be terminated if either ply is prevented Exam fu1f111ing an obligation under this contract by ar~y final judgment of a taunt of competent jurisdiction,legisla~tian, or ather farce majeure. FLTHAE~ may terminate the on~act if PL~RHAER is of the apinian that the reuse water quality or volume is such a to prevent the F~1RHA.~~ from using it far the purpose of irr~igatian. In that evert, ~URHAER sha11 provide the CITY at least sixty days written notice of its intention to terminate the atract. CITY may terminate this antract ifn~onies required to be paid by FIHAER pursuant to this contract are not paid within thirty ~3~} days of written ratification issued by the CITY to PI~RHAR at PURCHASER' billing address according to the XT~' retards. dither party may ter~.inate this ~ortract upon the failure of the other party to abide by the provisions of this contract at~d to cure the alleged default, after being provided thirty ~3~}days written notice to da sa by the other party, This antract also nay be terminated by the mutual agreement afPUR~HA~I~ and CITY. A~.TILE ~A~IIJZTI~S X5.1 ON-BYTE FAILITIE. PUR~H~S~R shall construct and pay for all necessary facilities to deliver, store, use and discharge or dispose of the reuse water from the point of delivery onto ~UI~~HASER' praper~y, until such re-use water is used, discharged, or disposed of, which facilities shall be described far purposes of this on~ract, as an-site facilities. Design and can.structian must meet criteria established by I'TS' regulation and ordinance as weX1 as those established by 3a T~. 1 despite the fact that the fae~llt~es are situated m the 1ty of arlnth, Teas. ~5. SE~UR~TY ~F P~J~R~HASER'S SER~Z~E SSTE P~RHAE'S service systerri shall be installed by PURH,~SE~ sa as to prevent operation by unauthorized personnel pursuit to ~V T~V ~[if~o./.1~. I RE PIPING. ~I~TRHAER shall use an existing separate non-potable water distribution system, or shall design and construct ~ separate non-potable water dlstnbution system 1n Ompllance W1th ~a TAB ~ a.2~ and any other applicable local and state regulations. § ~ .4 T~RAF1 P~HA~R sha11 comply wx storage as required by 3 ~ TAB ~ 10. ~ 3 and any other applicable local and state req~ire~nent. X5.5 TAILwATE~ wATEI~ ~NTR~L, PCHAE~ shall construct any rewired tailwater watex controls, as required applicable 1aca1 ar~d state regulations. §5.~ ~T ~F PURHAEI' 0~-SITE FAILITIE. PURG~F~R shall have title anal bear all responsibilities including the casts of installing, operating, rriaintainnin, pearitting, licensing, and repairing any and all of P~JRHA~~' on-site fac~lrtles, other than those fac111t1es owned by the CITY unless parovided far by other mechanisms. §5.7 A~ T~ PUR~HAER' P~PE~TY. PURHAE~ shall allow the CITY ~4- hour access onto PU~HAEI~' property only that property which is the subj ect of this contract} as necessary to operate, n~azntaln, and Inspect fc~lltles owned by the ~T~. ATI~~ vY. ~N~RA.L ~R~vYYN ~~,1 G~~~~ I~Aw~ ~E~UE~ I1EALr ~~NTRUTI~N, This contract shall be govena.ed by and construed in accordance with the laws of the state of Texas, The obligations of the parties to this contract are performable in Denton bounty, Texas, and if legal action is necessary to enforce same, exclusive venue shall lie in Denton bounty, Texas. In case any one or more of the provisions contained in this antract sha11 for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, o~ unenforceability shall not affect any other 1~ I f provision of this Contract, and this Contract shall be considered as if such invalid, illegal, or unenforceahle provision had never been contained i~ this Contract. ~~1V~l~T ~F CONTRACT. This Contract cannot be assigned without the prior written consent of the other party. ~ ~ COMPLIANCE w~TH A~PLIABLE L~~V'. This Contract is subs ect to all legal requirements of the City Chartex of the City of Denton, Texas, the Denton Cade of Ordinances, and other laws and regulations both state and federal; and PITRCH~~~ agrees that it will promptly comply with all applicable laws, reg~iations, orders, and rules of the Federal, state, County, City, and all other applicable governmental agencies. specifically, PCJ~CHAB~ will comply with all provisions of 30 TAC 21~ as it is currently adopted or as it may be hereafter amended. These regulations are included in the abQVe-referenced "Beneficial Meuse water Handbook,'} ~~.4 F~RC~ MAJERE, Neither nor PURCHASER shall be required to perform any term, condition, ar covenant in this Contract, sa long as such performance is delayed or prevented by farce majeure, which shall mean acts ofod, civil riots, floods, and any other cause, not reasonably within the control of C~T~ andlor PURCHASER and which by the exercise of due diligence, Cfi`Y ar P~URCHAS~R is unable, wholly or in part, to prevent or overcame, ~~.5 ET AC~E~IVIENT. This Contract embodies the complete agreen~.ent afthe parties hereto, superseding any and all oral or written previous and contemporary contracts or agreements between the parties and relating to matters contained in this Contract, except as otherwise provided herein. This Contract may not be modified without the written agreement ofbath parties hereto. HOLD HA.RLES. ~a} PURCHI~SER, only to the extent allowed by applicable law, agrees to protect, defend, and save the CfT~Y, its representatives, officers, agents, employees, and attorneys harmless f'rorn and against any and all claims, demands, and causes of action of every kind tI i } and character lasses, casts, expenses, attorney's fees, and damages of evezy kind and character, for in~ to ar death of any person ar damage to any property arising out of ar in connection with the Jm'Y construction use, storage, maintenance, disposal, or discharge of reuse water of or fram pU~I~A~R' on~site facilities, Also, this provision shalX nat apply if any clairr~ arises and is roximatel caused ~ the CITY' fat~ure to delivez the quality of reuse water required by state law, P Y ~ and b the rovisians afthis contract. ~'he provls~ans afth~ ubsectlan shall not aP~IY to any ~ ~ 11a~111 resultin from the sole negligence of CITY, its representatives, officers, agents, cmployces, tY g ar attarrzeys. b CITY and to the extent allowed by applicable law, agrees to pratect, defend, and save the ~ ~UI~~H~~R its re resentatives, officers, agents, en~playees, and attorneys harmless Pram and p a ainst an and all claims, demands, and causes of action of every kind and character, lasses, costs, g Y ex eases attorne 's fees, and damages of every kind and character, for injury to, or death of any p ~ y erson ar damage to any property arising out of or in connection with the construction, use, storage, p maintenance dis oral, or discharge of reuse water of or from CITY' on-site fac~l~tres, which arse a ~ riar to delive of such water to PtIER' delivery paint. The p~ovrsions of th1s ubsect~on 6.G b shall not a 1 to any liability resulting from the sole negligence of PUR~AER, its ~ ~ pp y representatives, officers, agents, employees, ar attorneys. ~.7. H~I~D I~ARNXI~E - ~vEI~EN'~ C~~T~►ATION. In its performance of this antract P~CJ~RA~~ shad comply with all applicable federal, state} and local laws ar regulations a related to the use ar reuse of reuse water, or the enviran~nent, and will hold the ~I'fY, its re resentatives, officers, agents, employees, and attorneys harmless from anal against any and all p claims, demands, suits, causes of action, losses, damages, costs, attorney's fees, and expenses arising out of an noncom fiance violation or alleged nancarnpliarice violation by ~~TR~AE] of any such Y p laws; PRIDED I~~w~v~R, only to the extent provided by applicable law. 1~ I . RE1Vl~DIP~. In the event that CITY' is unable in good faith to comply with the delivery ~~.8 ease water re uirements to PURCI~ABR in this Contract within the first year from the Effective of r q to then PI~RC~IAEI at its o tion, shall be entitled to take CITE potable water and to pay far Da ~ p otable water sa taken at the contract rates established for reuse water herein, until such time as the ~ ITS is able to cony 1 with PIC~IAP~~' requirements or for a period of three ~3} years, ~ pY Never is less. Txi the event that CITY is unable in good faith to comply with the delivery ofreuse wh~c water re ulrernents to PUR~AER m this Contract at any time after the first year of this Contract, ~IA~R at its o Lion, sha11 be entitled to take CITY potable water and to pay for the then P~JR p ter so taken at the contract rates established for reuse water herein, until such tune as CITE potable wa 1 with PLCHAP~~' re uirements or for a period of two ~Z}years, v~hichever is 1s able to ca p y q exercise of this ren~ed b P~JRCHAER ha11 requixe three days prior written notice 1ess~ The y Y HAE~ to the CITY'. This remedy is intended to be inclusive of any other remedies by PURC vided to ~URCI~AE~ herein. In the event that the CITY is unable to furnish reuse water because pro Nan a of le a1 status b the TNRCC or other government agency, it sha11 be excused from of any c g ~ y further erformance of this Contract. In the even that PURCI~AE~ is unable to accept reuse water p fan. chap a of 1e a1 status b the TNRCC or other government agency, it shall be excused because o y g g Y from further performance of this Contract. ~E ~D PERMITS AND LICEN~. The parties shall each maintain in effect ~.9 e term of this Contract, an and all federal, state, andlor local licenses and permits which during th Y may be required of parties generally regarding the sub j ect of reuse v~ater. ~ ~D R~CO~D, Bath CITY and PLCHAER shall malntaln such records re aired b state re latrons and shall notify the TNRCC m writing wYth~n fire ~5} days of as are q y . , knowled a of reuse water use not specified and approved by the Executive Director of the obta~ng g TNRCC. G.11 PO~IC PO,wER NOT A~p`ECT~D. This provision does not affect the pohce powers 13 i r a of the ZT~ of Denton, Texas ar of any other governmental agenoy. ~nyDING EFFECT ~N ~E~~ AND AsrGN~ This contract shall binding upon arad shall inure to the benefit of the parties hereto and their respective hers, executors, ~dn11n1Stratars, successors, and their assigns. ~G.13 ~APTIGN AND GUNTER~ART. The captions to the various Articles and ubsectians of this antract axe for infaratzonal purposes only and shall in no way alter the substance or eaning of the terms and conditions of this Contract. This contract shall be executed in duplicate anginal counterparts, each of which shall he deemed an anginal and const1tute one and the same z~strument. EXECUTED by the City of Denton, Texas ~"CITY"} and ~AK~VI~NT ANAGEII~ENT CARP., acting by and through its ~aard of Directors ~herea~er the "PI~iAER"~ acting by and through their res ecti~e dui authon~ed and errs owered officers and re resentatives an this the ~ da p Y p p ~ Y of , 'CITY" CITY ~F DENTIN, TEA A Te ' 'pal Corp tiara 11~ICHAE C~ND~U-F , Ci y Manager ATTEST: ,TENN~'EI wALTE, CITY ECI~ETARY: BY: AP~R~VED A. T~ LEGAL F~R.~ F~E~BET L. RRGUT~, CZT~ ATTGRNE~Y 14 I i i i~ V 1tL~1117Li~!? ~AT~ON~T l1~ANACEEI~T ARP. 1 i 1Vi~~~'Y E~T~N, ~ic~ Pre~i~ent ATTEST BY. APPR~~ED AS T~ LEGA.~ ~Y, .IDalanont2381GENER.~4L.~IReuse at~r agr3,doc 1~ i . r S~ I :I: "1 ! ~ i ty ~f ~r~v~~Y` D~NTDN, Tx • ~~~-s~~a ~ ~ ~~~a~ ~a~-~~o . UTILITY ADIVII~IITRATI~N October 30, 2D~0 David Gardner General Manager Oakmont Country Club 1 QUO Club douse Drive Corinth, Texas 7 I ~ Re; Letter of Subscription and Commitment Purchase of Treated wastewater ~#uent frarn Denton Municipal utilities Wastewater ~uent Transmission Line Pra jest Dear Mr. hardener; The purpose ofthis letter is to memorialize and secure Gakmont ount~y hub's ~{`Customer"} written subscription and f~.rna commitment to participate as a customer of Denton Municipal Utilities ~"City"} to purchase treatment wastewater effluent from the City's Pecan Creek water Reclamation Plant ~"plant"}, in connection with the wastewater uent Transmission Line Project extending Southerly from the Plant along Mayhill Road, and along State school Road, with its terminus at Dakrnvnt Country Club, in Corinth, Texas ~"Project"~. Generally spealfing, the Project is awater-recycling project, The effluent quality from the City's Plant meets the highest standard far effluent reuse Type I~, The City intends to o'er the sale of wastewater effluent from the Project as a viable and more cost- effective alternative than same of its customers purchasing irrigation water. The ~rastewater efl~fuer~t transmission line {"line"} will be appro~im~tely 13,64 linear feet in length, and consists of f S" diameter, and a small amount of 8" diameter PAC line, each treated wastewater effluent customer of the City along the line will have its own reinforced concrete buried meter station. The City's estimated cost to construct and install the Pra~ect is 1, ~ million, The City, after careful analysis, has determined that the concentration of potential treated wastewater effluent customers in the area of your business makes the construction and installation of a wastewater effluent transrr~,ssian line economically viable. The "D~a~ica~e~ ~o ~~~i~y ~S"etv~Ce „ www. C~t~~, fd~l~fo. Coat CAr'1A61 1 /i-- J Dentin Public Utilities Board has indicated its support fvr the general concept - of the Project, but has expressed a concern regarding the City's ability to recover its casts to be expended an the Project ever a reasonable period of time. Accordingly, in order for the City to proceed and move forward with this Project and in order to justify the expenditure of funds on this Pro~ect~ City ~tafl~ has been instructed to obtain ftrrn written letters of subscription and commitment from the four targeted potential wastewater euent customers along the proposed route of the line in order to justify the City's financial conunitrrient to the Project. These four customers are: Oakmont Country Club, Denton state school, Dentin Regional Medical Center, and the Professional dice Building. City Staff` expects that before final approval of this Project is sought from the PUB and the Denton City Council, that letters of subscription and commitment will have tv be obtained from all four of the targeted customers identified above. The basic concepts and general terms of the final separate Agreement to be entered into by and between the City and Customer in the near future are as follows: ~ . The City requires a cotumitn~ent from Customer to pair at a minimum, a monthly base charge of ~,~D~Imonth far a n~nimur tertr~ of five years. The final ,Agreement shall be dra~ed so that th15 provision is slm~lar to a "take-ar~pay" agreement used in the water industry. The monthly base charge shall be due and payable by Customer far each and every month that the Agreement is in effect, whether or not Customer has utilised any efl~uent or not for that ir~onth. There can be no cayover of surplus e~uent from year toyear-based vn fiscal year October l through September ~ The Custa~ner may increase its minimum monthly base amount of treated wastewater eurent purchased during the term of the Agreement in order tv meet its increased needs by notifying the Citys who will then determine a new' monthly minimum rrianthly base charge in light of the increase of the rrzanthly base amount of effluent purchased, The City shall be obligated to increase such monthly minimum base amount, subject only to the condition that the City must be able to transport the increased volume of effluent to Customer through the line. 3. The treated wastewater effluent sold by the City to Customer shall trot be subject to rationing during any period of draught, or during any period of tirr~e that the use of water is curtailed or otherwise restricted pursuant to any draught contingency plan, then in force and effect. 4. 'The treated wastewater effluent shall be delivered by the line by the City to Customer's individual meter paint, 5. The City reasonably projects that the Project wih be substantially complete and that it will be able to transport and sell treated wastewater effluent to Customer by June "~drCa~ed ~o ~~~rry Se~vrc~" www, ci~yoa~etr~or~. ~o~r i i 200 in the absence of any catastrophe, force majeure, or problems with easement acquisitions. By signing this letter of subscription and commitment, you are stating your intention to subscribe as ~ pity treated wastewater euer~t purchaser under the above basic terms and provisions. ~'he pity will rely on your commitment remaining firm, and will expect you to enter into a final, mare detailed Agreement encompassing ail teams, conditions, and covenants, at a time in the near future; a~I subject to the approval of the PUB and the final appzova~ of the Denton pity council. we appreciate you interest and your desire to participate in this Fro jest. ~'he pity taf~ looks forward tv working with you on the Project and serving your treated wastewater Bunt needs. Please contact me at the above address or telephone number if you have any questions. sincerely, r ~Ioward Martin Assistant pity ll~anagerl[Jtilities HIn~sc ~akmor~t ountry Iu~b By: David Gardner General iVlan~ge~r Dated. ~~kmant Management corp. , aJk~a ~akr~or~t ~ountr~ flub, reserves the right to re~oind th.~s Letter of ub~criptiao ~~d Committment ~ ~ ~ ~ ~ ~J upon review of projected cast per unit ~nforrn~tion, when suoh ~n- farmat~.on i rude ava~.l~ble by the pity. 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We have experienced significant cost-increases associated-withthe,treatmentof wastewater and,the production of effluent water. Over the past,5 years we have experienced approximately Z0%-increase in treatment costs. We are not anticipating this type of increase-over the next five years. At the conclusion of this 5 year extension it will be necessary to renegotiate the terms-and-conditions-of -this contract. We would anticipate an approximate 20 -30% increase in effluent water costs-which will-have -to be passed onto our customers: Please anticipate these rate increases'beginning Match 1, 20144 We will contact you priorto this period°to renegotiate the contract. We appreciate your interest and your desire to participate in this.project. The-City Staff looks forward to working with you on the Project and'serving your treated wastewater effluent needs. Please contactme at 94 0.349.71941ifyou-have any questions. Sincerely, Jim Coulter Director, Water Utilities Cc. Wade Huff APPROVED AND AGREED: Oakm* C' untry lub - By Date: 1 I ~ th e k er erai Manager, j ORDINANCE N0. AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS APPROVING A RENEWAL OF BENEFICIAL REUSE WATER CONTRACT BY AND BETWEEN THE CITY OF DENTON, TEXAS AND THE OAKMONT MANAGEMENT CORP.; PROVIDING FOR THE CITY MANAGER' S EXECUTION THEREOF; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; PROVIDING FOR RETROACTIVE RATIFICATION AND APPROVAL THEREOF; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on the 19th day of November, 2002, the City Council adopted Ordinance No. 2002-377 that provided for approval of the Beneficial Reuse Water Contract, wherein the City would sell treated wastewater effluent to Oakmont Country Club for irrigation purposes; that Contract has expired, and the City and Oakmont desire to extend the terms and provisions of the Contract by a "Renewal of Beneficial Reuse Water Contract," (hereafter the "Renewal Contract") which provides for a further five (5) year term; NOW THEREFOR, THE COUNCIL OF THE CITY OF DENTON, TEXAS HEREBY ORDAINS: SECTION 1. The City Manager is hereby authorized to execute a Renewal of Beneficial Reuse Water Contract (the "Renewal Contract") by and between the City of Denton, Texas and the Oakmont Management Corp., in substantially the form of the Renewal Contract which is attached hereto and made a part of this ordinance for all purposes. SECTION 2. The preamble to this ordinance is incorporated into the terms of this Ordinance for all purposes. SECTION 3. The expenditure of funds as provided for in said Renewal Contract is hereby authorized. SECTION 4. This ordinance shall be ratified, confirmed and retroactively approved and shall become effective as of March 1, 2009, the date of expiration of the previous Contract; and this Ordinance shall otherwise be effective as of its date of passage and approval. PASSED AND APPROVED this the day of , 2010. MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY By~ THE STATE OF TEXAS § COUNTY OF DENTON § RENEWAL OF BENEFICIAL REUSE WATER CONTRACT THIS CONTRACT for the renewal of the "Beneficial Reuse Water Contract" dated November 19, 2002, is hereby entered into on this the day of , 2010, by and between the CITY OF DENTON, TEXAS, a Texas Municipal Corporation, 215 East McKinney Street, Denton, Texas 76201 (hereafter "CITY"); and the OAKMONT COUNTRY CLUB, acting herein by and through its duly authorized Board of Directors, of 1200 Club House Drive, Corinth, Texas 76210 (hereafter "PURCHASER"). WITNESSETH WHEREAS, the PURCHASER has previously identified a use for treated wastewater effluent, for beneficial reuse, hereinafter sometimes alternatively referred to as the "reclaimed water," or "reuse water" in order to maintain its general landscaping at the Oakmont Country Club (hereinafter "OAKMONT") and to be a more viable and cost-effective alternative than purchasing potable irrigation water; and WHEREAS, the City of Denton, Texas, through its Pecan Creek Water Reclamation Plant, expects to be able to continue to supply to the PURCHASER treated wastewater effluent, for the purpose of its reuse; and WHEREAS, in connection with this Wastewater Effluent Transmission Line Project ("Project") the CITY has constructed a transmission line for the purpose of serving several entities with treated wastewater effluent, which line extends by and is contiguous to the Denton State School property, with its South terminus at the Oakmont Country Club in Corinth, Texas; and WHEREAS, this Project generally involves awater-recycling project, and the quality of effluent produced from the Pecan Creek Water Reclamation Plant presently meets the highest standard for effluent reuse (Type I); and WHEREAS, because this Renewal Contract involves the sale of treated wastewater effluent, as distinguished from treated potable water suitable for human consumption, the ordinances of the 1 City of Denton, Texas concerning potable water rates do not apply to this Renewal Contract; and WHEREAS, the Texas Natural Resource Conservation Commission (hereafter "TNRCC") has adopted the 30 TAC Chapter 210 Rules which regulate the use of reclaimed water, and WHEREAS, the City of Denton, Texas has incorporated the 30 TAC Chapter 210 Rules in the "Beneficial Reuse Water User's Handbook;" and WHEREAS, the CITY and PURCHASER intend by this Renewal Contract to extend, for a term of five (5) years, the previous Contract entered into by and between the CITY and PURCHASER, which Contract was approved by the City Council ofCITY byOrdinance No. 2002- 377; and NOW THEREFORE, for and in consideration of the terms and conditions contained herein; the promises and covenants made herein; the terms and provisions of this renewal hereinabove referred to, and the consideration paid and to be paid by the PURCHASER to the CITY, the parties do hereby CONTRACT and AGREE as follows: ARTICLE I. PURCHASE, TRANSPORTATION AND DELIVERY OF REUSE WATER § 1.1 OBLIGATIONS. Purchaser has previously signed a Letter of Renewal (hereafter the "Commitment Letter") on October 21, 2009 that is attached hereto and incorporated herewith by reference as Exhibit "A." The Commitment Letter provides that the PURCHASER will continue purchase reuse water from the CITY. HOWEVER, PURCHASER shall purchase such reuse water from CITY, subject to terms as provided in the Commitment Letter. PURCHASER hereby agrees to "take or pay," for the sum of $4,000 for each and every month of the term hereof, for sixty (60) months, for an indefinite quantity of reuse water, solely for the purpose of on-site irrigation only of the property owned or used by PURCHASER, at the point of delivery before described in Exhibit "B" of the original hereinafter described Beneficial Reuse Water Contract" that is referred to herein and is incorporated herewith by reference. 2 § 1.2 DELIVERY OF REUSE.WATER. CITY agrees to deliver, under the limitations and conditions hereafter set forth in this Renewal Contract, the reuse water which PURCHASER needs on a continuous basis at the delivery/individual meter point shown on Exhibit "B" referenced in the preceding paragraph. PURCHASER shall be responsible for construction and maintenance of all distribution lines from the existing CITY reuse lines. PURCHASER shall pay all associated costs for tapping fees, meters, batching stations, and any other costs incurred by the CITY to provide the reuse water to the PURCHASER. Each treated wastewater effluent customer of the CITY along the Project, shall have its own reinforced concrete buried meter station. Title to, possession, and control of the reuse water shall remain with the CITY until it passes through the PURCHASER' S meter and control valve at the point or points of delivery as herein described; where title to, possession, and control of the reuse water shall pass from the CITY to the PURCHASER. The CITY does not guarantee its ability to furnish any reuse water supplied under this Contract at any particular pressure, but rather the pressure delivered shall be such pressure as the CITY'S system will render at the PURCHASER' S point of delivery. § 1.3 NO RATIONING OF WATER. The treated wastewater effluent sold by the CITY to the PURCHASER shall not be subj ect to rationing during any period of drought, or during any period of time that the use of potable water is curtailed or otherwise restricted pursuant to any drought contingency plan, then in force and effect. ARTICLE II. QUALITY AND USE OF REUSE WATER §2.1 QUALITY OF REUSE WATER. The quality of the reuse water to be supplied by CITY to PURCHASER under this Renewal Contract shall meet the quality requirements established in 30 TAC Chapter 210 for "Type I," as they may be amended from time-to-time, which quality requirements are currently as shown below: BODS or CBODS Smg/L Turbidity 3 NTU 3 Fecal Coliform 20 CFU/100 ml~ Fecal Coliform 75 CFU/100 ml~ ~ ~ Geometric mean ~ ~ Single grab sample (not to exceed) The CITY shall perform required sampling and analysis on the reuse water as prescribed by applicable regulatory agencies. §2.2 USE OF REUSE WATER BY PURCHASER. PURCHASER SHALL USE THE WATER RECEIVED BY AND UNDER THIS CONTRACT FOR ON-SITE IRRIGATION PURPOSES ONLY AND IN COMPLIANCE WITH ALL REQUIREMENTS OF 30 TAC CHAPTER 210.22, 210.23 AND 210.24. "On-site irrigation" refers to the use of water for maintenance and beautification of the landscaping and facilities of the PURCHASER. THE REUSE WATER SUPPLIED UNDER THIS CONTRACT IS NOT SUITABLE FOR HUMAN CONSUMPTION AND SHALL NOT BE USED BY PURCHASER OR ANY THIRD PARTY FOR ORDINARY DOMESTIC USE. PURCHASER shall take all necessary precautions to prevent consumption of the subject reuse water by its employees or other persons, including the posting of warning signs in both English and Spanish, in large and conspicuous printed letters at least four (4") inches high, at all places where employees or other persons are likely to have access to the reuse water. The actual establishment, maintenance, and enforcement of such safety precautions shall be under the exclusive dominion and control of PURCHASER. PURCHASER assumes full legal responsibility for any and all damages resulting from human consumption of the subject reuse water after it reaches the PURCHASER' S point of delivery. PROVIDED HOWEVER, PURCHASER does not hereby waive any defense that may be available under the laws and the Constitution of the State of Texas, or otherwise, in the event of any suit or action brought against it by any third-party for damages. §2.3 USE OF REUSE WATER BY THIRD PARTIES. PURCHASER shall not sell, trade, exchange, donate, or otherwise transfer the reuse water provided by this Renewal Contract to any 4 third party, and shall not permit or allow the reuse water to be used in any manner by any third parties. §2.4 COMMINGLING OF REUSE WATER. PURCHASER shall construct or cause to be constructed supply lines such that it is not possible for any reuse water supplied to PURCHASER under this Renewal Contract from PURCHASER to re-enter any potable water system. However, this shall not prevent the commingling in water storage facilities of PURCHASER' S reuse water with other water obtained by PURCHASER from another system or source for irrigation purposes. All such commingling shall be subject, however, to applicable City of Denton regulations and ordinances, or those of other governmental agencies governing the use of reuse water. §2.5 DISCHARGE OF REUSE WATER PURCHASER shall not cause or permit the discharge of reuse water off site, either airborne or by surface runoff, unless permitted by the TNRCC. §2.6 EXCESS AMOUNTS OF REUSE WATER PURCHASER shall use all of the reuse water provided under this Renewal Contract, and it shall not have any excess to be disposed of unless the excess reuse water is returned to the wastewater collection system. §2.7 DRIFT OR SPRAY OF REUSE WATER PURCHASER shall not use reuse water in any manner where the result would be any drift or spray to areas where the general public would be exposed. §2.8 WET GRASS CONDITIONS. PURCHASER shall apply reuse water in such manner as to minimize wet grass conditions in unrestricted landscaped areas during the periods that the area should be in use. §2.9 EFFECT ON GROUND WATER. PURCHASER shall utilize reuse water in a manner 5 that does not threaten or adversely affect ground water. §2.10 CONDITION OF SOIL. PURCHASER shall not apply any reuse water to the ground when the ground is either saturated or frozen. §2.11 NUISANCE. PURCHASER shall be solely responsible for the prompt clean-up of any nuisance conditions that exist on PURCHASER' S real property, which result from storage or the use of reuse water received from the CITY. §2.12 BENEFICIAL REUSE WATER USERS' HANDBOOK. PURCHASER confirms its previous receipt of the "Beneficial Reuse Water Users' Handbook" (hereafter the "Handbook") published by the City of Denton, Wastewater Utilities, and which Handbook was approved by the City of Denton Public Utilities Board on the 7th day of January, 2002. The CITY confirms that it will promptly issue PURCHASER a copy of any new or amended Handbook that it may issue in the future. PURCHASER is fully responsible for knowing the contents of the Handbook and fully complying with it. §2.13 RESPONSIBILITY OF THE PARTIES. CITY shall not be responsible, nor will it be liable for any contamination of the reuse water or the inappropriate use or application of the reuse water supplied under this Renewal Contract after it passes through the PURCHASER' S described point of delivery. PURCHASER shall fully and absolutely indemnify the CITY for any and all damages and claims for damages arising from any contamination of the reuse water supplied under this Renewal Contract after it passes through the PURCHASER' S point of delivery; except regarding any damages resulting from the CITY' S failure to deliver the quality of reuse water required by State law and by the terms and conditions of this Renewal Contract. ARTICLE III. RATE AND METERING 6 §3.1 RATE CHARGED FOR REUSE WATER. The rate for reuse water based on this Renewal Contract, for a period of five (5) years from the effective date of this Renewal Contract shall be: A. A monthly base charge of $4,000 for each month for the sixty (60) month term of this Renewal Contract, take or pay. This monthly base rate provision is similar to a "take or pay" provision used in the water industry. In other words, the monthly base charge shall be due and payable by PURCHASER to CITY for each and every month that this Renewal Contract is in effect, whether or not PURCHASER has utilized any treated wastewater effluent for that month or not; and B. A monthly facility charge of $16.20, per thirty days. §3.2 RATES AFTER FIVE YEARS. After five (5) years from the effective date of this Renewal Contract, the terms may be adjusted by negotiation of the parties, and the rates for reuse water shall be subject to change by the CITY on each October 1, thereafter, effective with the CITY' S fiscal year rate ordinance beginning effective October 1, 2014. The revised rates, if any, will be based on water reclamation plant operation and maintenance and non-operating expenses and wastewater treatment volumes from the most recently completed fiscal year. §3.3 METERING. CITY shall operate, maintain and read the reuse meter/meters and shall record monthly usage, based on such meter reading. Further PURCHASER agrees that it shall not in any manner interfere, tamper, or attempt to do anything with regard to the operation or functioning of such meter/meters. §3.4. PURCHASER' S OPTION. The CITY shall be obligated to increase the reuse flow to PURCHASER, subject however, to the condition that the CITY must be able to transport the increased volume of treated wastewater effluent to PURCHASER through the existing treated wastewater effluent transmission line. ARTICLE IV. TERM 7 §4.1 TERM AND RENEWAL OF RENEWAL CONTRACT. This Renewal Contract shall be for a term beginning effective as of March 1, 2009 and ending five (5) years after that date, on February 28, 2014 as stated in the Commitment Letter. This Renewal Contract may then be re- negotiated by CITY and PURCHASER for subsequent minimum five (5) year term(s) with the concurrence of both parties, with the expectation that the CITY, after ten years service under the previous Contract and this Renewal Contract, will likely require an upward adjustment in rates. The PURCHASER shall provide written notice to the CITY at least six (6) months in advance of expiration of this Renewal Contract stating that the PURCHASER desires to re-negotiate this Contract. §4.2 EFFECTIVE DATE. This Renewal Contract shall be effective as of March 1, 2009 as the CITY has preciously connected its treated wastewater effluent transmission line to the PURCHASER' S delivery point. §4.3 TERMINATION OF RENEWAL CONTRACT. This Renewal Contract shall be terminated if either party is prevented from fulfilling an obligation under this Renewal Contract by any final judgment of a court of competent jurisdiction, legislation, or other force majeure. PURCHASER may terminate the Renewal Contract if PURCHASER is of the opinion that the reuse water quality is such as to prevent the PURCHASER from using it for the purpose of irrigation. In that event, PURCHASER shall provide the CITY at least sixty (60) days written notice of its intention to terminate the Renewal Contract. CITY may terminate this Renewal Contract if monies required to be paid by PURCHASER pursuant to this Renewal Contract are not paid within thirty (30) days of written notification issued by the CITY to PURCHASER at PURCHASER'S billing address according to the CITY' S records. Either party may terminate this Renewal Contract upon the failure of the other party to abide by the provisions of this Renewal Contract and to cure the alleged default, after being provided thirty (30) days written notice to do so by the other party. This Renewal Contract also may be terminated by the mutual agreement of PURCHASER and CITY. 8 ARTICLE V. FACILITIES §5.1 ON-SITE FACILITIES. PURCHASER shall construct and pay for all necessary facilities to deliver, store, use and discharge or dispose of the reuse water from the point of delivery onto PURCHASER' S property, until such reuse water is used, discharged, or disposed of, which facilities shall be described for purposes of this Renewal Contract, as on-site facilities. Design and construction must meet criteria established by CITY regulation and ordinance as well as those established by 30 TAC §210, despite the fact that the facilities are situated in the City of Corinth, Texas. §5.2 SECURITY OF PURCHASER' S SERVICE SYSTEM. PURCHASER' S service system shall be installed by PURCHASER so as to prevent operation by unauthorized personnel pursuant to 30 TAC §210.25. § 5.3 REQUIRED PIPING. PURCHASER shall use an existing separate non-potable, or shall design and construct a separate non-potable water distribution system in compliance with 30 TAC §210.25 and any other applicable local and state regulations. §5.4 STORAGE PURCHASER shall comply with storage as required by 30 TAC §210.23 and any other applicable local and state requirements. §5.5 TAILWATER WATER CONTROLS. PURCHASER shall construct any required tailwater water controls, as required by applicable local and state regulations. §5.6 COST OF PURCHASER' S ON-SITE FACILITIES. PURCHASER shall have title and bear all responsibilities including the costs of installing, operating, maintaining, permitting, licensing, 9 and repairing any and all ofPURCHASER' S on-site facilities, other than those facilities owned by the CITY unless provided for by other mechanisms. §5.7 ACCESS TO PURCHASER'S PROPERTY.PURCHASER shall allow the CITY 24-hour access onto PURCHASER'S property (only that property which is the subject of this Renewal Contract) as necessary to operate, maintain, and inspect facilities owned by the CITY. ARTICLE VI. GENERAL PROVISIONS §6.1 GOVERNING LAW; VENUE; LEGAL CONSTRUCTION. This Renewal Contract shall be governed by and construed in accordance with the laws of the State of Texas. The obligations of the parties to this Renewal Contract are performable in Denton County, Texas, and if legal action is necessary to enforce same, exclusive venue shall lie in Denton County, Texas. Incase any one or more of the provisions contained in this Renewal Contract 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 provision of this Renewal Contract, and this Renewal Contract shall be considered as if such invalid, illegal, or unenforceable provision had never been contained in this Renewal Contract. §6.2 ASSIGNMENT OF CONTRACT. This Renewal Contract cannot be assigned without the prior written consent of the other party, which consent shall not be unreasonably withheld.. §6.3 COMPLIANCE WITH APPLICABLE LAWS. This Renewal Contract is subjectto all legal requirements of the City Charter of the City of Denton, Texas, the Denton Code of Ordinances, and other laws and regulations both state and federal; and PURCHASER agrees that it will promptly comply with all applicable laws, regulations, orders, and rules of the Federal, State, County, City, and all other applicable governmental agencies. Specifically, PURCHASER will comply with all provisions of 30 TAC §210 as it is currently adopted or as it may be hereafter amended. These to regulations are included in the above-referenced "Beneficial Reuse Water Handbook." §6.4 FORCE MAJEURE. Neither CITY nor PURCHASER shall be required to perform any term, condition, or covenant in this Renewal Contract, so long as such performance is delayed or prevented by force maj eure, which shall mean acts of God, civil riots, floods, and any other cause, not reasonably within the control of CITY and/or PURCHASER and which by the exercise of due diligence, CITY or PURCHASER is unable, wholly or in part, to prevent or overcome. §6.5 ENTIRE AGREEMENT. This Renewal Contract embodies the complete agreement of the parties hereto, superseding any and all oral or written previous and contemporary contracts or agreements between the parties and relating to matters contained in this Renewal Contract, except as otherwise provided herein. This Renewal Contract may not be modified without the written agreement of both parties hereto. §6.6 HOLD HARMLESS. PURCHASER, only to the extent allowed by applicable law, agrees to protect, defend, and save the CITY, its representatives, officers, agents, employees, and attorneys harmless from and against any and all claims, demands, and causes of action of every kind and character, losses, costs, expenses, attorney's fees, and damages of every kind and character, for injury to, or death of any person or damage to any property arising out of or in connection with the construction, use, storage, maintenance, disposal, or discharge of reuse water of or from PURCHASER'S on-site facilities. Also, this provision shall not apply if any claim arises and is proximately caused by the CITY' S failure to deliver the quality of reuse water required by State law, and by the provisions of this Renewal Contract. The provisions of this Subsection 6.6 shall not apply to any liability resulting from the sole negligence of CITY, its representatives, officers, agents, employees, or attorneys. §6.7. HOLD HARMLESS -GOVERNMENT REGULATION. In its performance of this Renewal Contract, PURCHASER shall comply with all applicable federal, state, and local laws or 11 regulations related to the use or reuse of reuse water, or the environment, and will hold the CITY, its representatives, officers, agents, employees, and attorneys harmless from and against any and all claims, demands, suits, causes of action, losses, damages, costs, attorney's fees, and expenses arising out of any noncompliance violation or alleged noncompliance violationby PURCHASER of any such laws; PROVIDED HOWEVER, only to the extent provided by applicable law. §6.8 REMEDIES. In the event that CITY is unable in good faith to comply with the delivery of reuse water requirements to PURCHASER in this Renewal Contract, then PURCHASER' S sole remedy shall be to take CITY potable water and to pay for the potable water so taken at the rates established for the potable water used. The exercise of this remedy by PURCHASER shall require ten (l o) days prior written notice by PURCHASER to the CITY. §6.9 REQUIRED PERMITS AND LICENSES. The parties shall each maintain in effect during the term of this Renewal Contract, any and all federal, state, and/or local licenses and permits which maybe required of parties generally regarding the subj ect of reuse water. §6.10 REQUIRED RECORDS. Both CITY and PURCHASER shall maintain such records as are required by state regulations and shall notify the TNRCC in writing within five (5) days of obtaining knowledge of reuse water use not specified and approved by the Executive Director of the TNRCC. i2 §6.11 POLICE POWERS NOT AFFECTED. This provision does not affect the police powers of the CITY of Denton, Texas or of any other governmental agency. §6.12 BINDING EFFECT ON SUCCESSORS AND ASSIGNS. This Renewal Contract shall be binding upon and shall inure to the benefit of the parties hereto and their respective officials, heirs, executors, administrators, successors, employees and their assigns. §6.13 CAPTIONS AND COUNTERPARTS. The captions to the various Articles and Subsections of this Renewal Contract are for informational purposes only and shall in no way alter the substance or meaning of the terms and conditions of this Renewal Contract. This Renewal Contract shall be executed in duplicate original counterparts, each of which shall be deemed an original and constitute one and the same instrument. EXECUTED by the City of Denton, Texas ("CITY") and the OAKMONT COUNTRY CLUB, acting by and through (hereafter the "PURCHASER") acting by and through their respective duly authorized and empowered directors, officers and representatives, on this the day of , 2010. "CITY" CITY OF DENTON, TEXAS A Texas Municipal Corporation By: GEORGE C. CAMPBELL CITY MANAGER ATTEST: JENNIFER WALTERS, CITY SECRETARY: By: 13 APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY By: "PURCHASER" OAKMONT By: Its ATTEST By: APPROVED AS TO LEGAL FORM: By: 14 it ~.:s:..~. r rl r ~~~r 901-A Texas street, Denton, Tx 76209 X940} 349-~~52 fax ~940~ X49-$951 der ~~i~t~ U~1~4 ~"~I4 [I~f~l~'~~ October 2~~ Derek l.inders Genera! Manager Oakmont Gauntry ~{ub 120D ~iub House Drive Corinth, Texas 1G210 Re: letter of Renewai Purchase afTreated 1111astewater Effluent from Denton Municipal Utilities Dear Mr, ~inders~ The purpose of this letter is to renew the current agreement with Oakmont far an additional five years under the general terms of the fins! separate Agreement -Ordinance i~o. 2QD2-317 signed November 19, This Agreement will be extended beginning March 1, 2~D~ and will end an February 28~~, 214. Ulle have experienced significant cast increases associated with the treatment of wastewater and the productian of effluent water. Over the past ~ years we have experienced approximately 2~l increase in treatment costs, 1111e are nat anticipating this type Qf increase over the next five years. At the conclusion of this 5 year extension it wi!! be necessary to renegotiate the terms and conditions of this contract. Uve would anticipate an approximate 20 increase in eff{cent water costs which will have to be passed on to our customers. Please anticipate these rate increases beginning March ~D14, ~1e gill contact you prior to this period to renegotiate the contract. we appreciate your interest and your desire to participate in this project. The City Staff looks forward to working vuith you an the Project and serving your treated wastewater effluent needs, Please eantact me at 94,349.7194 if you have any questions. sincerely, ~imCoulter Directar, Uvater l~tilities ~c~ wade M uff APPROVED AND AGREED; Oakma ~ entry lub ~y: Date: Ir ~ ~o erek 'der era! Manager DRAFT MINUTES PUBLIC UTILITIES BOARD January 25, 2010 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was present, the Chair of the Public Utilities Board thereafter convened into an Open meeting on Monday, January 25, 2010 at 9:02 a.m. in the Service Center Training Room, City of Denton Service Center, 901-A Texas Street, Denton, Texas. Present: Chair Dick Smith, Bill Cheek, Phil Gallivan, Bill Grubbs and Barbara Russell Ex Officio Members: George C. Campbell, City Manager Howard Martin, ACM Utilities Absent: John Baines and Randy Robinson, both excused ITEMS FOR INDIVIDUAL CONSIDERATION: 6) Receive a report; hold a discussion and give staff direction regarding the extension of the Effluent Reuse Contract (Ordinance No. 2002-377) with Oakmont Country Club. ACM Martin called on Director Coulter to present this item. Coulter stated that this item concerns the extension of the City's Effluent Reuse Contract entered into with Oakmont Country Club eight years ago. The effluent line runs from the city's wastewater treatment plant at Mayhill Road to Robinson Road. Oakmont Country Club pumps the water into a pond system and uses it for golf course irrigation. With the exception of the Oakmont Country Club, effluent customers are paying $1.35/1,000 gallons. Oakmont County Club is different in that it is the anchor of this effluent reuse system using the vast maj ority of the water and it is very important that it continues using the effluent. Oakmont Country Club pays a considerable amount of the revenues associated with the project which helps pay for the debt service for this line installed in 2002. Coulter stated that the annual debt service fluctuates annually, but it is around $80,000 yearly and maintaining a good revenue stream to insure the city can pay that debt service is important for the effluent reuse project. Coulter then stated that currently there are two new customers but both have been connected approximately two months which does not provide any historical data to indicate what kind of use volume and revenues will be associated with those. Staff is also currently working to add the Fuel Truck Wash facility at the Solid Waste facility. Coulter then stated there is also a Garland Spencer Plant which has been hooked up to the system for the last 25-30 years on a different line that runs down Spencer Road to the plant. But, due to the age of the turbines, and the inefficiencies of those particular turbines, Garland is using effluent less and less and in the last couple of years has dropped down to about $50,000 Public Utilities Board Agenda January 25, 2010 Page 2 of 2 annually. In discussions with staff it is anticipated that the City of Garland will begin upgrading those units in the future but staff does not know exactly when. Coulter stated that staff is recommending continuation of the existing contract with Oakmont Country Club for the next five years. The Oakmont Country Club is feeling the economic conditions and staff believes that if the rates are increased too much the Oakmont Country Club will, to offset those costs, go back to using well water from existing backup wells which will reduce the amount of water used and will reduce the amount of revenues the City has coming in. Again, staff is trying to maintain the revenues above $80,000 range to pay the debt service associated with that line. Board Member Grubbs asked what the costs are for providing that water. Coulter replied that the pumping cost is $.15 cents per thousand gallons and that maintenance costs bring it to $.20 per thousand gallons. Water Wastewater treatment costs are around $.60 per thousand gallons and those dollars are going to be expended to treat the water whether it goes down the creek or to a customer. City Manager Campbell asked if staff monitors the amount of water the Country Club takes. Coulter replied yes and since 2003 the Country Club has taken 360 million gallons. City Manager Campbell then asked if the Country Club pays whether it takes it or not. Coulter replied that the Country Club pays $4,000 monthly even when it is an extremely wet month and it uses zero water. City Manager Campbell asked if there was a time the Country Club paid and had not taken water. Coulter replied sure, but the data does not break it down per month but there have been some months where the Country Club used a couple of dollars worth of water. City Manager Campbell asked if Denton is a sole source or does the Country Club use the wells. Coulter replied it is his understanding that since the Country Club began taking effluent it has not used wells. Coulter then added that the reason the Country Club wanted this water over and above the wells is that the sodium content in the well water is high and the salt concentration building up in the soil will eventually kill the grass on the greens. Coulter stated that if the City increases the cost the Country Club will start mixing well water and effluent water to prevent it from burning the greens. Coulter also added that it is believed that the longer the Country Club goes without using the wells the more likely it will stick with the effluent water and will not be tempted to use the wells in the future. Board Member Russell asked if a small raise would prevent the Country Club from going back to using the wells. Coulter replied that Oakmont Country Club is in agreement to look at the rate increase which gives it a planning horizon and provides the City revenues for an additional five years for the debt service associated with the line. Board Member Cheek moved to approve with a second from Board Member Gallivan. The motion was approved by a 5-0 vote. The meeting was adj ourned by consensus at 9:54 a.m. This page left blank intentionally. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Airport ACM: Howard Martin, 349-8232 SUBJECT: Consider adoption of an ordinance authorizing the City Manager to approve a First Amendment to an Airport Lease dated December 1,1989 between the City of Denton, Texas and David Smith at the Denton Municipal Airport; and providing an effective date. The Airport Advisory Board recommends approval (7-0). BACKGROUND: A five (5) year extension of an original fifteen (15) year lease of property at Denton Airport where three (3) portable hangars are located expired on November 30, 2009. A fourth portable hangar at this location is currently under lease until August 31, 2010. The following port-a-port hangar owners have been notified by the Airport Staff that their hangars will have to be moved once an alternate location is provided with access to the new Southeast Taxiway to be completed at Denton Airport by June 2010: Bill Davidson 4824 Lockheed (lease expires 08/31/2010) Tony Montgomery 4846 Lockheed (lease expires 11/30/2009) David Smith 4862 Lockheed (lease expires 11/30/2009) Will Evans 4888 Lockheed (lease expires 11/30/2009) The property on which the port-a-ports are currently located is ahigh-visibility location where the Airport development plan identifies permanent box hangars to be constructed. A portion of the property maybe needed for an aircraft staging area. While re-development of this location is being planned by Airport Staff, the current tenants whose leases have expired have been told they maybe allowed to stay on a temporary basis until an appropriate lot is available for them to move their portable hangars by mid-2010. The proposed lease amendment for each tenant provides amonth-to-month contract extension for a maximum nine (9) month period, with a provision fora 90-day notice to vacate once the alternate location is available. Airport Staff will continue to negotiate the relocation of the portable hangars as the Southeast Taxiway proj ect is constructed beginning mid-January 2010. The exact lotto which these hangars maybe relocated has not been finally identified; however, the plan is to move the port-a-ports to the extreme southeast corner of Airport property, with taxiway access. RECOMMENDATIONS: Airport Staff recommends approval of the amendment to an Airport Lease Agreement dated December 1,1989 between the City of Denton and each owner of a portable hangar located at Denton Airport. PRIOR ACTION/REVIEW (Council, Boards, Commissions) The Airport Advisory Board recommended approval at their meeting on January 13, 2010 by a vote of 7-0. EXHIBITS 1.Ordinance to amend the Airport Lease Agreement dated December 1, 1989 between the City of Denton and David Smith, owner of a portable airplane hangar located at Denton Airport 2. Amendment to original lease 3. Excerpt from DRAFT minutes of the Airport Advisory Board Respectfully submitted: Quentin Hix Airport Manager s:l~u€ do~umer~~sl~rd~nancesllUlairport s~it~ ~e~se ordir~nc~.do~ DRD~NANCE NQ. ORDINANCE AUTH~RI~IN THE CITY MANAGER TO APPRD~'L FIRST AMENDMENT T~ AIRPGRT LEASE DATED DECEMBER 1, I9~~ BET~VEN TAE CITY OF DENTDN, TEAS AND DAVrD IVIITH AT THE DENTIN MUNCIPAL AIRPGRT; AND PR~~ID~N~ A~ EFFECT~~~ DATE. WHEREAS, certain real property upon the Denton ~Vlnnicipa.~ .Airport was leaped to David Sm1th ~n an Airpo Lease Agreement, and V~HERE,AS; the City afDenton and Lessee desire to amend the lease agreement, and H~EAS, the Airport Board rocon~nends approval of the Amendment; and WHEREAS, the City Cou~aoil deems it in the public tntere~t to approve this A~~i nment of the Lease; N~, T~IEREFGR~, THE CGUNCII~ ~F THE CITY OF DENTIN HEREBY GRD.AINS: S~CTI~N 1. The City Manager or his designee is hereby authari~ed to execute First Amendment to an Airport Lease Agreement between the City of Denton and David Snaith at the Denton Municipal Airport which is attached to and made a part of this ordinance far all u oyes P and to e~erczse aid rights and duties of the City of Denton wader the Ai art Lease A reement~ ~ g SECTION This ordinance shall become effective tmediateiy upon its pass~a e and approval. PASSED AND APPRGED this the day of , 2~ 10. II~AR A. BI~RROIJGI~S, MAYDI~ s:lour docu~entslor~in~ncesll~l~irport smith lease ~rdinance.da~ ~TTET: ,~~NN~~'ER ~LTE~, QTY ERETA.~Y ~Y: AP~~VED A T~ LEAD ~~l~: AN~TA BURE ITS ATT~R~E~ FIRST AMENDMENT TO PAD SITE AIRPORT LEASE BETWEEN CITY OF DENTON AND DAVID SMITH THE S TATE OF TEXAS ~ § KNOW ALL MEN BY THESE PRESENTS COUNTY OF DENTON § This First Amendment to that certain Pad Site Lease which was first made and executed on December 1, 1989 at Denton, Texas, by and between the City of Denton, Texas, a municipal corporation, hereinafter referred to as "Lessor," and David Smith, hereinafter referred to as "Lessee". WITNES SETH: WHEREAS, the Lessor and the Lessee have requested an amendment of the Lease term and the City Manager and the Airport Advisory Board support the amendment of the Lease; NOW, THEREFORE, in consideration of the promises and the mutual covenants contained in this Agreement, the parties agree as follows: SECTION III. -TERM OF THE LEASE IS HEREBY AMENDED TO READ AS FOLLOWS: The term of this lease shall be for a period of nine (9) months, on a month-to-month basis, commencing on the 1St day December 2009 and continuing through the 31St day August 2010, unless earlier terminated under the provisions of the Lease. SECTION X. -INDEMNITY OF THE LEASE IS HEREBY AMENDED TO READ AS FOLLOWS Indemnit .Lessee must indemnify, hold harmless and defend the Lessor, its officers, agents and employees, from and against liability for any and all claims, liens, suits, demands and/ar actions for damages, injuries to persons (including death), property damage, (including loss of use), and expenses, including court costs, attorneys' fees and other reasonable costs, occasioned by or incidental to the Lessee's occupancy or use of the Leased Premises or the Airport and/or activities conducted in connection with or incidental to this Lease Agreement, including all such causes of action based on common, constitutional or statutory law, or based in whole or in part upon the negligent or intentional acts or omissions of Lessee, its officers, agents employees, invitees or other persons. Lessee must at all times exercise reasonable 1 precautions on behalf of, and be solely responsible for, the safety of its officers, employees, agents, customers, visitors, ~nvltees, licensees and other persons, as well as their property, while in, on, or involved in any way with the use of the Leased Premises. The Lessor is not liable or responsible for the negligence or intentional acts or omissions of the Lessee, its officers, agents, employees, agents, customers, visitors and other persons. The Lessor shall assume no responsibility or liability for harm, injury, or any damaging events which are directly or indirectly attributable to premise defects, whether real or alleged, which may now exist or which may hereafter arise upon the Leased Premises, responsibility for all such defects being expressly assumed by the Lessee. The Lessee agrees that this indemnity provision applies to all claims, suits, demands, and actions arising from all premise defects or conditions. THE LESSOR AND THE LESSEE EXPRESSLY INTEND THIS INDEMNITY PROVISION TO REQUIRE LESSEE TO INDEMNIFY AND PROTECT THE LESSOR FROM THE CONSEQUENCES OF THE LESSOR'S OWN NEGLIGENCE WHILE LESSOR IS PARTICIPATING IN THIS LEASE AGREEMENT WHERE THAT NEGLIGENCE IS A CONCURRING CAUSE OF THE INJURY, DEATH, OR DAMAGE. NOTWITHSTANDING THE TERMS OF THE PRECEDING SENTENCES, THIS INDEMNITY PROVISION DOES NOT APPLY TO ANY CLAIM, LOSS, DAMAGE, CAUSE OF ACTION, SUIT AND LIABILITY WHERE THE INJURY, DEATH, OR DAMAGE RESULTS FROM THE SOLE NEGLIGENCE OF THE LESSOR OR ANY OF ITS EMPLOYEES, CONTRACTORS, OR AGENTS, UNMIXED WITH THE FAULT OF ANY OTHER PERSON OR ENTITY. ALL OTHER PROVISIONS OF THE LEASE AGREEMENT REMAIN IN FULL FORCE AND EFFECT. IN WITNES S WHEREOF, the parties have executed this Agreement as of the day and year above first written. BY LESSOR: GEORGE C. CAMPBELL CITY MANAGER 2 ATTEST: JENNIFER wALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: _ V BY LESSEE: .a. DAVID SMITH STATE OF TEXAS COUNTY OF DENTON A This instrument was acknowled ed before me on the ~ da of , g y f 20 1~ , by David Smith. ~ ~f~/'~,Q SEAL Naar Public State of Texas [ ] ~ y M Commission Ex Tres ~ ` y p ~ ~ ~ (or Notary Stamp) STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the day of , 20 , by George Campbell, City Manager on behalf the City of Denton, Texas, a municipal corporation. [SEAL] ~ Notary Public, State of Texas My Commission Expires (or Notary Stamp) 3 DRAFT MINUTES AIRPORT ADVISORY BOARD JANUARY 13, 2010 After determining that a quorum was present, the Airport Advisory Board of the City of Denton, Texas convened in a Regular Meeting on January 13, 2010 at 5:30 p.m. in the Airport Terminal Building, Meeting Room at 5000 Airport Road, Denton, Texas, at which the following items were consi ere BOARD MEMBERS PRESENT: Chairman, Mr. Brown, Vice Chairman Dr. Smith, Mr. Brewer, Mr. Clark, Mr. Pugh, Mr. Schofield, and Mr. Fykes arrived at 5:33P.M. BOARD MEMBERS ABSENT: None STAFF MEMBERS PRESENT: Quentin Hix, Airport Manager, Julie Mullins, Administrative Assistant. PUBLIC PRESENT: Jeff Soules, US Aviation Group, Mark Taylor, US Aviation Group, Rick Woolfolk, Tony Montgomery, Tenant, David Smith, Tenant, David Austin, Tenant, Chris Hill, Tenant, Damon Ward, Business Air Center. ITEMS FOR INDIVIDUAL CONSIDERATION IX. Receive a report, hold a discussion and provide a recommendation to City Council requesting the City Manager, or his designee, to execute on behalf of the City of Denton an ordinance authorizing a first amendment to an Airport Lease Agreement dated December 1,1989, between the City of Denton, Texas and David Smith at the Denton Municipal Airport; and providing an effective date. Dr. Smith made a motion to an Airport Lease Agreement extension for items 8 and 9. Mr. Brewer seconded the motion. Motion carried 7-0. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Airport ACM: Howard Martin, 349,8232 SUBJECT: Consider adoption of an ordinance authorizing the City Manager to approve a First Amendment to an Airport Lease dated December 1,1989 between the City of Denton, Texas and William Evans at the Denton Municipal Airport; and providing an effective date. The Airport Advisory Board recommends approval (7-0). BACKGROUND: A five (5) year extension of an original fifteen (15) year lease of property at Denton Airport where three (3) portable hangars are located expired on November 30, 2009. A fourth portable hangar at this location is currently under lease until August 31, 2010. The following port-a-port hangar owners have been notified by the Airport Staff that their hangars will have to be moved once an alternate location is provided with access to the new Southeast Taxiway to be completed at Denton Airport by June 2010: Bill Davidson 4824 Lockheed (lease expires 08/31/2010) Tony Montgomery 4846 Lockheed (lease expires 11/30/2009) David Smith 4862 Lockheed (lease expires 11/30/2009) Will Evans 4888 Lockheed (lease expires 11/30/2009) The property on which the port-a-ports are currently located is ahigh-visibility location where the Airport development plan identifies permanent box hangars to be constructed. A portion of the property maybe needed for an aircraft staging area. While re-development of this location is being planned by Airport Staff, the current tenants whose leases have expired have been told they maybe allowed to stay on a temporary basis until an appropriate lot is available for them to move their portable hangars by mid-2010. The proposed lease amendment for each tenant provides amonth-to-month contract extension for a maximum nine (9) month period, with a provision fora 90-day notice to vacate once the alternate location is available. Airport Staff will continue to negotiate the relocation of the portable hangars as the Southeast Taxiway proj ect is constructed beginning mid-January 2010. The exact lotto which these hangars maybe relocated has not been finally identified; however, the plan is to move the port-a-ports to the extreme southeast corner of Airport property, with taxiway access. RECOMMENDATIONS: Airport Staff recommends approval of the amendment to an Airport Lease Agreement dated December 1,1989 between the City of Denton and each owner of a portable hangar located at Denton Airport. PRIOR ACTION/REVIEW (Council, Boards, Commissions) The Airport Advisory Board recommends approval of the lease extension by a 7-0 vote. EXHIBITS 1.Ordinance to amend the Airport Lease Agreement dated December 1, 1989 between the City of Denton and William Evans, owner of a portable airplane hangar located at Denton Airport 2. Amendment to original lease 3. Southeast Taxiway development map 4. Excerpt from DRAFT minutes of the Airport Advisory Board. Respectfully submitted: Quentin Hix Airport Manager s:~onr dac~mer~tsl~rdinancesll ~lai~orf evens lease amendt~ent ord~nar~ce.~oc ORDINANCE N~ AN~ ORDINANCE ATH~RI~IN THE CITY MANAEI~ T~ AFFR~~E A FIRST AMENDMENT T~ AN A~RPO~T LEASE DATED DECMBE~ 1, 1989 BET~~N THE CITY OF DENTIN, TE~.AS AND WILLIAM ERNS AT THE DENTIN UI~CI~.AL AIRPORT; AND Pr~OIDING~ AN EFFECTZ~E DATE. WHEREAS, certain real property upon the Denton Municipal Airport was leased to 'William Evans in an Airpo Lease Agreement, and WHEREAS, the City of Denton and Lessee desire to amend the lease agreel~er~t, and WHEREAS, the Airport Board recommends approval of e Amendment; and ~VHER~AS, the City Council deems ~t In the public interest to approve this Assignment of the Lease; THEREFORE, THE COUNCIL OF THE CITY ~F DENTON HEREBY ORDAINS: SECTION 1. The City Manager or his designee is hereby authorized to execute a First Amendment to an Airport Lease Agreement between the City of Denton and 'illiarrl Evans t the Denton Municipal Airport which is attached to and made a part of this ordinance ~`or .l purposes and to exercise all rights and duties of the City of Denton under the Airport Lease Agreement. ECTYON This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2010. MARS A. BURROU~HS, MAYOR 1 1 s:l~ur documer~slprdinan~esll alairpor~ evans lease amendment ordina~ce.~uc ATTEST: ~~NNIFFII~ ALTF~~S, CITY ~RETARY BY: ~~F~~~~ A T~ I1~CAL FARM: ANITA BURES, CITY ATTI~N~Y ~ 6 J. 1 ~ FIRST AMENDMENT TO PAD SITE AIRPORT LEASE BETWEEN CITY OF DENTON AND WILLIAM EVANS THE STATE OF TEXAS ~ ~ KNOW ALL MEN BY THESE PRESENTS COUNTY OF DENTON ~ This First Amendment to that certain Pad Site Lease which was first made and executed on December 1, 1989 at Denton, Texas, by and between the City of Denton, Texas, a municipal corporation, ,hereinafter referred to as "Lessor," and William Evans, hereinafter referred to as "Lessee". WITNESSETH: WHEREAS, the Lessor and the Lessee have requested an amendment of the Lease term and the City Manager and the Airport Advisory Board support the amendment of the Lease; NOW, THEREFORE, in consideration of the promises and the mutual covenants contained in this Agreement, the parties agree as follows: SECTION III. -TERM OF THE LEASE IS HEREBY AMENDED TO READ AS FOLLOWS The term of this lease shall be for a period of nine (9) months, on a month-to-month basis, commencing on the 1st day December 2009 and continuing through the 31st day August 2010, unless earlier terminated under the provisions of the Lease. SECTION X. -INDEMNITY OF THE LEASE IS HEREBY AMENDED TO READ AS FOLLOWS Indemnity Lessee must indemnify, hold harmless and defend the Lessor, its officers, agents and employees, from and against liability for any and all claims, liens, suits, demands and/or actions for damages, injuries to persons (including death}, property damage, (including loss of use), and expenses, including court costs, attorneys' fees and other reasonable costs, occasioned by or incidental to the Lessee's occupancy or use of the Leased Premises or the Airport and/or activities conducted in connection with or incidental to this Lease Agreement, including all such causes of action based on common, constitutional or statutory law, or based in whole or in part upon the negligent or intentional acts or omissions of Lessee, its officers, agents employees, invitees or other persons. Lessee must at all times exercise reasonable 1 precautions on behalf of, and be solely responsible for, the safety of its officers, employees, agents, customers, visitors, invitees, licensees and other persons, as well as their property, while in, on, or involved in any way with the use of the Leased Premises. The Lessor is not liable or responsible for the negligence or intentional acts or omissions of the Lessee, its officers, agents, employees, agents, customers, visitors and other persons. The Lessor shall assume no responsibility or liability for harm, injury, or any damaging events which are directly or indirectly attributable to premise defects, whether real or alleged, which may now exist or which may hereafter arise upon the Leased Premises, responsibility for all such defects being expressly assumed by the Lessee. The Lessee agrees that this indemnity provision applies to all claims, suits, demands, and actions arising from all premise defects or conditions. THE LESSOR AND THE LESSEE EXPRESSLY INTEND THIS INDEMNITY PROVISION TO REQUIRE .LESSEE TO INDEMNIFY AND PROTECT THE LESSOR FROM THE CONSE UENCES OF THE LESSOR'S OWN NEGLIGENCE WHILE LESSOR IS PARTICIPATING IN THIS LEASE AGREEMENT WHERE THAT NEGLIGENCE IS A CONCURRING CAUSE OF THE INJURY, DEATH, OR DAMAGE. NOTWITHSTANDING THE TERMS OF THE PRECEDING SENTENCES, THIS INDEMNITY PROVISION DOES NOT APPLY TO ANY CLAIM, LOSS, DAMAGE, CAUSE OF ACTION, SUIT AND LIABILITY_ WHERE THE INJURY, DEATH, OR DAMAGE RESULTS FROM THE SOLE NEGLIGENCE OF THE LESSOR OR ANY OF ITS EMPLOYEES, CONTRACTORS, OR AGENTS, UNMIXED WITH THE FAULT OF ANY OTHER PERSON OR ENTITY. ALL OTHER PROVISIONS OF THE LEASE AGREEMENT REMAIN IN FULL FORCE AND EFFECT. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year above first written. BY LESSOR: GEORGE C. CAMPBELL CITY MANAGER 2 ATTEST: JENNIFER WALTERS, CITY SECRETARY BY. APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY ~ BY: d°°°~ BY LES S ' I LAM EVANS STATE OF TEXAS COUNTY OF DENTON This instrument was acknowled ed before me on the da of '~J~..~,r'~~..r , g Y 20 ~ , by William Evans. , [SEAL] N tary Public, State of Texas ~ ~~g My Commission Expires ~ ~ ~0 (or Notary Stamp) Illy 27~ il~13 a~~ STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the day of , 20 , by George Campbell, City Manager on behalf the City of Denton, Texas, a municipal corporation. [SEAL] Natary Public, State of Texas My Commission Expires (or Notary Stamp) 3 Y_ a r ;as 3 ~ '.a~.. rte?.., .4 is '+a•°'..sl' r '-z ~.r .v" _ - ,j, s. ~.-'Sr•._ ti. '+;7 .W•S-ice •,~..w . 71 ~~--•e~• f- „y ~~V r i z s-..r L . L. 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DRAFT MINUTES AIRPORT ADVISORY BOARD JANUARY 13, 2010 After determining that a quorum was present, the Airport Advisory Board of the City of Denton, Texas convened in a Regular Meeting on January 13, 2010 at 5:30 p.m. in the Airport Terminal Building, Meeting Room at 5000 Airport Road, Denton, Texas, at which the following items were considered: BOARD MEMBERS PRESENT: Chairman, Mr. Brown, Vice Chairman Dr. Smith, Mr. Brewer, Mr. Clark, Mr. Pugh, Mr. Schofield, and Mr. Fykes arrived at 5:33P.M. BOARD MEMBERS ABSENT: None STAFF MEMBERS PRESENT: Quentin Hix, Airport Manager, Julie Mullins, Administrative Assistant. PUBLIC PRESENT: Jeff Soules, US Aviation Group, Mark Taylor, US Aviation Group, Rick Woolfolk, Tony Montgomery, Tenant, David Smith, Tenant, David Austin, Tenant, Chris Hill, Tenant, Damon Ward, Business Air Center. ITEMS FOR INDIVIDUAL CONSIDERATION VII. Receive a report, hold a discussion and provide a recommendation to City Council requesting the City Manager, or his designee, to execute on behalf of the City of Denton an ordinance authorizing a first amendment to an Airport Lease Agreement dated December 1,1989, between the City of Denton, Texas and William Evans at the Denton Municipal Airport; and providing an effective date. Mr. Hix commented to the Board to look at the map provided in the packet to see where the hangars are located. The plan for the three leases is to extend the leases on the Port a Ports for nine (9) months until the SE Taxiway construction is completed. There has been communication to all the Port a Port owners to let them know the intent to the extension. Mr. Brown commented about the leases that all the hangars on the airport are real property and attached to the ground as a fixed hangar. When the leases are up, all improvements revert to the airport. The Port a Port's are removable and can be relocated; therefore, they are treated as personal property and do not revert to the Airport. The leases on these Port a Ports area 15 year lease with a 5 year extension which expired in November 2009. There is no intent to renew the leases, and Airport management is working to relocate the tenants to a new area on the airport property. Mr. Brown asked Mr. Hix if he summarized this item correctly. Mr. Hix saki yes. Dr. Smith commented that we should leave the port a port leases alone and negotiate a new lease. Mr. Schofield recommends a motion to extend the lease for 9 months until the SE taxiway construction is completed in order to allow time to negotiate a new lease. Dr. Smith seconded the motion. Motion carried 7-0. This page left blank intentionally. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Airport ACM: Howard Martin, 349-8232 SUBJECT: Consider adoption of an ordinance authorizing the City Manger to approve a First Amendment to an Airport Lease dated December 1,1989 between the City of Denton, Texas and Tony Montgomery at the Denton Municipal Airport; and providing an effective date. The Airport Advisory Board recommends approval (7-0). BACKGROUND: A five (5) year extension of an original fifteen (15) year lease of property at Denton Airport where three (3) portable hangars are located expired on November 30, 2009. A fourth portable hangar at this location is currently under lease until August 31, 2010. The following port-a-port hangar owners have been notified by the Airport Staff that their hangars will have to be moved once an alternate location is provided with access to the new Southeast Taxiway to be completed at Denton Airport by June 2010: Bill Davidson 4824 Lockheed (lease expires 08/31/2010) Tony Montgomery 4846 Lockheed (lease expires 11/30/2009) David Smith 4862 Lockheed (lease expires 11/30/2009) Will Evans 4888 Lockheed (lease expires 11/30/2009) The property on which the port-a-ports are currently located is ahigh-visibility location where the Airport development plan identifies permanent box hangars to be constructed. A portion of the property maybe needed for an aircraft staging area. While re-development of this location is being planned by Airport Staff, the current tenants whose leases have expired have been told they maybe allowed to stay on a temporary basis until an appropriate lot is available for them to move their portable hangars by mid-2010. The proposed lease amendment for each tenant provides amonth-to-month contract extension for a maximum nine (9) month period, with a provision fora 90-day notice to vacate once the alternate location is available. Airport Staff will continue to negotiate the relocation of the portable hangars as the Southeast Taxiway proj ect is constructed beginning mid-January 2010. The exact lotto which these hangars maybe relocated has not been finally identified; however, the plan is to move the port-a-ports to the extreme southeast corner of Airport property, with taxiway access. RECOMMENDATIONS: Airport Staff recommends approval of the amendment to an Airport Lease Agreement dated December 1,1989 between the City of Denton and each owner of a portable hangar located at Denton Airport. PRIOR ACTION/REVIEW (Council, Boards, Commissions) The Airport Advisory Board recommended approval at their meeting on January 13, 2010 by a vote of 7-0. EXHIBITS 1.Ordinance to amend the Airport Lease Agreement dated December 1, 1989 between the City of Denton and Tony Montgomery, owner of a portable airplane hangar located at Denton Airport 2. Amendment to original lease 3. Excerpt from DRAFT minutes of the Airport Advisory Board Respectfully submitted: Quentin Hix Airport Manager :lour d~cumerrtslordinances1101airp~rt montgomery lease amendment ordinance,dae QRDI.ANCE N~. A.N ~RD~NANE AI~THORI~IN THE CITY MANAGER T~ APPROVE A FIRST AMENDMENT T~ AN AIRPORT LEASE DATED DECEMBER t, 199 BETWEEN THE CITY OF DENTIN, TEAS AND TONY IVI~NTOMERY AT THE DENTIN MUNIPAL AIRPORT; AND PR~vIDIN N EFFECTIVE DATE. WHEREAS, certain real property upon the Denton Municipal Airport was leased to Tangy Montamer~ in an Airport Lease Agreement, and WHEREAS, the City of Denton and Lessee desire to amend the lease agreement, and WHEREAS, the Airport Board recommends approval of the Amendment; and WHEREAS, the 1t~ ~ounc~l deerris it in the publ~e 117terest to approve this Assignment of the Lease; N~~v, THEREFORE, i THE OC~N~L ~F THE CITY OF DENTON HEREBY ORDAINS: SE~TI~N 1. The Ity Manager or hls designee 15 hereby authorized to execute a First An~endn~ent to an Airport Lease Agreement between the pity of Denton and Tore Mantgainer~ at the Dentan Municipal Airport which is attached to and made a part of t~.is ordinance for aid purposes and to exercise ail rights and duties of the xt~ of Denton under the Airport Lease Agreement. SECTION 2. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the dad of , 1 MARS A. B~JRR~U~HS, MAYOR 1 1 s:laur ~~c~me~tslordir~ance~ll Olair~or~ montg~mery lease amendment ordinance.doc ATTEST; JENNIFER ~VALT~, CITY ~~TARY ~Y: ~.PPROVEI~ A T~ LEGAL FARM: AI~IT~. ~~JRE QTY ATTDRNE B~: . i FIRST AMENDMENT TO PAD SITE AIRPORT LEASE PETWEEN CITY OF DENTON AND TONY MONTGOMERY THE STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS COUNTY OF DENTON § This First Amendment to that certain Pad Site Lease which was first made and executed on December 1, 1989 at Denton, Texas, by and between the City of Denton, Texas, a municipal corporation, hereinafter referred to as "Lessor," and Tony Montgomery, hereinafter referred to as "Lessee". WITNESSETH: WHEREAS, the Lessor and the Lessee have requested an amendment of the Lease term and the City Manager and the Airport Advisory Board support the amendment of the Lease; NOW, THEREFORE, in consideration of the promises and the mutual covenants contained in this Agreement, the parties agree as follows: SECTION III. -TERM OF THE LEASE IS HEREBY AMENDED TO READ AS FOLLOWS The term of this lease shall be for a period of nine (9) months, on a month-to-month basis, commencing on the 1St day December 2009 and continuing through the 31St day August 2010, unless earlier terminated under the provisions of the Lease. SECTION X. -INDEMNITY OF THE LEASE IS HEREBY AMENDED TO READ AS FOLLOWS: Indemnity Lessee must indemnify, hold harmless and defend the Lessor, its officers, agents and employees, from and against liability for any and all claims, liens, suits, demands and/or actions for damages, injuries to persons (including death), property damage, (including loss of use), and expenses, including court costs, attorneys' fees and other reasonable costs, occasioned by or incidental to the Lessee's occupancy or use of the Leased Premises or the Airport and/or activities conducted in connection with or incidental to this Lease Agreement, including all such causes of action based on common, constitutional or statutory law, or based in whole or in part upon the negligent or intentional acts or omissions of Lessee, its officers, agents employees, invitees or other persons. Lessee must at all times exercise reasonable 1 precautions on behalf of, and be solely responsible for, the safety of its officers, employees, agents, customers, visitors, invitees, licensees and other persons, as well as their property, while in, on, or involved in any way with the use of the Leased Premises. The Lessor is not liable or responsible for the negligence or intentional acts or omissions of the Lessee, its officers, agents, employees, agents, customers, visitors and other persons. The Lessor shall assume no responsibility or liability for harm, injury, or any damaging events which are directly or indirectly attributable to premise defects, whether real or alleged, which may now exist or which may hereafter arise upon the Leased Premises, responsibility for all such defects being expressly assumed by the Lessee. The Lessee agrees that this indemnity provision applies to all claims, suits, demands, and actions arising from all premise defects or conditions. THE LESSOR AND THE LESSEE EXPRESSLY INTEND THIS INDEMNITY PROVISION TO REQUIRE LESSEE TO INDEMNIFY AND PROTECT THE LESSOR FROM THE CONSEQUENCES OF THE LESSOR'S OWN NEGLIGENCE WHILE LESSOR IS PARTICIPATING IN THIS LEASE AGREEMENT WHERE THAT NEGLIGENCE IS A CONCURRING CAUSE OF THE INJURY, DEATH, OR DAMAGE. NOTWITHSTANDING THE TERMS OF THE PRECEDING SENTENCES, THIS INDEMNITY PROVISION DOES NOT APPLY TO ANY CLAIM, LOSS, DAMAGE, CAUSE OF ACTION SUIT AND LIABILITY WHERE THE INJURY, DEATH, OR DAMAGE RESULTS FROM THE SOLE NEGLIGENCE OF THE LESSOR 0R ANY OF ITS EMPLOYEES, CONTRACTORS, OR AGENTS, UNMIXED WITH THE FAULT OF ANY OTHER PERSON OR ENTITY. ALL OTHER PROVISIONS OF THE LEASE AGREEMENT REMAIN IN FULL FORCE AND EFFECT. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year above first written. BY LESSOR: GEORGE C. CAMPBELL CITY MANAGER 2 ATTEST: JENNIFER wALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY . BY• BY LESSEE: TONY MONTGOM RY STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the o~`~ day of _ , 20 , by Tony Montgomery. Y [SEAL] duk1~ AHN MULIINS N tary Public, State of Texas ~y Comn~asbn E~reB M Commission Ex Tres j ~ ~ ~a~ ~y ~1R X013 y p ~ (or Notary Stamp) STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on the day of , 20 , by George Campbell, City Manager on behalf the City of Denton, Texas, a municipal corporation. [SEAL] Notary Public, State of Texas My Commission Expires (or Notary Stamp) 3 DRAFT MINUTES AIRPORT ADVISORY BOARD JANUARY 13, 2010 After determining that a quorum was present, the Airport Advisory Board of the City of Denton, Texas convened in a Regular Meeting on January 13, 2010 at 5:30 p.m. in the Airport Terminal Building, Meeting Room at 5000 Airport Road, Denton, Texas, at which the following items were consi ere BOARD MEMBERS PRESENT: Chairman, Mr. Brown, Vice Chairman Dr. Smith, Mr. Brewer, Mr. Clark, Mr. Pugh, Mr. Schofield, and Mr. Fykes arrived at 5:33P.M. BOARD MEMBERS ABSENT: None STAFF MEMBERS PRESENT: Quentin Hix, Airport Manager, Julie Mullins, Administrative Assistant. PUBLIC PRESENT: Jeff Soules, US Aviation Group, Mark Taylor, US Aviation Group, Rick Woolfolk, Tony Montgomery, Tenant, David Smith, Tenant, David Austin, Tenant, Chris Hill, Tenant, Damon Ward, Business Air Center. ITEMS FOR INDIVIDUAL CONSIDERATION VIII. Receive a report, hold a discussion and provide a recommendation to City Council requesting the City Manager, or his designee, to execute on behalf of the City of Denton an ordinance authorizing a first amendment to an Airport Lease Agreement dated December 1,1989, between the City of Denton, Texas and Tony Montgomery at the Denton Municipal Airport; and providing an effective date. Mr. Brewer asked if this item and the next item can be recommended in one motion? Mr. Brown asked if there is a difference between items number 7 and 8 and 9? Mr. Hix said the name on the lease is the only difference. Dr. Smith made a motion to consolidate items 8 and 9 since they are the similar to the previous lease amendment. Jeremy Fykes seconded the motion. Motion carried 7-0 Dr. Smith made a motion to recommend an Airport Lease Agreement extension for items 8 and 9. Mr. Brewer seconded the motion. Motion carried 7-0. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Airport ACM: Howard Martin, 349-8232 SUBJECT: Consider adoption of an ordinance authorizing the City Manager, or his designee, to execute on behalf of the City of Denton an Estoppel certificate with Justin State Bank as requested by Hangars Plus L.L.C./Tony Montgomery to accommodate a mortgage loan secured with the hangar constructed at 4800 Lockheed Lane; and providing an effective date. The Airport Advisory Board recommends approval (7- 0). BACKGROUND: The City of Denton has been requested by Justin State Bank (JSB) to provide an estoppel certificate (estoppel) that allows JSB to assume ownership of a hangar constructed at 4800 Lockheed Drive in the event of a default on a mortgage loan secured by the hangar owned by Hangars Plus L.L.C. Attached is an ordinance recommended for approval by the Airport Advisory Board to authorize the City Manager to sign the estoppel. Section IX of the original lease provides the terms and conditions under which a lender may assume the lease if a default occurs on a mortgage loan secured by the property improvement constructed as identified in the lease. This section of the lease follows: IX. SUBROGATION OF MORTGAGEE Any person , corporation or institution that lends money to Lessee for construction of any hangar, structure or improvement and retains a security interest in said hangar, structure, building or improvement shall, upon default of Lessee's obligations to said mortgagee, have the right to enter upon the Leased Premises and operate or manage said hangar, structure, building or improvement according to the terms of this Lease Agreement, for a period not to exceed the term of the mortgage with Lessee, or until the loan is paid in full, whichever comes first, but in no event longer than the Lease Term. It is expressly understood and agreed that the right of the mortgagee referred to herein is limited and restricted to those improvements constructed with funds borrowed from mortgagee, those improvements purchased with borrowed funds, and those improvements pledged to secure the refinancing of the improvements. RECOMMENDATIONS: The attached ordinance and estoppel certificate have been reviewed by the Legal Department and approved as to form. Staff recommends approval of the requested estoppel for Justin State Bank as lender to Hangars Plus L.L.C. I Tony Montgomery. PRIOR ACTION/REVIEW (Council, Boards, Commissions) The Airport Advisory Board recommended approval at their meeting on January 13, 2010 by a vote of 7-0. EXHIBITS: 1. Ordinance to authorize City Manager to issue estoppel certificate; 2. Estoppel Certificate; 3. Excerpt from Airport Advisory Board DRAFT minutes. Respectfully submitted: Quentin Hix Airport Manager s;laur dacumentslor~inance~l~ Olairport lase estoppel hangars plus.doc QRDINANE N~. AN ORDINANCE ~F THE Y~`~Y ~F DENTDN, TEAS APPRD~IN~r THE ISSUANCE ~F AN ESTOPPEL OERTI~'ICATE TO HANGARS PLUS LLB AND JUSTIN STATE ~AN~; ~ AND PROVIDING AN EFFEOTI~IE DATE. WHEREAS, on June ~aaG the pity of Denton, Texas thereinafter the "pity"} entered into that certain Airport Luse Agreement with Hangars Plus LL.B. ~"Hangars Plus"} at the Denton Municipal A~rpart dated June ~ODG ~"Lease"}; and wHEREA, Hangars Pius his requested the pity issue . Estoppel Oert~ficate with 1t and Justin State ~anlr ~`~J~"} to facilitate the refinancing of i~npravenaents constructed by Hangars Plus under the Lease; and WHEREAS, at its ~.eoting of January 13, 2a 10 the Airport Advi~ary ~aard recommended that the City ounell approve the Estoppel ertlfieate; and WHEREAS, the ~~ty ounc~l deems 1t 1n the pubic interest to rs~ue an Estoppel Oertiicate to Hangars Plus and JSB, which wi11 amend tlzc Lease and will further facilitate the refinancing of the in~proven~ents constructed by Hangars plus under the Lease; NOW, THE ~OLrNZL ~F THE CITY ~F DENTIN ORDAINS: SETI~N l . The pity 1Vlanager or his designee is hereby authorised to issue an Estoppel erticate to Hangars Plus and J~ that will amend the Lease, said lease being attached hereto as Exhibit A and made a part of this ordinance, substantially in the form of the Lease Estoppel, Exhibit ~ which is attached to and nude a part of this Ordinance far all purposes. SECTION This Ordinance sha11 became effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , a 1 a. SARK A. BURROUH, MAYOR ATTEST: JENNIFER wALTERS, OITY SERETAR~ ~Y: _ i .IOur D~cumentsl0rdir~ar~cesll~lA~rp~rt Lease ~sto~pel Hangars Ptus.~oc ~~~I~~v~~ To ~o~. ANITA B~RC~~S, CITY ~TT~R~~Y ~Y: i ~ i Exhibit ~ S;I~w' Dacument51~on1rac~1~~ .~r _ ,~w_ _ , _ _ _ ~ w._,._ AIP~~T L~AE AC~~E~~~"Y" ~~~L~L ~~ER1~T~~ i Thi ae Agree.ent is made and executed to be effective as of the ~ day of ~ the "Effect~~e Date' at Dento Texas b and ~ ~ y between e pity of Denton Texas, a n~unic~pal corporation, hereix~a~er referred to as "Lessor", and Hangar Plus L.L.Q., hereina~er referred to as'Lessee"~ wIT~T~ETH: wHEIi~A, Lessor now owns, consols and operates the Denton ll~u~icipa~ A.irpo~ the `Airport"~ in the pity of Denton, County of Denton, Mate of Texas; and wH~R~A, Lessee desires to lease certain premises at e Aixport and construct and rna~ntain an aircra~ hangar and related aviation facili~es thereon; l~~w, TI~REF~R~, for and cansideratior~ of the proses and the mutual covenants contained in this Agreement, the panes agree as follows: ~~'TTHSTA ~.NY LANCrL~ACx~ TO TIC C~TP.ARY H~R~A~'TEP. NTAIl~T.ED, T LANC~UA.C~ IlV PARAGRAPHS A TH~UC~H D ~F ~ ~CT~~N SHALL B~ BIl1TD. ~ . A. ~~"TPt 1~ ~F C~PF.R A TTY. The right to conduct aeronautical and related . ~ actidties for furnishing services to the public is granted to Lessee subject to Lessee agreerng. t. To furnish said services on a fair, equal a~.~ not ur~~ustly d~scrirninatory bases to a.~l users thereof; and Ta charge fair, reasonable and not unjustly discr~ninatory prices for each unit or service; prodded, that Lessee may be allowed to ~e reasonable and nandiscrinatory discounts, rebates, or other similar types ofprice reductions to volume purchasers. B. - Lessee, for itself, its personal representatives, successors, and assxg~.s, as a part of the consideration hereof, does hereby co~renant and agree as a covenant running nth e land that; 1. Na person on the grounds of race, religion, coXor, sex, or na~.onal origin shall be excluded from participation denied the benefits of, or be other~dse subjected to discrimination the use of said facilities; In the constction of any i~npravements on, over, or under such land and the i S - L. S f furnishing of services thereon, person an the grounds of race, religion, color, see, or na~onal origin shall be excluded firo~n participation , denied the benefits of, or otherv~ise be subs ecte to discrnnination; i . Lessee shall use the premises in can~pliance with all other requirenxents imposed by oar pursuant to Title 4, bode of Federal Regations, ~epar~nent of Transportation, Subtitle 0#~ce of the Secretary, dart 21, ondiscrhn.i- nation in Federally assisted pragram.s of the I~opart.ent of Transportation W F~ffectual of ~'itle vI of the civil fights Act of 194, as said regulations may be amended. . . $Ii~:., - 1yT~T ~AT,~x ]~TATN AT~~`R AFT, It i clearly understood bar Lessee that no right or privilege has been granted which ~auld operate to prevent any person, n or corporation operating aircraft on the Airport from perfarn~in any services on its own aircra~ with its own regular employees including, ~ but not linxited to, maintenance and repairs that it may choose to perform.. D. ~.~~}1~L-~C~i1t ~TVF,,,,,R~~~r~T. ~t ~ un~.erstoad and agreed that r~otlg berei~ contained shall be construed to grant or authorise the granting of . e~c~usi~re right ithi~. the ~nean~ng of ~~tle 4~ U. Appends ~ 1349. L. l . Lessor reserves the right to der develop or improve the landing area of the Airport as it sees fit, regardless of the desires or views of Lessee, and without interference or hindrance. Lessor shall be obligated to maintain and deep ~ goad repair the landing area of the Airport and all publicly owned facilities of the Airport, together with the rig~.t to erect and c~ntro~ a1I activities of Lessee iu thts regard. 3. During tine of war or national emergency, Lessor shall have the right to lease the landing area or any part thereof to the United- States overn~nent far military or naval use, and, if such lease is executed, the provisions of this inst~rurnent insofar as they are inconsistent with the provisions of e lease to the oven~.nent, shall be suspended. Lessor reserves the right to take any action it considers necessary to rotect the p aerial approaches of the Airport against obstrucon, together "ith the right to prevent Lessee from erecting, or permitting to ~e erected, any building or other structure on ar a.d~acent to the Airport which, in the opinion of Lessor, would ~t the usefulness or safety of the Airport or cons~.tute hazard to airera or .ta aircra~ navigation. 'The hangarlofhce~shop complex as currently proposed as provided in Section II.D, does not violate this provision. . `his Lease Agreement shall be subord~,ate to the provisions of any ei.stin or g Page ~ I 1 1 ~ r Development ontraet ith Lessor and pay Lessor for axl inspection services far grading and drainage improvements for the property. All above described impraven~ents to be constructed Lessee ire called the "Lessee's I~npraven~ents"~. The Lessee sha11 snb~nit a full drainage plan drawn up by Lessee's engineer as referenced above na later than 45 days from the date of execution the effective date} of this Lease Agreement. or~structian of Lessee's Improvement shah be connnenced no dater than ~7a days ~e "onunencen~ent Period"~ and completed na later than. 72a dais aftear the Effective Date the "~onstruct~on Period}'}. anstruction of Lessee's hprovements ~ considered cam~noed upon issuance Qf building permYt and construction of any portion of the proposed improvements. construction of Lessee's I~nprove~nents is considered complete upon the issuance of a certificate of ~ecupancy for the en~xe hangar, drainage and utility hprovement. addition, as a condition precedent to the effectiveness of this Lease Agreement, within days after the effective Date of this Lease Agreement, Lessee shall provide to Lessor ~i} a written estimate of the cast to construuct Lessee's Improvements prepared by a contractor who has demonstrated experience in the successful construction of improvements similar to Lessee's Improvements the "~or~stzuctian host ~sti~nate"}, ~ii~ a written scheduXe of construction to complete Lessee's Improvements, and viii} a written loan cam~nitrnent from. a lending institution providing far sufficient funding to cover the onstructian host ~sthnate ~cal~.ed "conditions Precedent"}. hauid the anditians Precedent not be met either ma p Y terminate this Lease Agreement by giv~.g the other party written notice, in which case this Lease Agreement shall be null and void and of no further farce and e~'ect. such ter~ainatran shall not prevent the Lessee frarn submitting new proposed Tease request at a later date, The pares may extend the ~a~day time period if ~ writing signed by bath parties. Lessee is not entitled to take possession of the Leased Premises under this Lease Agreen~.ent until the andi~ion Precedent have been fulfilled. Notwithstanding anything contained ~n thY Lease Agreement to the contrary, a failure to deliver full drainage plan. as referenced above within 4 days Ervin the date of execution of this Lease Agreement, a fai~r~re to commence the Lessee's improvements within the ommencem~ent Period or to complete the Lessee's Improvements within the construction Period mad', at the sole option and discretion of the Lessor, result ~ the hnmediate termination and cancellation of this Lease Agreement upon ~ days written notice of cance~ation to Lessee and in the case of the failure to submit a drainage plan the 4 days period, the Lease shall autvmaticaIly terminate without notice anal Lessee shall ~r~mediately remove itself frv~n the ~ . premises. ~ such case Lessee's rights under the Lease Agreement will iiimediately cease and be forfeited, and all of Lessee's pravement shall inunediately become theme pxoperty of Lessor at no cosh expense or other compensation paid by Lessor to Lessee; and Lessee shah immediately vacate the Leased Premises. ~ Lessor and Lessee by mutual agreement nay establish, on the Leased Premises, easements far public access on roads and taxiways. ~ i ~ 1 ~ r r I rentaUfee amount will due. A one percent ~Io} charge be added an the first of each subsequent month until the unpaid rentallfee payment is made. The ~r~iginal Rent for the Leased Premises shad be readjusted at the end of each one year period Burin the Lean Term on the basis af. the proportion that the then current United States ansun~.er Price Index for all urban consumers API-U} far the Dallas-Fort worth Bureau of Labor Statistics bears to the previous add month ~~OG index larch}, which ~v ~~9~-84 = Each rental adjustment, if any, shall occur an the 1 st day of Nove~.ber, begin,g in ~~5, and every other year therea~er on such date; The adjustments the. yearly rent shall be deterin.ed by ul~.plying the Original Rent by a fraction, the numerator of which is the index number for the last month prior to the adjustment, and the denominator of which is the index number applicable at the execution of this Lease .Agreement. If the product of this rnultiplicatian is greater than the original dent, Lessee shah pay this greater a~.ount as the y~eaxly rent un~l the tirne~ of the next rental adjustment as called for in this section. If the product of this multiplication is less than the Cg~.nal Rent there shall be no adjustment ~n the annual rent at that tine, and Lessee shall pay the previous year's annual rent until the time of the next rental adjustment as called for in this section. ~i no event shall any rental adjustment called for in this section result in an annual rent less than. the previous year's a~nuai rent, The adjustment shall be limited so that the annual rental payment determined for any given two-year period shall not exceed the annual rental payment calculated four the previous API adjustment by mare than twenty percent {~~°Io}percent. Tf the consumer price index for all urban consumers ~PI~U~ for the Dahas-Fart worth geographical region, as compiled by the U.S. Department of Labor, Bureau of Lobar Statists, is discontinued during the Lean Tenn, the remaining rental adjustments called far in this sedan shall be made using the formula set forth above, but by substituting the index numbers for ~ the onsu~ner Price Index~Seasonall}~ Adjusted pity Average Par All ~ten~s For All Urban consumers API-L~ for the index numbers for the PZ-~ app~cab~e to the DaTtas-Fort worth eographicat region, If both the API-U for ~ Dallas- Fort worth geographical region and the tT., City Average are discontinued during the Lease Term, the remaining rental adjustments called for in this section shall be made using the statistics of the Bureau of Labor Statistics of the United States Department of Labor that are most nearly cotnpaarabl to the CPS U applitable to the Dallas~Fort worth geographical region. ~f doe Bureau of Labor Statistics of the United States Depa~trnent of Lobar ceases tv exist ar ceases to publish. statis~cs concerns the purchasing paver of the consumer dollar during the Lease Tern, the remaining rental adjustments called far ~ this section shall be made using the most nearly ca~nparable ,statis~cs published by a retagni~ed financial authority selected byLessor, . RTC-~T ANTS C~~j.~~,;ATT~]N ~FJ.~'. A. .Lessee is granted the nonexclusive .privilege to engage ownerloperator activities ro~ridin the following aviation services: 1. . Lessee is granted the non-exclusive ri t to Page 6 i rent hangar and once space. Lessee, its tenants, employees, invitees and guests shall not be authored to oanduct any services not spec~~cai~y 1lted ~ this Lease Agreement. 'The use of the Leased Premises by Lessee, its tenants, e~,ployees; invitees or guests shall be limited to o~y dose private, com~nercia~, reta or industrial activities having tv do nth ar related to airports and avia~ tiara. except as specifically authorized this Lease Agreement, no person, business or corporation may operate a cammcrci., retail or industrial business upon the Leased Premises or upon the Airport Without a lease ~or license from Lessor authorizing such conercial, retail ar industrial activity. 'l'he Lessor shall not unreasonably Withhold authorization to conduct aeronautical or related services, B. TAT} , ~ - Lessee shall meet or exceed the follo~in standards; 1. Lessee shall rile nth the Airport Manager and deep current its mailing addresses, telephone numbers and contacts where it can be reached an en~.ergency. Lessee shall hle . the Airport Manager and beep current a fist of its tenants anal subleases, to include a list of aircraft and the aircra~'s . corresponding aircra~ iden~~ication number. . Lessee shall contractually require its employees and sublessees and sublessee's invitees} to abide by the terms of this Lease Agreement. Lessee -shall pra7nptly enforce its co~atractual rights in the event of a default of such covenants. 4. ~~t~~if~e_ 'T~xe~ n Lessee shall. meet aI~ expenses anal a eats ~ p connection with the use of the Leased Premises and the rights and p~.vileges herein granted} including the tirne~y payment of utilities, tapes, permit fees, license fees and assessments lawfully Ievicd or assessed. 5. Imo., Lessee shall co.ply Frith all current and future federal, state and local lames, rules and regulations which may apply to the conduct of business cante~nplated, including rules, regulat7.ans and ordina~n..ces promulgated by Lessor, and Lessee sha11- deep in effect and post in a prominent place all necessary andlor required licenses or permits. ~ntenance ~f ,prnn~*. Lessee shall ~e responsible far .the maintenance, . repair and upl~eep of all property, buildings, structures and in~prnve~nent, including the moving or elhuinaon of grass and other vegetation on the - Leased Premises, and shall. beep the Leased Premises neat, clan and ~ respectable condition, free from any abj ectzonal matter or thing, including .trash or debris. Lessee agrees not to utilize or permit v~aers to utilize areas on the Leased Premises which are located on the outside of any hangar or ~ i Jr the Aixport andlor activities conducted in connection with ar incidental to this Lease Agreement, including all such causes of action based on cv~nmon constitutional or statutory law, ~ ar based in whole or in part upon the negligent or ~.tentianal acts or omxssrons of Lessee, its officers, a eats ens to ees g ~ Y invitees or other persons. Lessee must at all tunes exercise reasonable precautions on behalf of, and be solely re onsible far, the safe of its tY officers, employees, agents, customers, visitors, invitees, licensees and other persons, a well as the~ar prapert~r, while in, an, or involved any way with ~ the use of the Leased Pren~ses. The Lessor is not liable or responsible far the negligence or intentional acts or omissions of the Lessee, its officers, agents, employees, agents, customers, visitors and other persons. The Lessox shall assume na ~responsibllity or liability for harm, in~ur~r, or any da~naging events which are directly or indixectly attributable to premise defects, whether real or alleged, which may now exist or which nay herea~er arise upon the Leased Premises, responsibility for all such defects being expressly assumed by the Lessee. The Lessee agrees that this indemnity provision applies to ali claims, suits, demands and actions arising from all premise defects or con tons. ~a~~ - 111 ~1 T r~r=l ~1 ~.1"~, A I ~,~1 l1 I ! f V I ~ I. .Lessee agrees to properly stare, collect and dispose of all che.icals and chemical residues; to properly store, confine, collect and dispose of all paint, including paint spray ~ the atmosphere, and paint products; and to co~npiy with all Focal, State and Federal regulations governing the storage, handling or disposal of such chemicals and paints. Furtherx the Lessee shall be solely responsible far all discharges, whether accidental or intentional, of _ any chemical and for the casts associated with the cleanup, remediation and disposal of said chemicals. 1. hauls Lessee violate any law, rule, restriction or regulation o~ the pity o~'~enton or the Federal Aviatloa~ Adminis~ratian, or any other regulatory authority, or should the Lessee engage in or per.it other persons or agents to engge ~ ac~.vities which could produce hazards or Page 9 i Lessor hereby agrees as follows; . ~ on a edit of a~. rent fees and erforrnance of ~ P ym a the covenants and agreements on the part of Lessee to be perfarn~ed hereunder, Lessee peaceably bald and enj oy the Leased Premises and all. rights and privileges herein anted. B. ~U~PT,TA„~' Lessor warranty and represents that in the establishment, eanstrucdon and operation of the Airlaar~,. that Lessor has heretofore and at this thne is complying with all existing rules, regulations, and criteria distributed by the Federal Aviat~o~r ~ditration, or any other govertunental authority relating to and including, but not limited to, noise abatement, rights and easements over adjoining and contiguous areas, aver-flight landing or takeoff, to the end that Lessee will not be leaf ly ~ia~ble far any action of txespass or similar cause of action by vlr~ue of any aerial operations of ad~o%ning property the course of normal take-off and landing procedures from the .Airpa; Lesser further warrants and represents that at all times during the Luse ~rer, or any renewal ar extension of same, that it wi11 continue to comply with the foregoing. It is expressly u~aderstood and agreed ~y and between Lessor and Lessee that this Lease Agree~.ent is subject to the following special terms a~ad conditions. . Because of the present thirty thousand {~0,0~~} pound continuous use weight bearing capacity of the taxiway, Lessee herein agrees to wit all aeronautical activity including Iandint take-off aid taxiing, to aircraft havin actual . g weight, mcludnag the weight of its fuel, of thirty thousand pounds ar less, until such time that the runway and designated taxiways ors the Airport have been improved to hand~,e aircraft of such e~ees~ive weights. It ~s furttler agreed that, based ors qua~i~ied eng~neer7ng studies, the weight restrictions d provisions ofthxs clause n~ayhe adjusted, up or down, and that Lessee agrees to abide by any such changes or revisions as such studies may dictate, '~Aeronautxcal activity" referred to this clause shall include any activity of the Lessee or its agents or subcontractors, and its customers and invitees, but shall not include those activities over which it has no solicitary part or control, such as an unsolicited or unscheduled or emergency landing. A pattern of violating the provisions of this section on two or more occasions shall be sufficient to cause the ~mr~ediate terminaflon of this enure Lease Agreement and subject Lessee to 1lability for any damages to the Airport that might result. vl~. A. ~ ~ Before commencing the construction of an rovements y p an floe Leased Premises including Lessee's hnprovements the "Lease ~provements~'~, Lessee shad sub~ait~ ~~ge ~1 1 ' 4 ~ ~f ~ i Dacurnentat~an, spec%f catian~, ar design war1~, to be approved the Lessor, which shall establish that the improvements to be built ar constructed upon the Leased Premises are an conformance with the overall size, shape, color, ua~i . ~ tY and design appearance and structure of the pragran~, established by Lessor an the Airpvr~. Z. Ali plans and spec.catians showing the ~ocatran upon the Leased Premises of the proposed construction and i~nprove~nents; . The estimated cost of such contructxon. N~o construction nay camence until Lessor has approved the Ions and speci~ica~.ans and the location of the Lease hnpravements, and the estimated costs of such construction. Approve the Lessor shall not be uuxeasonab~y withheld. documentary evidence of the actual cast of construction on public areas only such as taxiways} shah be delivered by Lessee to Lessor's City 14lanaer ~ron~time to tine as suet costs are paid by Lessee, and Lessor's pity 1Vlanager or designee is hereby authari~ed to endorse upon a copy of this Lase .Agreement filed ith the City secretary of Lessor such actua,~ amounts as he shall have found to have been paid by Lessee, and the findings of the pity Manager when endorsed by him upon said contract sha11 be conclusive upon ail parties for a1~ purposes of this Lease Agreement. No later than 3~ days after completion of the Lease hripravements, Lessee sham submit to Lessor deta~fed as built puns of the Lease Irnprove~nents and docuna,entary. evidence acceptable to Lessor e.dencing the total cost to cans~tuct the Lease Imprrovements ~"fast to Cartr uuct Lease Improvements"}. . ~ Lessee is hereby authorized to construct upon the Leased ~rernises, a~ its ow.~ cast and expense, buiidins~ hangars, and structures, that Lessor and ~,esee mutually agree are necessary for use in connection with the operations authorized, by this Lease Agreement, provided however, . Lessee shall Damply with ah ofthe re~u7xernents of ectlon VI~.A., above. such additional improvements shad be a park of the Lease Improvements. . :Except as ather,se provided in this Lease Agreerrtent, the Lase Ipraven~ents constructed upon the Leased Premises by Lessee shall. remain the prape~.y of Lessee during the Lease Term subject to the follaw~a conditions, terns and pro~isiort: I ■ RemnVa~ ~f ~3 111~~1~ No bu~dmg or permanent mature may be removed fra~n the Leased Premises. The Lease ~rnpravement sham automatically became the praper~y of Lessor absafutefy free, without any cost to Lessor, at the end of the Luse Term, or any e~tensian thereof. Pale S2 i 4 t a I f 14 . ~ The Lease r~nprovements shall ~mmed~ately become the property of Lessor at no cos expense, ar carnpensa~.on to Lessee shQUld Lessee fail to commence ar cornplete the Lessee's I~npravernents ~ithan the Cannnencement Pe~.od ar onstruct~an Period as pra~ided in ect~on ~.D, afth~s Lease agreement. f Should this Lease ~.gree~nent be canceled ar terminated before the end. of e Lease '~erxn, or extension thereof, Lessor shad. have the right to purchase all of the Lease ~rnprovements. ~.e event of a cancellation or term~nat~on, other then due to a default by Lessee that has not been cured as provided ~ belo, the purchase pace shad be e~ua1 tQ the mast recent value of the Lease hnpravements as determ~.ed by the Denton County Central appraisal District ~;`value of the Lease hnprovements"} reduced by ~1a for each year of the Lease Tenn that has expired as of the date of termination the `p'urchase Price7'}. hauxd the Denton Caen Central . Appraxsa,~ Drstnct not determine a separate value far the Lease ~nprovements, ar should such separate valuation be alder than tu~o years, then the purchase Price v~il~. be determined tang the Cast to Construct the Lease Ipravements reduced by 113 ~ for each year the Lease Term. has expired as of the date of termiYaatian. If the tern~inatian ar canceliat~on ~s due to a default Lessee that has not been cured v~ithin ~a days after written nonce of default to Lessee, then the Purchase Price as determined above shall be reduced a°Io. Harever, Lessee provides Witten notice to Lessor v~itlxin said 3a day cure penod that it 1s nnposs~ble to cure such default v~.thm said tune eria then ~e Lessor may consent to an extens~an of such ti,~ne to cure, which consent not be unreasonably Withheld. Any person, corporation or institution that lends money to Lessee for construction of any hangax, structure, building ar improvement and retains a security intexest said hangar, structure, building or improvement shall, upon default of Lessee's abli ations to . ~ s~.d rnartgaee, have the nght to enter upon the Leased Premr.ses and o crate or mans. e } ~ ~ said hangar, structure, b~uldrng or ~nproven~ent accardmg to the terms of this Lease 1~reeruent, far a period not to exceed the tern, of the rnortgage v~ith Lessee, ar until-the loan is paid in fu.11, whYChever cam.es first, but in na event longer than the Lease Terra, It is expressly understood and agreed that the right of the mortgagee referred to herein is limited and restricted to those irnpraven.ents constructed v~ith funds barro~ed frarn mortgagee, those improvements purchased nth the barroed funds, and thane ir~.pravements pledged to secure the refinancing afthe improvements. Lessor sh.al~ have the right to establish easements, at nv cost to Lessee u on the Leased Premises far the purpose of providing undergxau.nd utZhty services ta, from or across the Airport property or far the construction of pt~b~c facilities on. the ort. Page ~3 { . However, any such easements shall not interfere with Lessees use of the Leased ~re~nises and Lessor shall restore the propel to the original condition a is reasonable and practicable upon the installation of any uti.ty services on, in, over ar under and such easement at the conclusion of such cartraction. anstruction in or at the easement shall be ~v~npleted within a rea~sanable tine. Lessee expressly covenants that it will not assign this Lease Agreement, convey znare than flypercent ~5~°Io~ afthe interest ~ its business, through the sale ofstocl~ or otherwise, transfer, license, nor sublet the whale or any part of the leased ~rerni,ses for any ose, except far rental of hangar space or tieYdawn space for storage of aircra only, without the written consent of Lessor. Lessor agrees that it wild not unreasonably withhold its approval of such sale, sublease, transfer, license, ar assignment of the facilities for Airport related purposes; provided however, that no such assignment, sublease, txar~sfer, ~icen.se, sale or otherv~isc shall be approved ifthe rental, fees ar paym.ents, received ar charged are ~ excess of the rental or fees paid by Lessee to Lessor under the terms of this lease, for such par~.on of the Leased Premises proposed to be assigned, subleased, transferred, licensed, or atherwise~ The provisions of this Lease Agreement shall remain binding upon the assignees, if any, of Lessee. In the event of an assignment or sublease of this Lease Agreement the Lessee, Assignee ar Sub-Lessee will pay Lessor an administrative fee of $5~~ and shall also pay all of Lessor's dminisi~ative costs of processing such an assignment including, without li.itatxan, all reasonable attorneys fees, administrative oasts and Lessor's staff time associated with the assignment. A. ~~~RFI~ T1~~t ~R~; Regardless of the activities contemplated under this Lease Agreement, Lessee shall maintain continuously in effect at all times during the term afthis agreement, at Lessee's ~o~e expense, the foXlow~n min~nunl ~.nsurance coverages: 1. vnnnercial Public} general Liability covering the Lessee ar its company, its employees, agents, tenants and independent contractors, and its operations on the airport. coverage shalt be ~n an amount not less than 1,~0~,~~~ per occurrence and. prQVide coverage for prenziseslaperavns and contractual liability ADD where exposure exists, coverage for: productslcompleted operations; explosion, collapse and underground property damage: 2. Ali. risk property insurance an a replacement cast basis co~rering loss ar damage to all facilities used by the Lessee, either as a park of this ~green~ent or erected by the Lessee subsequent to this agreement. Under no cixcumstances shall the Lesser be liable far any damages to f~xxtures, merchandise or other personal property of the Lessee ar its tenants. business Autonzabile Liability to include coverage for OwnedlLeaed Autos Non- , awned Autos and Hired bars: gage ~.4 i ' f, s a ~ i Ifto Lessor, addressed to: pity tanager pity afDentan ~ 1 obey street Denton, Teas ~~~01 ~ to Lessee, addressed to: . Hangars Pius L.L., fir. Anthony ~Vlontgam President ~~4 Frenchtown Road Argyle, Texas 7~~ T~FAT)T~T~`T. The headings used ~ this Lease Agreement are intended for convenience of reference only and do not define ar limit the scope ar n~ean~g of any prov€sion of this ,Agreement, P, .C~~FRNT~IT~ T.AAN~7__~,T This Lease Agreement is to be construed in accordance with the laws of .e State of Texas and is fully performable in Denton bounty, Texas. exclusive venue for ar~y lawsuit tv enforce the terms ar conditions of this Lease Agreement shall be a court of competent jurisdiction i~ Denton. bounty, Texas, wAT~F1R. No waiver by lessor or Lessee of any default or breach of covea~.a~nt or term of this Lease Agreement nay be heated as a waiver of any subsequent default yr breach of the same ar any other co~renant ar term of this Lease Agreement. . N A~YFNC,'Y_ During all times that this Lease .Agreement is in effect, the parties agree that Lessee is and shad not be deemed an ae.t or err~ployee ofthe Lessor. M~A=i~,T ~ bane of the Parties shall be in default or otherwise liable for any delay in or failure of performance under this Lase Agreement if such delay or failure arises by any reason beyond their reasonable control, including any act of hod, any acts of the common enemy or terrorism, the e~en~ents, earthquakes, floods, fires; epidemics, riots, failures or delay . ~ransporta~.on or cow.cations. However, lacy of ids shall not be deemed to be a reason beyond a Parts reasonable control. The Parties will promptly inform, and cor~ssult with each other as to ar~y of the above pauses, which in their judgment nay ar could be the cause of a delay in the performance of this Lease Agreement, z~ I f 4 T~ IT~E ~EREDF, the pies h~.ve eee~te~ this lease Areee~.t as of the ~ffect~~e Date first ab~~e v~ritten, ~ITY~ DENTQ~, T`~A, ~~~R B~: ~~ARD 1V~, 1V1ANAE~ JENF~ LTER, I E~E7"A~ R ■ 'FRED T~ LEGAL Fri. EDP SEDER, ~IT~ A ~~NEY . d• f LEES ~ ~~..1 ~d~~ ~Q 1 r' t ~ ~ SATE ~F TEXAS ~ ~T'~ ~F ~EN~T~ ~ r ~ Ts ~nstra~►.e~.t vas acov~Ieded before me on the day of by . toward Martin, ~nteri~n pity Manager of the pity of Denton, ~a~, an ~e~al.f of said cia~ity. #~~~'YP~~~~~ ~AI~~ ~~V~~~~~~~ ~ r , ~ Nay ~~,~~ic, 8tat~ o~ ~"~xa~ ~ '~~RY F~JBL~, S'~.~.fiE ~F TEA ~ ~y Comm~~s~on ~xpir~~ ~~~t~~ ~~I~~ 1, ~~~4 TAE ST.TE OF TEA ~ ~~UNT ~F DE'~~[ Th~.s ~nstrr~nent vas acknowledged hefare mean the ~ day of ~O~ ~ Anthony Mont~on~ery~ a Tea corporation on behalf of said corporation. x ~~c~c N~TY P~, TA'~E DF T~~ ~ c~~ ~ ~ ~ • s~~ g ~~~aF~~ Comm. Fx~. 3-I X004 ~~~e ~1 i ~ e ~ ffff 1i . ~ ~ ,~d ~ ~ ~ ~ ~ ~ ~~1 ~ ~ ~ u~: ~ I W ~ ~ ~ . ~ ~ ~ W ~ ~ ~ o ~ ~ ~ W ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ C~ ~ r ~ ~ ~ ~ • c ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ . ~ ~ a ~ ~ i ~i ~ • ~ ~ ~ y ~ ~ nl~ ~ ~ ~ ~ ~ ~ - o~~ ~ ~i ~ ~c~ ~ ~ ~ ~ ~ o, . ~ ~ ~ ~ ~ ~ Fl~yy 11 ~ y ~ U~7 ~ _ ~ W F ~ ~ ~ ~ W ~ W ~w ~ ~ ~ ~ W ~ W ~ ..f~W~ ~~~W~ .:I W ~ ~tI ~ W Y W r-. ~ J ~L V? ~ .J ~ ] ~ J ~ L~ W W W ~ F- til HAW ~ 2,~F' J W~ ,Jp W~LsJ WLJ~(,7~ ~C7 ~Es3 ~~~t►J~~W W'`4~~~W ~ ~U~~~WC]1.rl~~x~a "f4.~~ ~mZ~~~ W ~~~~Dfl1fll~~~ :.lWd~~~=+~~~~~~ ~~~]~il1~W~~CQ~USW~J~~~~~~~ X~C7w a~ W~U~~~~~mw~p.W~ ~ W~ c~am~w~~~¢~Ww~~toa-~~~ ,J O~ ~L~ ~ UYVf ~~~~3 ~ W w~ o ~ aa~ ~ z ~ ~ ~ 1 ~z~z acv ~~o~?~_~~~~~~~~W~~~~WE-.w ~ ~ ~ I ~ w~~~ W~~~~~Q~~E- ~~~I.~IwzQF„~~~~~~'u~tno ~ 1 I ~ ~ h ~ o o„ x ~ ~ ~wv~Vm~+~aw~aaa~.c~~w~c~m~wwr~nr~n~~o~~VWit~~ ~ 1 I N ~ n ~ i~ ri it I~ q li Ir it ~i !i it ~I _If ~ B I! I! li ~I ~t q q it ~ ~ U I! 1l a 11 ~ ~ ~ it ~ lzN~~~iL^@UWWLtJI~wltl~~~ I!!I- ~ ~ I ~ ~ ~ o ~ ~ a v x w ~ -cww~ aa~ amp $ ~ ~ ~~~~~~~~~~IEll~lf~~ . ill~~Il~lli~ll~~l~{t L~~~E ~~~P~P~~L This L~~~~ E~t~~~al ~thi~ "~_,.~r~~rn~~t" d~t~~ F~~ru~r ' L~~nt~~, Te.~~ ~ m~r~i~i y, ~~t~r~~ into the +~it~r of a ~i ~~r~~r~t~~r~ ~h~ra~n~~~r ~~II~~ ~,~~~~r ~n►d H~~ art Elu~ I..L.►~. ~i~~r~ina~t~r ~all~~ L~~~~~}, ~n~ ~u~t~~ ,tats ~~nl~ h~ra' ~ ~~~ft~r~~ll~d" INITf~E~~fiH; 1N~EI~~A~~, L~~~~~ ~~~`rr~~ ~~tain ~ir~~~~in tf~r~~ h Lan~~r t~ r ~ir~r~~t hen ~r r~l~t ~ ~ . , , ~ ~ ~fir~~n~~ ~~n~tr~u~ti~n ~f ~ ~v~~t~Qn ~~~ilit~~~ I~~,~t~~ +~n the I~a~~~ ~ramC~~~ the Air art` an ~ ~ v11HE~~~„~, L~~~~r ra~~ir~~ the ~~rtia~ t~ ~~a~~t~ this ~ ~`~arr►~~t haf~r~ it vv' ' t~ L~~~~~, the ru~~~~~ ~f ~hi~h Zvi ~ ~ ili ~r~vi~~ ~~~~nnin~ ~ IC k~~ ua~~ t~ raf~~~t~+~~ the It~pr~v~rr~~nt~; t`~~W THEI~EF~F~E, ~n ~~r~~i~i~r~tiun ~f the pr~~i~~~ and rrrut~~l ~~v~n~~t~ nn s ' ~~r~am~r~#, the ~~rti~~ a~r~~ ~a f~ll~w~; +~t~i~~~~ ~r~ tf~i~ 1~~TILL "I ~~~~II~(l~I~~J A~ in this A►~r~~m~r~t~ tl~a f~ll~~vir~~ tare fell h~v~ the f~ll~~rir~ ma~~in ~ ~ L~ the 1~~~ from L~r~~~r t~ L~~~~~ ~~t~n~~~ ~~r~uant t~ #h~ Auth~ri~~ti~n, Lam; Thy ~►ir~~rt L~~~~ ~I~t~am~nt ~~r~rner~i~l ~~~rat~r Juna b ~~tw~er~ t>~~ ~it~ ~f ~~r~t~r~, T~~a~, ~ m►~~ici al ~~r ~r`~ti~n I~~~~r ~ . p ~ , H~t~~ar~ EI~~ LLB, a T~~~ti► Limit~~ Li~hilitY ~r~~~n}~, I~~~~~, L~~r~ C~u~urn~nt~: the ~~~~m~nt~ that ~r~ r~~w ~r har~~~k~r ~~~~ut~~ In ~~r~na~ti~~ v~l#!~ ~r a~ ~~~~rity fir the ~~~tir~ tats ~~nl~ lc~~n, in~l~~i~~ ~rithnut Cir~it~ti~n, ant ~r~r~i~anr~ n~t~~, I~~ri a~r~~m~~t~, ~~rvi~lrl~ ~~~11t ~~r~~~1~C1t~, ~uar~r~t~~~, ~~~ds ~f trust, ~~~urit~ ~~r~~r~ant~, ~~~rtl~l~~ti~ns, ~t~~ ~ffidavit~, ~r~ Thy laas~h~l~ ~~t~tas in ~1C tl~~t ~~rtain ~~r~~! ~f Ind ~it~~t~~ its the vUlLl~l~~~ t~IEIL ~J~V~~, Ah~tra~t l~urn~~r C~~nt~r~ ~~u~t~r, T~~~~, b~in~ ~ ~~rt ~f L~+nt gl~~~ ~I, ~~f ~uth~~~# Air~~rt ►~~~iti~rt, ~c~~iti~n ire tE~~ ~it~ of C~~nt~~a ~~t~t~n ~~+~ty, T~~aa, aa~~r~ir~~ t+~ tha pl~i# th~r~~f r+~~+ur~d~~ In ~~hinat , Elat ~~~~r~~ ~f aant~r~ ~~~r~ty, Ta~a~, ~~in~ rn~r~ ~~rti~ul~rf ~~~~ri~~~ i~ ~tta~ha~ F~I~i~it it►«t.", in~~r ~r~t~~ harai~ ~~r III ur ~ ~ ~ P P ~4RTi~LE - A~~EENiE(~T L~~~~r'~ ~~n~ent t~ rant'n i~ ~n~~ ~f Li+~r~~, L+e~~er nnns~nt~ t~ #I~~ gr~~ntir~~ end +a~i~tenne of li~n~ ~g~in~t L~~~~~'~ I~~~~t~~ld estate in the ~r~~~rty t~ ~~~ur+~ ~m~~nt~ du+~ un~~r the L~~n ~~~um~nt~, L~~~~ M~~i~i~~ti~n~ ~n+d,~~~r~~ellati~n~+ Thy L~~~~ gill r~~t k~~ rn~difi~d nr ean~cell~~ wit~~ut ,~u~tin tats E~nl~'~ pri~r~ritt~r~ ~+~n~~nt, In the ev~entth~ L~~~~ i~ ~~n~~ll~d ~r t~rrnina~tad pur~u~r,ttc~ Artiul~ II ~rlll ~n~ ~ny+uth~r~r~vi~i~n~ ~fth+~ Lea~~, ~h~ll have the rl~f~tt~ ~ith~r } ~~~ulr~ tl~~ ~n~ ~~~um~ .all the L+~~~~~~~ ri~l~t~ end ~hli~~ti~r~~ under the Lease, ar pr~~~nt t~ tf~~ L~~~~r ~ r~~l~~~r~~~t Le~~+ae an+~eptahl~ t~ L~~~~r Ire lt~ r~~~~n~~l~ ~~~r~v~l, t~ ~a~~me all the Lease~e'~ ~blig~ti~~~ un~~rtl~~ 1.~~~~, ~1u~tlr~ t~t~ ~~r~l~'a ~i ht to A uir L~ ~ ~ ~ t~, If th~r~ i~ ~ ~~~~ult un~~r tl~~ L~~n ~~~un7~nt~ ~n~ the ~~f~ult ~~~tlnu~ ~Ith~ut ~~in~ ~ur~d, then Justin Mate ~anE~ gill have the right to a~~quire the I~a~~held estate threugl~ f~r~~l~~ur~ ~r ~~~igr~l~~nt ~f I~~~~ in I~~u ~~r~ul~~ur~, ~1u~tln ~t~t~ ~~nl~'~ ~~~ui~itl~n the +~~~~h~ld ~~f~t~ vrrill r~+~t ~~n~titut~ ~ ~~f~ult +~r t~rmin~ti~n ~f the L~a~~, ,~u~tin Mate E~anl~'~ ~i+~ht~ ~~,,L,~~,~~,+e~,~, if Jn~tin Mate ~anl~ a~~uir~~ the laa~eh~ld ~~t~t~ ~t~t~d In ~~r~~r~~f~ ~ ~~~v~y th+~n it vtirii! ~u~~~~~ t~ the rights ~f L~~~~~ un~~r t~~~ L~a~~, in~ludir~g uvith~ut iirnit~ti~n, the right tQ e~erci~e any aptinns ex~~'~i~hl~ by tk~~ L~~~,~~~ und+~r the L~~~~. end in ~dditi~n, ~n~ n~twith~t~n~ing ~nythir~g ~~r~t~in~~ in the L~~~~ ~t~ the uuntr~ry, ~u~~in ~t~t~ ga~>~, as te~~ee under the L~~~+~, v~ill t7~v~ the right ~~i~ t~ ~~~~l~n tl~~ L~~~~, ~r t~ uhl~~~~ III ~r ~n~ pert ul' the i~~~~~ pr~rr►i~+~~ t~ a le~aee that i~ an~ceptahl~ t~ L~~~~r in its r~,~~~nable approval, ~r~vid~d, l~~~v~v~r, in tl~~ +~v~nt ~ ~~~ignrr~~nt ~f the Lame, Ju~tit~ ~t~t~ ~~n~ ~r the ~~~ign~~ shall pair alI of Le~a~r'~ ~dr~ir~i~tr~tiv~ ~~~~t ~r~~~~~ing ~u~h ~~~ignmant as +d+~~~rik~~d in p~r~gr~pl~ ~u~,~t~ ~~ni~'~ ~uti~~ ~~L~~~e~. L~~~Q~'~~ ~~~iu~ly~ l~~rx1~~~~r Erea~,h,, l1` Justin t~t~ ~~nl~ ~~~uir~~ the i~~~ehuld ~~t~t~ t~t~~ in p~r~gr~ph ~ ~h~~~, thin it uvlll ~~r ~hlig~ated t~ pay rent ~nri t+~ p~rf+~rrn L~~~~~'~ ~t~~r ~hligati~r~~ under tl~~ L~~~~, ir►cluding ~r~~ d~lir~~u~nt ~r r~nt~l er ether ~h~r~~~ ~~r~~ ~ r~~ult of the d~f~ult, ~i~ti~~ ~l• 11}~,~~~riel C~~fa,ult~, L~~~~r ~gr~~~ ~lu~tin Mate E~n~ vtirrltt~n n~ti~~ of all m~t~~`i~l defaUlt~ under the L~~~~. A materiel d~f~ult l~ any ~I~f~ult upon ~rf~i~h L~~~~r In1~~nda t~ tale ~~tl~n, ,~u~tir~ t~t~ ~~n~'~ ~i ht to ~ur~ ~~f~ult~. ,~u~tin t~t~ ~h~ll have the r`i~k~t t~ ~ur~ any ~r III ~~~~ult~ un~d~r the L~~~~~ ~na~rtunit~r t+~ ur M~,~~t~ry C~~ef~,ult~. In the ~~r~nt ~f ~ mat~ri~l t~~~~f~~}~ default ur~d~r the L~~~~, L~~~~r ,~gr~~~ t~ ~iv~ ~1u~tin t~t~ Eanl~ ~ ~~r'i~d ~~y~ t~ curt tf~+~ d~f'~ult I~~f~re ~~~rniain~ ~n~ ~f its r~~~~~i~s under the L~~~~~ ~'h~ fiat day +~f ti~~ nln~ty ~~y p~°ri~d i~ tl~~ ~~y ,~u~tin tats E~n~ ~~tu~lly r~neives the d+~f~ult n~ti~~, ~ ertunit t~ ~ur~ ~Menatar C~~f~ult~, Ire the event of a ~~t~t'l~l ~~r~rrr~r~e~ar,~ d~f~ult un+~~rthe Lea~a, L~~~~r ~I~~II t~~e n~ a~ti~n t~ ~~~r~i~~ its rem+adi+~~ und~rtl~~ I..~aae if ~vithin ~~rky-~i~r~ d~y~ f~ll~v~in~ r+~~~ipt bar Ju~tir~ t~t~ ~~n~ ~f ~ default r~nti~~~. ~ ~u~tin Mate ~~n~ h~~ ~ur~~ ~~y n~nTmun~t~ry d~i'~ult~ that ~r~ ~u~u~~tihl~ ~f h~in~ ~~~r~~ ~y it; ~~d ~1~~tin ,~t~t~ has ~~mm~n~~d III r~~~~~~~ry ~~ti~n t~ ~~t~in ~~~~~ti,i~~ ~f the ~r ~ ~p~rt~r, ,~~~t~n ~tat~ ~~Ii~entCy pr~~~~d~~~ t~ ~~t~ir~ ~~~~~~~i~n +~f the ~'r~p~rty, end ~r~~ r~r~t~l and ~th~r~r~aunt~ ~u~ ur~dert~~ L~~~~ pith ~I~ int~r~~ti, pan~lt«~ ~r~d a~th~r ~har~~~ that may ~i~~ ur~d~~t~~ L~a~~, h~v~ k~~~rt end ~antin~~ t~ h~ paid t~ L+~~~~r, ~ f'wJ~t,~. III r~~ti+~e~, r~~~~~t~, dam~n~~~ end ~thar ~~~mur~i+~~tian~ ~n~~r tf~i~ ~!~r~~mr~t ~h~l! k~~ in writing ~n~ Khali k~~ ~~~m~d to h~v~ duly given ~n ti~~ date ~f ~~rvi~~ if se~e~ p~r~~r~~lly~, er an the it is dep~~it~~ in the ~nit~~ ~t~t~s mail, ~y ~ir~t ~~I~ss mail, r~g~~t~r~+~ ~r aert~f~~~, p~~t~~e pr~p~a~, ~n~ prap~rly ~~dr~~~~a as f~l~~w~: L+~~~~r: ~it~ I~~r~ager pity ~f a~nt~r~, T~~a~ ~ E, M~I~ir►n+~y fit. F~~ I~~, L~~~~~~ I-l~n~~r~ E1~~ LLB Anth~r~y h~ant~~m~ry F~resi~~rtt Fr~r~~htawn F~~~~ Argyi~, T L~nd~r; ~lu~tin t~t~ Howard '~~~n~, F'r~~l~~r~t' Austin, T ~I . ,uh~r~~.~~.tl~n ~f L~~dl~rd'~ ~~~~~r ~uh~rdinate~ ~lI its li~n~ ~~d ~~aurity in,t~r+~~fi in ~~~h I~~~~~'a per~~n~~ pr~~~rt~ I~~~ted an the ~r~p~rty t~ tl~e lions ~n~ ~~~~rit~ i~t~r~st of ,Justin t,~t~ ~~n~ in ~u~h ~~rsan~~ pr~p~rty, ~1~. Sande ~ti~n Aw~rd~ end Hazard I ~ r~n~~ F~r~~~~d~. I~atwith~t~n~~n~ ~n~'thir~~ ~~ntain~~ ~r~ tf~~ L~~~~ to the ~~ntr~ry, the ~r~vi~i~ns oaf the ~,~~n ~~~~m~nt~ shall ~~v~rn ~n~ ~~ntr~l the ~n~ ~~~Il~,~ti~r~ of the pr~~~~~~ ~r~y ~~r~~~r~natian ~w~r~ ~r ~~~u~lty ir~~~r~r~~e ~~Il~y ~~y~bla with ragard t~ ~~n~~m~~#i~n Qr aas~ualty+ ~ ~ n '~~~t~, Ire the ~v+~nt of a ~~r~fii~t k~~tw~~~ the terrr~~ ~f the L~~~~ ~~d this agre~~m~nt, tl~~ t~rr~~ ~f this ~gr~~~~r~t will ~~r~trul, pr~vid~~ ~i~ t~rr~~ ~f the Lease which ~r~ r~~t in ~anfliat with this A~r~~r~~~t shall ram~~n in ~~II ~~r~~ ~r~+d effect, ~I~. ~in~in Ef~~~ `I-I~i~ ~~r~~r~~nt shall h~ ~ir~~ir~~ ~p~t~ th~~ und~ersi~n~~ ~n~ their ~u+~~~~~Qrs, ~~~igt~~, end I~~~I rapra~ant~tiv~, Yl~i~ ~~r~~~~r~t is inten~~~ t~ k~+~~~fit ~r~d may h~ ~r~f~r~~d by the L~~~~r, ~~~tir~ ~t~t~ ~anl~, and tl~~ir ~~~~~~~~r`~, assigns, and i~g~! rapr~~~nt~fia~~, This A~r~~rn~nt is ~i~r~n t~ ~~~~r~ the Lander, ~~~t~n ~t~t~ ~~n~, th~it ~~~~~s~~ars ~n~ ~~~ign~, t~ the i~t~rpretati~n ~f ~~rt~in L~~~~ ~r~r~isians ~f~~~ting ~l~a~tir~ tats ~~nl~'~ int~r~~t. It i~ r~~t int~n~~~i t~ ~~n~~r nor ~I~~ll it n~nf~r any right ~r ~~~~fit u~~n tl~~ L~~~~~ car any third perky ~th~~r th~r~ Justin ~tat~ E~n~, . . ~i~~ ~F ~EI~T~hi, TE~'a~, ~ ~ur~i~i~al ~arp~~ar~ti'~~ Ey~ ~E~R~E AM~~~Ll., ~Ity M~r~~~~r Att~~t; JENNIFER UVAL~'ER~, pity ~~~r~t~ry By: A~~ravad a~ I~g~1 firm; At~ITA BUR~E~~ pity AttQ~n~y r By; STATE ~F TE~A~ ~+~l~h~T'~ ~F ~ENT~h~ This in~trur~~~t w~~ ~~~r~~wle~g~~ ~~f~re rn~ Ey ~E~RE ~AM~~E~,~, pity M~r~~~~raf ~iT1~' ~F a~~T~~, TEA, a r~ur~ici~$I ~~r~~r~fii~n ~eh~ f ~f r~~~i~l~~! ~~~'~~r~tian~ h►I~t~ry ~uk~li~, ~tata of T~~~~ H~~~ar~ ~lu~, LLB, ~ T~~~ Limited I~i~k~ility ~~~~~~y ,j r~ Q; _ gym'''. t~~; ~t~th~ny M~nt~~rn~ry Jt~ F~r~~i~~rat THE STATE ~1= TEAS ~F aEt~1T~~1 EEF~F~~ ~~a tf~~ ur~d~r~i~~~~ n~t~~y ~abli~ this day ~~rannally ~pp~~r~d At~lTH~~h~~' M~~IT~~NIEF~~', ~n~~~ t~ ~tn~r~~ t~ tJ~r~u~l~ ~e~cripti~~ i~~~tity ~ar~d ~r ~th~r ~~~~urr~~r~t t~ h~ the p~~~~~ w17~~~ erne i~ ~u~~~ri~d t~ tl~e f~~e~~in~ i~~t~um~nt and a~~n~wi~~~~~ t~ m~~ ghat ~~~~ut~~i the ~~m~ ~r~~f~~nt ~r~d a~ ~h~ ~~t H~~~~~~ E~lu~, ~L~~, ~ 7~~~~ limifed li~E~ility ~~rnp~~~, and t~~ pur~~~~~ and ~ur~~i~~r~ti~~ th~~ein e~pr~~~~~. IVEI~ l~~#~E~ HAl~1C~ A~IC~ SAL ~F ~iTEf~E this J day ~f ~~1~~ JULIE I~IH ~ItllllHB ~ Cone:Ion Moy 2~~ Zo1~ ~~a E l~l~t~~r F~~~li~, Mate ~f T~~~~ l~T~~J T~►TE EAt`~ i ~ T~~~~ ~ r~+nr~ti~~ ~y~ H~U1IA►~C~ ~'~~~J, Fr ~~~r~t ~ .E.~~r THE T1~TE ~F TE~~ 4.. ~j~~~►~~~.~ ~r' k4~i~ r~ r +1 ~Te~ ~~5.~ 1 ~I~i +OT~1 ■ ' I ~1~I~ t II ~ ~ i~i5 ! ,~~~r~~~,« , ~~~1~~1. ~~1~~1~1 ~ ~EF~~E ME, the u~~~r~i~na~ ~~t~ry ~u~li~, Qn tf~i~ ~~r~~r~all~ ~~~~~r~c~ H~W}~~~~ ~'~~~1~, ~r~~~d thr~u~h ~~~~ri~ti~~ ~f id~ntit~ ~~r~ ~r ~fh~r ~~~~r~~~t t+~ ha th+~ ~~r~~~~ ~h~~~ ~~~~~rlk~~~ t~ fh~ f~r~~~ir~~ ir`r~frur~~nt ~~~n~~wl~~#~~~ t~ rri~ that ~h~ ~~~+~t~t~~ fr~~ the ~~t ~f J~Tlhl ~`~~,TE ~Al~l, ~ T'~~~~ ~~rR~r~tiQn, ~ its F~a~i~~nt , E~ ~r~~ ~~r ti'~~ ~~r~~~~ ~r,~ ~~n,~i~~r~ti~n fha~~in ~~~r~~~~~, ~11~~~J ~~~~F~ M~ HAh~[~ ~I~Q SEAL ~F ~FFi~Etf~i~ ~~~~f_ ~~~1~, ~ ~l~t~r~ ~~k~fi~, t ~ ~f T~~~~ w AF7~~ ~E~R~If~, ~ET~I~~I T~: JI~Tl~1 Y~TE ~A~f I , E~ ,~I~~tir~, T Exhibit A NI oertaln ~ of {and in ~ ~Na. sutwEr, ~roa W0. Derr6an Counbr, Ted ~ and t»titq a p~xt of Lot 1, e4ack 1 0! s~u~tt,~.at A~port l~dc~tian, an addttfort in ttw Cry of Derrtor~ D+nton Counl~r, Ts~tos, ao~aordkp ba tlw t'lat ltNrsof rnoardsd 'In Cabinet Pam 2~f, Pfat R+~a~ards d' DMnton C.aurr~, Tom, axe tfeirp mars partfcuiar~y descrfbed a foio~rx . 6iEX~JN~iG at a ad 1 f I" Iron road ~ sort far ff~ Northw~t oam~r of h~in c4~ai*d tna~t„ .utd in tits prw of Lxl~ad ~L,ane, Tram rrhkfi a catc~rebs m~arrument b~r~d far ~ fiarEfrrr+~ carrwr of ~ odd~ton bears Nora 19 D~egrsw 47 I~ntrb~ 04 Seaoncb 1iYrst, 184'!.57 ~ THt?~ S~a~tft D9 Q~Qry+s 30 27 9rconcie Eat xith the said ~ of lane, 70.00 fart bo a capped 1/2" kon rod srk far tha Nort#wast aarn+rr crt Iwdn d~rcrtbed para~ i THENCE Sautftt 04 p~ 03 I~iubM ~Si S~oancita ~4i~ar~„ Q0.00 f+~t ~ ~a a aafapsd 1 ~2' Ir~t rod set for ths~ 9s#t oottHr of Iwrsitr dsicrbsd parr~l: THF?K~ Hartfi 8Q 30 I~tub» 27 Sraa~nds Wsrk, 7'0.04 fMt ba n Dapped 1 f Z' loon rod sst far tt~~~ corner of herwn 4escxbed parcal; THQtCE Nart#r OOasl~pnw 03 29 Seaonde~ tart, 44.00 fe~rf bo the POINT OF BES~#!NC and 0.0!G4 Dons ai land. mas or I+M. FUQOD SUl ; 1 haw uToamir►sd tttis F ,180~ti14~ efitsot~w~da~ 3--34-4 Dsnbort, Comity, +nvas, C~onxrwnlb► atd trot trrap ifMdaabw that tt~ ~pnoper~y k tir~in 'Nat-Stracisd Zons X" dsfinsd or '~Irros ~riftl~Md ti0 b• 500-y~or ffoddplain` os ~~own in P~orwl 0~5 F' o~t t~ n'KJ~. This f140d gbat~iTilflt diQM trot ttlot t#N plUpKttiy and ~or •1tN stNCturert tttwsort 1YN bi frw firm ~ or flcaad d~arno~, on ra's oaoasiom. yrst~brr fia~od~r Dan and rrAl aaaur ands f hrl~#tb rnQy b+~ tr~or~d by rtan-macw or~ ratlrd Qaur+w. 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M .L.S, No. Erras: Tiw aunt a oMnt's rsprssrn~#lrsr ~ have ~ days from t#~ dobr ~ wrwy rra Iwusd do chaps Dry e~ or aty srrnn on ttH survey report, ~tber tt~it tlrr~ ha ~~agyir~d a~ partiwm~ i mur# . the survey a isrued, N~OiTE:.This wrvsry► siartoh ra p+rtanMd rkltout ttM fit .a< sotteduis A is 8 ar 'title Etkrder. l14TE: Bsafrpr Bawd an tt~ Tioooe Sbabe~ Plorts C~aordnab 5ysbrm N~ 83 Contra! Ts~ ?at, and C,P.S. d»srvativM. i :j • ~ ~I t ~ ~ ~ ~ 1 G'~~~P~R'~1!,~~~~~'~ ~e BOX i16 JQB 660314-01 ;UM, 2'X 76248 SATE: .5 28 4~ Q-482-6723 OFFIQE Dom: ~ A.C. . . D-482-3680 FAX ~};~W+ H.C.I. DRAFT MINUTES AIRPORT ADVISORY BOARD JANUARY 13, 2010 After determining that a quorum was present, the Airport Advisory Board of the City of Denton, Texas convened in a Regular Meeting on January 13, 2010 at 5:30 p.m. in the Airport Terminal Building, Meeting Room at 5000 Airport Road, Denton, Texas, at which the following items were consi ere BOARD MEMBERS PRESENT: Chairman, Mr. Brown, Vice Chairman Dr. Smith, Mr. Brewer, Mr. Clark, Mr. Pugh, Mr. Schofield, and Mr. Fykes arrived at 5:33P.M. BOARD MEMBERS ABSENT: None STAFF MEMBERS PRESENT: Quentin Hix, Airport Manager, Julie Mullins, Administrative Assistant. PUBLIC PRESENT: Jeff Soules, US Aviation Group, Mark Taylor, US Aviation Group, Rick Woolfolk, Tony Montgomery, Tenant, David Smith, Tenant, David Austin, Tenant, Chris Hill, Tenant, Damon Ward, Business Air Center. ITEMS FOR INDIVIDUAL CONSIDERATION XIII. Receive a report, hold a discussion and take appropriate action regarding an Estoppel requested by Hangars Plus L.L.C./Tony Montgomery to accommodate a mortgage loan secured with the hangar constructed at 4800 Lockheed lane. Mr. Brewer made a motion to approve the Estoppel agreement. Dr. Smith seconded the motion. Mr. Brown asked if Airport Staff approved this recommendation. Mr. Hix said yes if this form is approved by the City of Denton Legal Department. Motion carried 7-0 AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Economic Development/Downtown Development CM: George C. Campbell SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton, Texas, approving a grant application from Denton Community Theatre, Inc. from the Downtown Incentive Grant Program not to exceed $8,000; and providing for an effective date. The Economic Development Partnership Board recommends approval (6-0). BACKGROUND Applicant: Mike Barrow, Managing Director Denton Community Theatre, Inc. City Council approved the Downtown Incentive Reimbursement Grant Program on April 3, 2007, and allocated $50,000 to fund the program for fiscal year 2009-2010.One grant has been approved in FY 2009-2010, for $20,000, leaving $30,000 unencumbered. PROJECT: This project involves creating a new facade, awnings, bringing the entry up to American Disability Act standards, impact fees and utility upgrades. The Black Box Theatre will create much needed rehearsal and performance space for many of the live performance groups in Denton. These groups currently share time and space at the Campus Theatre as well as other venues in town, such as churches, the Civic Center and the Visual Arts Center. RE VEST: The applicant requested $36,475 from the Downtown Task Force. The Task Force recommended a grant of $16,660 to the Economic Development Partnership Board. According to the motion made, this amount should reflect the cost of facade improvements, awnings and signs, but the actual cost of those three items adds up to $14,660. The EDPB recommends a grant of $8,000 to City Council (6-0). The total cost of the project is $157,891. ELIGIBILTY: This project is eligible under the following criteria: • Compatibility of design in relation to other buildings • Proj ect compatibility with streetscape objectives • Proj ect compatibility in relation to Downtown Development goals • Proximity to Courthouse-on-the-Square PRIOR ACTION The Downtown Development Task Force reviewed the application on November 12, 2009 and recommended a grant of $16,660 to the Economic Development Partnership Board (EDPB). According to the motion made, this amount should reflect the cost of facade improvements, awnings and signs, but the actual cost of those three items adds up to $14,660. On January 10, 2010, the EDPB reviewed the application and recommends that $8,000 be awarded to this project (6-0). Agenda Information Sheet February 16, 2010 Page 2 EXHIBITS 1. Ordinance 2. Grant agreement 3. Exhibit A - Legal Description 4. Exhibit B - Grant Application 5. Exhibit C - Ariel map of property Prepared by: Julie Glover Economic Development Program Administrator Respectfully submitted: Linda Ratliff Director of Economic Development 2 s:laur docume~.~slordina~cesll X131 ~ east ~~cka~y ~Fd. doc ORDINANCE NO. AN ORDINANCE OF THF~ CITY COUNCIL OF THF~ CITY OF DENTON, TExAS, APPROVING ORANT APPLICATION FRONT DENTON COl1~C1NITY THEATRE FROIVI THE DOWNTOWN INCENTIVE REICBURSEENT GRANT PROGRAM NOT TO EXCEED $5,~0~; AND PROVIDING FOR AN EFFECTIVE DATE. WI~REAS, on April 2007, the City Council approved a DoWntoWn Incentive Reimburen~ent Program by Ordinance No.2007-072; end WI~REA, Denton Co~nuity Theatre applied for an grant; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON I~EREBY ORDAINS: SECTION ~ . The City Council of the City of Denton hereby approves the request frarr~ Denton Com,n~.unity Theatre for $5,000 firorrY the Do~ntoWn Inventive Reimbursement Crrant Prograrri~ SECTION 2. The City Manager, or his designee, is hereby authorized to execute the Agreement and to carry out the duties and reponlblllt~es of the C1ty, including the expenditure off' fund a provided in the Agrcernent. SECTION 3. This Ordinance shall become effective immediately upon its passage and appreval, PASSED .AND APPROVED this the day of , 2010. iVIARR A. BURROUGH, A~"OR ATTEST, JENNIFER ALTERS, CITY SECRETARY ~Yf APPROVED AS TO LEGAL FORNI~ ANITA SURGES S, CITY ATTORNEY ~Y; i r x. s:lour document~~contracts114~314 a hickory agr,do~ DDwNT~wN 1~E~NUREIVIENT GRANT IN~NTIVE REEI~NT This Downtown Reinvestment grant Incentive Agreement the "Agreement"} is entered iota by and between the City of Denton, Texas the "City"~, duiy acting herein by and through its ll~yor, and Denton on~nunity Theatre, inc., ~l~c}3 not-for-profit corporation the "~xran- tee"}, duly authar~ze to do business and in good standing in the State of Texas, duly aging here- in byand through its authorized off icer. WHEREAS, the City has adapted a resolution which provides that it elects to be eligible to participate in downtown reinvestment grant incentives and has adopted guidelines and criteria governing downtown reinvestment grant incentive agreements l~nown as the Denton Downtown Reinvestment xrant Incentive Program; and WHEREAS, on the 3~~ day of April, ~U~~, the City Council of Denton, Texas the "Ci Council"} adapted the Denton Downtown Incentive Reimbursement Prvgratn the "Pragra~~~, a copy of which is on Rile in the City of Denton Economic Development Offtce and which is in- corporatedherein byreference; and w~HEREAS, the Denton Downtown Incentive Reimbursement Program Policy consti- tutes appropriate "guidelines and criteria" governing downtown reinvestrnnent grant incentive agreements to be entered rota by the City; and WHEREAS, Grantee will be a tenant, as of the Effective Date has hereinafter derined}, which stags ~s a condition precedent, of certain real property, mare particularly described i~ Ex- hibit "A" attached hereto and incorporated herein by reference and made a part of this Agree- ment for all purposes the "Premises"} as of the Effective Date; and WHEREAS} on the Z~~ day of October, ~~~9, grantee submitted an application for rein- vestment with various attachments to the City concerning the contemplated use of the Premises the "A.pplicatian"}, which is attached hereto and incorporated herein by reference as Exhibit GG~~s. and WHEREAS, the City Council finds that the contemplated use of the Premises, the Con ten~plated Improvements has hereinafter defined} to the Premises as set forth this Agreement, and the other terms hereof are consistent with encouraging development in accordance with the purposes and are . compliance with the Ordinance and Program and similar guidelines and cri- teria adapted by the City and all applicable law; NOS, THEREFORE, the City and Grantee for and in a~asideration of the premises and the promises contained herein do hereby contract, covenant, and agree as follows: I, TERMS AND CONDITION OF REIM~URSEII~ENT i s,l~ur documer~tslcon~ll X1314 a hic~so~y agr. doc VII. . EVERA~IILTY In the event any section, subsection, paragraph, sentence, phrase or word is held invalid, illegal or unconstitutional, the balance of this Agreement sham stand, shall be enforceable and shall be read as if the parties intended at all times to delete said invalid section, subsection, para- graph, sentence phrase, or word, In the event that ~i} the term of the Reimbursement with re- spect to ar~y property i la~.er than allowed by law, ar iii} the Reimbursement applies to a broader classif~caticn of property than is allowed bylaw, then the Reimbursement shall be valid with respect to the classif cation of property abated hereunder, and the pardon of the term, that is allowed by law. VIII. ~wNER TANDIN grantee, as a parr to this Agreement, shall be deemed a proper and necessary party in any litigation questioning ar challengipg the validity of this Agreement ar any of the underlying ordinances, resolutions, ar pity council actions authorising same and Grantee shall be entitled to intervene in said litigation. I APPLICABLE LAw This Agreement shall be construed under the laws of the Mate of Texas and is fully per formable in Denton bounty, Texas. Venue for any action under this Agreement shall be in Dep~ tan bounty, . ENTIRE ArREEENT This instrument with the attached exhibits captains the entire agreement between the par- tieswith respect to the transaction contemplated in this Areerrzent. L ii r ~111LI~~J This Agreement shall be binding on the parties and the respective successa~s, assigns, heirs, and legal representatives. III. DUNTERPART This Agreement nay be executed in counterparts, each of h~ch shall be deerr~ed an arig, final, but all of which together shall constitute ape and the same instrument. Page 4 i s:lo~r dacumet~tslca~tractsll~l314 e ~ic~COry agr.dac VIII. ETIO~ ADD OTHER HEADII~~ section er ether headings contained in this Agreement are for reference purposes only and shad not affect . any v~ay the meaning or interpretation ofthis Agreement. N~ JOIlVT DENTURE Nothing contained in this Agreerent is intended by the parties to create partnership or j Dint venture between the parties, and any implication to the contrary is hereby disavowed. A.ENDII~ENT This Agreement may be n~odif~ed by the parties herete to ~ncl~zde other provisions ~rhich could have orihaally been included in this Agreement er to delete provisions that were not arig- inllynecessary to this Agreement. ~I. PORE AJEURE If}because of flood, fire, explosions, c1v11 dlt~rbances, stnkes, war, acts of prod, or other causes beyond the control of either Party, either Patty is not able to perform any or all of its obli- gations under this Agreement, then the respective Party s obligations hereunder shah be sus pended during such period but for na longer than such period of time when the party is unable to perform. This Agreement is executed to be effective ~ days after the executed date of the day of , 2~ I the "Effective Date"~ by duly authorized officials of the pity and Owner, PAED ADD APPROVED this the day of 1 CITE OF DENTON EORE AIIMPBEIIL, fTY MANAGER Page 5 i f ~ s;lou~ do~~ment~l~ontrac~sll D13 i~ a ~icko~y agr.~oc ATTEST; ~ENNIF~~t ALTER, CITY E~~.ETA~Y BY; APPR~LD A T~ LEGAL F~NI: ANITA BURS ~ CITY ATTORNEY 1V~IE BARRx ANAIN 1)~R.ECT~R ATTEST: BY; STATE ~F TEA ~ AUNTY ~F DENTON § Before me, the undersigned authority, ~ Notary Pubic in and for said Mate of Texas, on this day personally appeared George Caphell, pity Manager for the pity of Denton, I~no~vn to one to be the person mho signed and executed the foregoing instrument, and acknowledged to me that this in~trurnent was executed for the purposes and consideration therein expressed. Given under my hand and seal of office t~.i.s the day of ~Dl Notary public in and for the Mate of Texas ll~y otnmission Expires: gage 6 i s:lo~r dacume~ttslcon~ac~11~1314 e hic~~ry agr.~o~ STATE ~ TEXAS ~ AUNTY ~F I~~NT~N ~ Before rne, the undersigned authority, a Notary Pu~~ic in and for ~ State Qf Texas, on. this day personably appeared N~i~e Barrow, Managing Director, oven to nee to be the person mho signed and executed the foregoing intru~nent, and ac~rioledged to nee that this instrnent vas executed far the purpoe and consideration therein expressed. liven under my hand and eat of office this the ~ day of , ~ D. 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K; ?,','.!xx . .F E ~ ~ ' f~ i J 3` ~ k t i r ~ a3~o~7-~T..atw ..zF fm~ "rr ~ S ~ m- y I _ ¢ Hro x ' ~ ~:-T v~ E~,r~yp 1 TAY ID J~ !7 ' w d"„ ~ ~ 5 ~ y :J y F:} ~ AFB. x c{ r.y u s ~w^' n l-y r ~ ~ ~ ,.per. ~ y r y F _ .M F~~. ~u YN'4 y° f , ~ ~ 1 x- Y~ . . .d..... i „ _ - F+" . t 4 ~ .lY... =f:: ~.:I ii i I I This page left blank intentionally. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Electric Department ACM: Howard Martin, ACM 349-823 SUBJECT: Consider adoption of an ordinance of the City of Denton, Texas amending the Denton Municipal Electric Rate Ordinance contained in Ordinance No. 2009-218, solely as to Rate Rider ECA (Energy Cost Adjustment); providing for a repealer; providing for a severability clause; and providing for an effective date. The Public Utilities Board recommends approval (5-0). BACKGROUND: Amend Schedule ECA to the FY 2009-2010 Electric rate ordinance. The agenda materials are attached to the Closed Meeting Memorandum for this item on today's agenda. OPTIONS: Approve, modify or deny the proposed ordinance. RECOMMENDATION: Staff recommends approval. PRIOR ACTION: This item was presented to the Public Utilities Board on January 25, 2010. The Public Utilities Board recommends approval (5-0). FISCAL INFORMATION: No impact upon DME ratepayers. EXHIBITS: 1. Ordinance 2. PUB Meeting Minutes Respectfully submitted, Michael S. Copeland Utlllty Attorney ~~rnnon~nA„~,,mAnr~~TTr;rr;A~o~m;n;~rmr;,,,,~ch~,p,air;,,rr,,,,,,~;nrr~nirnFAh,,,~n,i~ ~nirnFron~rAn;,aAr~oTC_~ninFro omA,,,aA~nr~;,,~„~A_nn~_m~~„~ -yu.uu "Lc vu..uvo u , - ,.u.w .~.u~. 11 ..u--- - , ,..,v.,uvu ORDINANCE N0.2010- AN ORDINANCE OF THE CITY OF DENTON, TEXAS AMENDING THE DENTON MUNICIPAL ELECTRIC RATE ORDINANCE CONTAINED IN ORDINANCE N0. 2009-218, SOLELY AS TO RATE RIDER ECA (ENERGY COST ADJUSTMENT); PROVIDING FOR A REPEALER; PROVIDING FOR A SEVERABILITY CLAUSE; AND PROVIDING FOR AN EFFECTIVE DATE. The City of Denton, Texas sets rates for electric energy usage and electric services rendered for the ratepayers of Denton Municipal Electric that must take into account many financial factors, such as the price of energy, and these factors are constantly changing; the Public Utilities Board has received information and briefings during three of its meetings in the year 2010, and has fully discussed and now unanimously recommends to the City Council an amendment solely to Electric Rate Ordinance -Schedule ECA, in order to reflect and take into account the changed financial factors, the present needs of Denton Municipal Electric and the need to achieve rate stabilization for its ratepayers; NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The Schedule of Rates for electrical services as provided for in Chapter 26 of the Denton Code of Ordinances, is amended solely by substituting the attached Schedule ECA (Energy Cost Adjustment), in lieu of and in substitution for the previous Schedule ECA, which appeared at pages 38-39 of Ordinance No. 2009-218, signed and approved by the Council on September 22, 2009: ELECTRIC RATE SCHEDULE Pages Schedule ECA -Energy Cost Adjustment 38-39 SECTION 2. All ordinances or parts of ordinances in force when the provisions of this ordinance become effective which are inconsistent, or in conflict with the terms or provisions contained in this ordinance are hereby repealed to the extent of any such con ict. SECTION 3. If any section, subsection, paragraph, sentence, clause, phrase or word in this ordinance, or application thereof to any person or circumstances is held invalid by any court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this ordinance, and the City Council of the City of Denton, Texas, hereby declares it would have enacted such remaining portions despite any such invalidity. SECTION 4. The amended Schedule ECA -Energy Cost Adjustment is attached hereto as Exhibit "A" and is incorporated herewith by reference for all purposes. SECTION 5. This ordinance and the rate herein adopted as the amended Schedule ECA -Energy Cost Adjustment shall become effective, charged, and applied to the electric services rendered by Denton Municipal Electric and all energy usage pertaining to this rate, by customers of Denton Municipal Electric, on or after March 1, 2010, and a copy of said rates shall be maintained in the office of the City Secretary. PASSED AND APPROVED this the day of , 2010. MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY By: SCHEDULE ECA ENERGY COST ADJUSTMENT (Effective 03/Ol/10) The Energy Cost Adjustment (ECA) rate shall be set by the Public Utilities Board (PUB). The ECA rate shall be reviewed on a monthly basis and adjusted as defined below to recover the variable cost of energy delivered to customers. Variable energy cost includes the variable cost of Texas Municipal Power Agency (TMPA) energy (excluding the portion of TMPA's energy charge associated with fixed costs), the variable cost of purchased energy (excluding demand payments or fees for services), and fuel costs. ENERGY COST ADJUSTMENT BALANCING ACCOUNT CALCULATION The ECA Balancing Account shall be calculated using the following formula: ECA Balancing Account = (Actual plus Proj ected ECA revenue) - (Proj ected Energy Cost) where: Projected Energy Cost = (Actual plus Projected cumulative cost of fuel) +(Actual plus Projected cumulative variable cost of TMPA energy) + (Actual plus Projected cumulative variable purchased energy cost). The General Manager, Denton Municipal Electric (DME) or his/her designee shall calculate the ECA Balancing Account balance monthly. In the event that the ECA Balancing Account balance calculated during the last month of each fiscal quarter (December, March, June, and September) is greater than or less than zero dollars ($0) by $5,000,000 or more during the next quarter, the General Manager, DME orhis/her designee shall recommend to the PUB an ECA rate adjustment sufficient to recover/return any under/over collection, and maintain DME in a financially sound position. The PUB shall consider that recommendation and may adjust the ECA rate for the quarter immediately following as necessary to maintain DME in a financially sound position. ENERGY COST ADJUSTMENT CALCULATION ECA = [(Proj ected Energy Cost) + (ECA Balancing Account)]/(Proj ected kWh sales) ENERGY COST ADJUSTMENT CHARGE The Energy Cost Adjustment Charge shall be based on actual kWh consumption during the billing perlo . Energy Cost Adjustment Charge = kWh x ECA rate EXTRAORDINARY CIRCUMSTANCE ECA RATE ADJUSTMENT In the event that the ECA Balancing Account balance calculated for any month is greater than or less than zero dollars ($0) by $10,000,000 or more during the next month, the General Manager, DME or his/her designee shall recommend to the PUB an ECA rate adjustment sufficient to recover/return any under/over collection, and maintain DME in a financially sound position. The PUB shall consider that recommendation and may adjust the ECA rate for the month immediately following as necessary to maintain DME in a financially sound position. END OF THE FISCAL YEAR ADJUSTMENT At the end of each fiscal year, if the amount of the ECA Balance exceeds $5,000,000, then the PUB shall consider whether or not any amount of the ECA balance over $5,000,000 should be transferred to the Electric Rate Stabilization Fund for the primary purpose of paying down the City of Denton's debt related to the TMPA. In such case, the PUB shall make their recommendation to the City Council for consideration. Any such amount of the ECA balance transferred to the Electric Rate Stabilization Fund shall subsequently be used for customary Rate Stabilization purposes or to pay down the City of Denton's debt related to the TMPA pursuant to decision by the City Council and following consideration of any recommendation made by the PUB. DRAFT MINUTES PUBLIC UTILITIES BOARD January 25, 2010 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas was present, the Chair of the Public Utilities Board thereafter convened into an open meeting on Monday, January 25, 2010 at 9:02.m. in the Service Center Training Room, City of Denton Service Center, 901-A Texas Street, Denton, Texas. Present: Chair Dick Smith, Bill Cheek, Phil Gallivan, Bill Grubbs and Barbara Russell Ex Officio Members: George C. Campbell, City Manager Howard Martin, ACM Ut111t1eS Absent: John Baines and Randy Robinson, both excused CONSENT AGENDA: The Public Utilities Board has received background information, staff's recommendations, and has had an opportunity to raise questions regarding these items prior to consideration. 1) Consider recommendation for amendment of Electric Rate Ordinance, ECA Rate Rider. Board Member Russell moved to approve Item 1 with a second from Board Member Grubbs. The motion was approved by a 5-0 vote. The meeting was adj ourned by consensus at 9:54 a.m. CITY OF DENTON CITY COUNCIL MINUTES January 19, 2010 After determining in Open Session that a quorum was present, the City Council convened in a Closed Session on Tuesday, January 19, 2010 at 10:30 a.m. in the Council Work Session Room at City Hall. PRESENT: Mayor Burroughs, Mayor Pro Tem Kamp, Council Member Engelbrecht, Council Member Gregory, Council Member Heggins; Council Member Mulroy and Council Member Watts. ABSENT : None 1. Closed Meeting: A. Consultation with Attorneys -Under Texas Government Code Section 551.071 and Deliberations regarding Personnel Matters -Under Texas Government Code 551.074. 1. Consultation with the City's attorneys regarding legal issues associated with personnel matters involving the city manager, city attorney, Clty audltor, and/or the municipal court judge where public discussion associated with these legal matters would clearly conflict with the duty of the city's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary of Professional Conduct of the State Bar of Texas. Discuss and deliberate the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal and/or hear a complaint or charge involving the city manager, city attorney, internal auditor, and/or the municipal court judge. B. Consultation with Attorneys -Under Texas Government Code, Section 551.071. 1. Consultation, discussion, deliberation, and receipt of information from the city's attorneys involving legal matters relating to possible annexations of property into the City of Denton where public discussion of these legal matters would clearly conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. Following the completion of the Closed Meeting, the Council convened in a Special Called Work Session at 12 noon. 1. Receive a report, hold a discussion and give staff direction regarding issues concerning areas under consideration for annexation, including the costs related to providing municipal services. Mark Cunningham, Director of Planning and Development, presented information on the cost to provide services relative to the areas under consideration for annexation. He provided information on provisions of services that included water/wastewater and fire/EMS. City of Denton City Council Minutes January 19, 2010 Page 2 Council Member Watts stated that during the first public hearing comments were received about accessibility to private roads in one of the annexation areas by the fire department. Fire Chief Chadwick stated that after the public hearing, staff drove the roads in question with the fire trucks and could access specific homes in the area. Only the largest truck would have a problem and that truck would not be used for the structures in those areas. Cunningham continued with services that would be provided in terms of parks and recreation. Council Member Watts stated that PAAI did not include the mowing of roadways. Cunningham stated that the PAAI proposed annexation would not jump across the street to the rights-of way to provide mowing. Cunningham presented information on roadway maintenance in the proposed annexation areas. Mayor Burroughs asked about the ownership of the roads. He questioned if they would be county owned or how it was structured and who had the responsibility of maintenance. City Attorney Burgess stated that there were two ways to deal with the roads. One was to obtain a fee interest in the real property. The second was a dedicated usage of the right-of way as a roadway and the city accept the dedication of the property as a roadway. Council Member Watts asked about maintenance costs and how the per mile cost compared to the current budgeted maintenance cost per lane mile in the city. Jim Coulter, General Manager-Water, stated that he had contacted the County maintenance office and had adjusted the formula for mowing, etc. Cunningham reviewed information concerning infrastructure improvements; code enforcement; library services; community development; and solid waste. Bryan Langley, Director of Finance, reviewed how the cost estimates were derived. The basis of the assumptions was that there would be no major development in the areas that were annexed. He emphasized that the actual numbers would most likely be different from the estimated numbers presented at this meeting. Council discussed the merits of the figures presented and the associated assumptions. Following the completion of the Work Session, the City Council convened in a Special Called Regular Meeting in the City Council Chambers. 1. PUBLIC HEARING A. Hold the second of two public hearings to consider and discuss, under the annexation procedures for areas exempted from the municipal annexation plan, the Involuntary Annexation, Service Plan and Non-Annexation Development City of Denton City Council Minutes January 19, 2010 Page 3 Agreement for approximately 7,480 acres, located in the City's Extraterritorial Jurisdiction (ETJ), Division 1, and provide staff appropriate direction. The proposed annexation is in multiple ownerships, and consists of fifteen (15) distinct areas, as presented in Exhibit 1. The 15 areas are identified and generally located as follows: (1) PAA 1:1,171 acres, located on the South side of Jim Christal Road; north side of Tom Cole Road; west of Masch Branch Road; (2) PAA2 South: 1,472 acres located on the South side of FM1173; north of W. UnlverSlty Drlve; west of I-35; (3) PAA3: 1,075 acres, located on the South side of Ganzer Road; north and south of Barthold Road; north of FM 1173; west of I-35; (4) PAA4: 1,555 acres, located on the South side of Milam Road; north of Loop 288; east of I-35; (5) DH-l: 315 acres, located on the East of H. Lively Road; south of FM 2449; west side of John Paine Road; (6) DH-2: 258 acres, located on the South side of University Drive; west and east sides of Thomas J. Egan Road; north of Jim Christal Road; west of Masch Branch Road; (7) DH-3: 421 acres, located on the South side of Spring Side Road; north, south and west of Corbin Road; west of I-35; (8) DH-4: 347 acres, located on the East side of Bonnie Brae Street; west of Fort Worth Drive; east and west of Vintage; (9) DH-5: 307.11 acres, located on the East side of Fort Worth Drive; west of Country Club Drive; north of Bush Creek Road; (10) DH-6: 9 acres, located on the East side of Teasley Lane; north of Hickory Creek Road; west of Lipizzan Court; (11) DH-8:29 acres, located on the West of Old Edwards Road; north and south of Edwards Road; (12) DH-10: 87 acres, located on the South of East McKinney; east and west of Lakey Circle; (13) DH-11: 388 acres, located on the Southeast of the intersection of Mayhill Road and McKinney Street; (14) DH-13 : 16 acres; located on the West of the intersection of N. Locust Street and Bobcat Road; south of Chaparral Road; and (15) DH-14: 26 acres, located on the South side of Robinson Road; east of Teasley Lane. Mark Cunningham, Director of Planning and Development, stated that this was the second of two required public hearings for the annexations. The first public hearing was held on January 12, 2010. He presented the following areas of discussion: annexation requirements background; annexation goals; determination of potential annexation areas; the requirements of an annexation plan; the requirements of a service plan; immediate services that had to be provided such as fire/EMS, solid waste, parks, streets, water services, wastewater services, operation and maintenance services; agricultural, wildlife and timberland use non-annexation agreements; the annexation schedule; notices that were provided residents and area school districts, railroads and companies; and staff recommendations for areas of annexations. The Mayor opened the public hearing. The following individuals spoke during the public hearing: Don Wolmack, 6 Highview Court, Denton, 76205 -opposed Kent Wolf, 7254 Barthold Road, Denton, 76207 -opposed Melissa Vargas, 6954 Ganzer Road, Denton, 76207 -opposed Ray Roberts, 2136 Chinn Road, Denton, 76207 -opposed Lee Fitch, 7202 Barthold Road, Denton, 76207 -opposed City of Denton City Council Minutes January 19, 2010 Page 4 Deborah Cottle, 480 Hickory Creek Court, Krum, 76249 -opposed Emrie Wilkes, 4045 South Bonnie Brae, Argyle, 76223 -opposed Bernice Patterson, 6488 Jim Christal Road, Denton, 76207 -opposed Janelle Burch, 4478 Country Club Road, Denton, 76210 -opposed Billie Glosser, 990 Tom Cole Road, Denton, 76207 -opposed Larry and Ladonna Pockrus, 9080 Wolf Run, Ponder, 76259 -opposed Mrs. Grady Baker, 33472 N. Masch Branch Road, Denton, 76207 -opposed Bent Carter, 2043 Chinn Road, Denton, 76207 -opposed Brenda O'Shel, 4647 S. Bonnie Brae, Argyle, 76226 -opposed Denise Eberhardt, 6829 Ganzer Road, Denton, 76207 -opposed Janet Ross, 4690 Miller Road, Krum, 76249 -opposed Comment cards were received from: Richard Burch, 4478 Country Club Road, Denton, 76210 -opposed Larry Green, 2388 Lovers Lane, Krum, 76249 -opposed Charles Hackett, PO Box 998, Argyle, 76226 -opposed Danny Van, 2499 Lovers Lane, Krum, 76249 -opposed Lisa Eaton, 2519 Lovers Lane, Krum, 76249 -opposed John Chutkowski, 6957 Ganzer Road, Denton, 76207 -opposed David Patterson, 6488 Jim Christal Road, Denton, 76207 -opposed Malcolm and Linda Ellison, 3602 N. Masch Branch Road, Denton, 76207 -opposed Sidney Baudonin, 6920 Spring Valley Way, Fort Worth, 76132 -opposed Don Logan, 4269 S. Bonnie Brae, Argyle, 76226 -opposed Ann Stults, 2199 Underwood Road, Denton, 76201-opposed Dana Miller, 4575 Miller Road, Krum, 76249 -opposed Linda Cole, 6376 Jim Christal Road, Denton, 76207 -opposed Tom Hook, 721 West Windsor, Denton, 76205 -opposed Nelda Hackett, PO Box 998, Argyle, 76226 -opposed Leslie Buell, 6778 C. Wolfe Road, Ponder, 76259 -opposed Shawn Sloan, 2000 Lovers Lane, Krum, 76249 -opposed Richard LaSalle, 2055 Chinn Road, Denton, also spoke in opposition. The Mayor closed the public hearing. 2. ITEMS FOR INDIVIDUAL CONSIDERATION Resolution No. R2010-004 A. Consider approval of a resolution of the City of Denton, Texas regarding the term of the employment agreement, dated June 5, 2007, as amended on December 1, 2009, between the City of Denton and the City Auditor, said term providing for automatic renewal of one year unless a written notice of no less than thirty days is provided prior to March 1, 2010; and declaring an effective date. City of Denton City Council Minutes January 19, 2010 Page 5 Council Member Gregory motioned, Council Member Engelbrecht seconded to approve the resolution. On roll call vote, Council Member Engelbrecht "aye", Council Member Watts "aye", Council Member Mulroy "aye", Council Member Gregory "aye", Council Member Heggins "aye", Mayor Pro Tem Kamp "nay" and Mayor Burroughs "aye".Motion carried with a 6-1 vote. B. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no continuation of Closed Meeting. C. Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no official action on Closed Meeting items. With no further business, the meeting was adjourned at 2:15 p.m. MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES February 1, 2010 After determining that a quorum was present, the City Council convened in a Work Session on Monday, February 1, 2010 at 11:00 a.m. in the Council Work Session Room at City Hall. PRESENT: Mayor Burroughs, Mayor Pro Tem Kamp, Council Member Gregory, Council Member Heggins, Council Member Mulroy and Council Member Watts. ABSENT: Council Member Engelbrecht 1. Receive a report, hold a discussion, and give staff direction regarding the Downtown Implementation Plan. Brian Lockley, Development Review Committee Administrator, presented an update on the progress of the Plan. He reviewed the DTIP study boundaries, the project schedule, public involvement options, stakeholder interviews, downtown assessment findings, the Jacobs presentation, and recommendations from the Planning Department. The boundaries indicated two study areas -one for the entire district and one for architectural design guidelines. A timeline for the project schedule was also reviewed. Public Involvement included many different interest groups involved in land uses, architecture, parks/open space, etc. Staff met with businesses, businesses provided brochures to customers, posters were displayed, tent cards for restaurant tables were made available, and website information was available along with stakeholder interviews. The Planning Department also hosted public meetings for discussion on the proposed project. The downtown assessment looked at all different aspects of the downtown area such as solid waste, architecture, streets, and parking. Rick Leisner, Jacobs, presented information on different components of the study and an update on those components. In terms of public input, Jacobs held stakeholder interviews, attended the monthly Downtown Task Force meetings, conducted on-line stakeholder interviews and held public meetings. Leisner reviewed the questions asked for the study and the preliminary responses. The Downtown Assessment Findings looked at existing land uses. Leisner indicated that they would be using Quakertown Park in the percentages. An examination of existing parking showed more private parking in the area as opposed to public parking. They also studied existing streets and linkages. A discussion on traffic moving through the downtown area resulted in a suggestion to encourage "through" traffic to use Carroll or Bell. Jacobs studied the existing pedestrian sidewalks and found a variety of different conditions with narrow sidewalks and no sidewalks in the top category. The existing solid waste procedures were reviewed with a plan developed to look at a series of options to screen and group the dumpsters. In terms of the downtown architecture, they found a significant number of quality buildings. Parks and open spaces were looked at in terms of the edges of the parks and connectivity; City of Denton City Council Minutes February 1, 2010 Page 2 Council discussed the viability of having two areas in the plan and felt it might be better to include design standards in the entire area. Council Member Heggins asked if the minority businesses and residents had been notified of the public meetings. Lockley stated that they had notified all three Chambers of Commerce. The Neighborhood Planner would be notifying all of the area groups. Lockley stated that there was a concern regarding future development in the area and related parking. The Development Code currently did not provide for developments in the Central Business District to provide any additional parking. One recommendation was move forward to suspend that requirement of the Code which would remove developments in the downtown area from not providing parking. Staff was recommending that section of the Code be removed. At the end of the process, staff would bring forward parking ratios that would be adequate for all development in the downtown area. Mayor Burroughs asked about an anticipated end date. Lockley stated that it would be approximately April before it was completed. Mayor Burroughs stated that the final report would have recommendations for parking only for property located in the area of the plan. The entire Central Business District would be a much larger area than the study area. Council Member Mulroy stated that staff would return with a study of the full area after completion of the downtown study. Lockley suggested just looking at the study area at this time with the opportunity for variances at the Planning and Zoning Commission if a development was proposed outside the core area. Following the completion of the study, the entire Central Business District could be incorporate . Consensus of the Council was to remove the restrictions for all of the Central Business District which would include the area involved in the Downtown Implementation Plan area and then consider variances on a case by case basis, if needed. With no further business, the meeting was adjourned at 1:15 p.m. MARK A. BURROUGHS JENNIFER WALTERS MAYOR CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES February 2, 2010 After determining that a quorum was present, the City Council convened in a Work Session on Tuesday, February 2, 2010 at 11:30 a.m. in the Council Work Session Room at City Hall. PRESENT: Mayor Burroughs, Mayor Pro Tem Kamp, Council Member Engelbrecht, Council Member Gregory, Council Member Heggins, Council Member Mulroy and Council Member Watts. ABSENT : None 1. Requests for clarification of agenda items listed on the agenda for February 2, 2010. City Manager Campbell indicated that Consent Agenda Item 0 and Closed Session Items Al and A2 would not be considered. Following the completion of the Work Session, the Council convened in Closed Session at 5:05 p.m. 1. Closed Meeting: A. Consultation with Attorney -Under Texas Government Code Section 551.071. 1. Receive a presentation from Denton Municipal Electric staff, discuss, deliberate and consider possible amendment of the ECA Rate Rider to the electric rate ordinance, which is a public power utilities competitive and financial matter. Receive legal advice from the City's attorneys regarding possible recommended changes to the ECA Rate Rider. Provide the City's attorneys with direction. A public discussion of these legal matters would conflict with the duty of the City's attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. This item was not considered. 2. Consultation with the City's attorneys regarding legal issues associated with Consent Agenda Item 3A on the City Council's February 2, 2010 agenda where a public discussion of these legal matters would clearly conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. This item was not considered. B. Deliberations regarding Real Property -Under Texas Government Code Section 551.072; Consultation with Attorney -Under Texas Government Code Section 551.071. City of Denton City Council Minutes February 2, 2010 Page 2 1. Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the grant of property within the Denton Rail Corridor to the DART or DCTA, the limits of said corridor being all that certain lot, tract or parcel of land described in that certain Quitclaim Deed from Missouri Pacific Railroad Company to the City of Denton, Texas dated August 9, 1993, and filed on August 24, 1993, as Clerk No 93- 80058485 in the Real Property Records of Denton County, Texas; and also being that same property described in that certain Correction Quitclaim Deed, dated June 1, 2001 and filed for record in the Real Property Records of Denton County, Texas as Volume 4857, Page 020211 where such deliberation in an open meeting would have a detrimental effect on the position of the City Council in negotiations with DART or DCTA. Consultation with the city's attorneys regarding legal issues associated with the granting of said property above described where a public discussion of these legal matters would clearly conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. C. Consultation with Attorneys -Under Texas Government Code, Section 551.071. 1. Consultation, discussion, deliberation, and receipt of information from the city's attorneys involving legal matters relating to possible annexations of property into the City of Denton where public discussion of these legal matters would clearly conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. Regular meeting of the City of Denton City Council at 6:30 p.m. in the Council Chambers of City Hall. 1. PLEDGE OF ALLEGIANCE The Council and members of the audience recited the Pledge of Allegiance to the U. S. and Texas flags. 2. PROCLAMATIONS/PRESENTATIONS A. Proclamations/Awards 1. Resolution of Appreciation for Paul Abbott Mayor Burroughs presented a Resolution of Appreciation for Paul Abbott. Mayor Pro Tem Kamp motioned, Council Member Heggins seconded to approve the Resolution of Appreciation. On roll call vote, Council Member Watts "aye", Council Member Mulroy City of Denton City Council Minutes February 2, 2010 Page 3 "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", and Mayor Burroughs "aye".Motion carried unanimously. Chief Minter presented a plaque of appreciation to Officer Abbott. 2. Denton County Transportation Authority presentation of a ceremonial shovel from the Medpark Station groundbreaking Guy McElroy presented the Council with a ceremonial shove from the Medpark Station groundbreaking. 3. CONSENT AGENDA Ordinance No.2010-020 A. Consider adoption of an ordinance of the City of Denton, Texas to declare the intent to reimburse expenditures from the Solid Waste Reserve Fund with Certificates of Obligation with an aggregate maximum principal amount equal to $1,412,000 to allow the Solid Waste Department to purchase and acquire refuse and recycling vehicles and equipment in order to continue providing Solid Waste Refuse and Recycling Collection operations; and providing an effective date. The Public Utilities Board recommends approval (7-0). Ordinance No.2010-021 B. Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute a purchase order through the Buy Board Cooperative Purchasing Network for the acquisition of four refuse trucks and one knuckle boom truck for the City of Denton Solid Waste Department by way of an Interlocal Agreement with the City of Denton; and providing an effective date (File 4473-Equipment for Solid Waste Department awarded to Rush Truck Center, Crane in the amount of $560,960.17, McNeilus Truck in the amount of $278,034 and Southwest International Truck in the amount of 139,309.51 for a total award of 978,303.68). The Public Utilities Board recommends approval (5-0). Ordinance No.2010-022 C. Consider adoption of an ordinance of the City of Denton, Texas accepting competitive sealed bids and awarding a best value contract for the purchase of 15/20/25//28 MVA, 13 8kV and 13 8 kV x 69kV to 13.2/7.62kV substation power transformers for Denton Municipal Electric; authorizing the expenditure of funds therefor; and providing an effective date (Bid 4425-Best Value Bid for Purchase of 15/20/25/28 MVA Power Transformers in the estimated first year amount of $2,212,330). The Public Utilities Board recommends approval (7-0). Ordinance No.2010-023 D. Consider adoption of an ordinance of the City of Denton, Texas accepting competitive sealed bids and awarding a best value contract for an electronic document archiving system for the Planning and Development Department; authorizing the expenditure of funds therefor; and providing an effective date (Bid 4450-Best Value Bid for Imaging Project awarded to VP Imaging dba DocuNav Solutions in the amount of $186,650). City of Denton City Council Minutes February 2, 2010 Page 4 Ordinance No.2010-024 E. Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute a purchase order through the Texas Association of School Boards (TASB) for the acquisition of one Gradall Wheeled Excavator as awarded by way of an Interlocal Agreement with the City of Denton; and providing an effective date (File 4468- Excavatorfor Drainage Department awarded to Hi-Way Equipment Co., LLC in the amount of $185,500). The Public Utilities Board recommends approval (7-0). Ordinance No.2010-025 F. Consider adoption of an ordinance authorizing the City Manager to execute a Professional Services Agreement with Kirkpatrick Architecture Studio for the design and construction oversight of a systems operation and dispatch center building for Denton Municipal Electric; authorizing the expenditure of funds therefor; and providing an effective date (RFSP 4334 in an amount not to exceed $170,000). The Public Utilities Board recommends approval (7-0). Ordinance No.2010-026 G. Consider adoption of an ordinance accepting competitive bids and awarding a public works contract for the construction of Ector Street Storm Drainage and Sanitary Sewer Improvements; providing for the expenditure of funds therefor; and providing an effective date (Bid 4439-awarded to the lowest responsible bidder meeting specification, Omega Contracting, Inc., in the amount of $619,882). The Public Utilities Board recommends approval (7-0). Ordinance No.2010-027 H. Consider adoption of an ordinance of the City of Denton, Texas approving the purchase of a ScanX Digital Imaging System and TigerView Explosives Ordnance Disposal/Detection Software for the City of Denton Fire Department available from only one source in accordance with the provision for State Law exempting such purchases from requirements of competitive bids; providing for the expenditure of funds therefor; and providing an effective date (File 4470-Purchase of Imaging System and Explosives Ordnance Disposal/Detection Software for Fire Department awarded to Televere Systems LLC in the amount of $57,647). Ordinance No.2010-028 I. Consider adoption of an ordinance of the City of Denton, Texas approving an Agreement between the City of Denton and the North Texas Umpire Association; determining a sole source and approving the expenditure of funds for the purchase of certified softball officiating services available from only one source in accordance with the provisions of the state law exempting such purchases from the requirements of competitive bids; and providing an effective date (File 4472-Agreement with North Texas Umpire Association in the amount per game as specified in the agreement for an estimated award of $65,000). City of Denton City Council Minutes February 2, 2010 Page 5 Approved the followin minutes: J. Consider approval of the minutes of: December 15, 2009 January 12, 2010 Resolution No. R2010-005 K. Consider approval of a resolution by the City Council of the City of Denton, Texas granting the City Manager authority to apply to the Texas Commission on Environmental Quality for an amendment to the City's Lake Lewisville Water Right -Permitting Indirect Wastewater Reuse; providing for an effective date. The Public Utilities Board Recommends approval (~-o)• Resolution No. R2010-006 L. Consider approval of a resolution authorizing the City Manager to execute a lease between the City of Denton and the Federal Aviation Administration (FAA) for land at the Denton Municipal Airport for the Medium Intensity Approach Lighting System with Runway Alignment (MALSAR), Localizer (LOC), Glide Slope (GS) and Automated Surface Observing System (ASOS); and providing an effective date. The Airport Advisory Board recommends approval (7-0). Ordinance No.2010-029 M. Consider adoption of an ordinance of the City of Denton, Texas approving the issuance of an estoppel certificate to Sykes-Vaughan Investments LLC and Western Petroleum Company; and providing an effective date. The Airport Advisory Board recommends approval (7-0). Ordinance No.2010-030 N. Consider adoption of an ordinance ordering an election to be held in the City of Denton, Texas, on May 8, 2010, and if a runoff election is required, on June 12, 2010, for the purpose of electing Council Members to Places 5 and 6 and electing a Mayor to Place 7 of the City Council of the City of Denton, Texas; prescribing the time and manner of the conduct of the election to be in accordance with an agreement with the Elections Administrator of Denton County; prescribing the form of the ballot; providing for notice; providing for publication of notice of this election; providing a severability clause; providing an open meetings clause; and providing for an effective date. Item 0 was not considered. 0. Consider adoption of an ordinance of the City of Denton, Texas amending the Denton Municipal Electric Rate Ordinance contained in Ordinance No. 2009-218, solely as to Rate Rider ECA (Energy Cost Adjustment); providing for a repealer; providing for a severability clause; and providing for an effective date. The Public Utilities Board recommends approval (5-0). City of Denton City Council Minutes February 2, 2010 Page 6 Mayor Pro Tem Kamp motioned, Council Member Engelbrecht seconded to approve the Consent Agenda and accompanying ordinances and resolutions with the exception of Item 0. On roll call vote, Council Member Watts "aye", Council Member Mulroy "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", and Mayor Burroughs "aye".Motion carried unanimously. 4. PUBLIC HEARINGS A. Continuation of a public hearing on the Sale of the Denton Branch Rail Trail Corridor owned by the City of Denton to the Dallas Area Rapid Transit Authority (DART) for the purposes of reactivation of a rail line between Denton and Carrollton and consideration of an ordinance granting approval for the sale and transfer of the Denton Branch Rail Trail from approximately Mile Post 721.89 to Mile Post 729.5 for the purpose of a commuter railroad in accordance with Chapter 26 of the Texas Parks and Wildlife Code; and providing an effective date. Mayor Burroughs opened the public hearing. Council Member Gregory motioned, Mayor Pro Tem Kamp seconded to continue this item to the February 16, 2010 meeting. On roll call vote, Council Member Watts "aye", Council Member Mulroy "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", and Mayor Burroughs "aye" . Motion carried unanimously. 5. ITEMS FOR INDIVIDUAL CONSIDERATION Ordinance No.2010-031 A. Consider adoption of an ordinance of the City of Denton, Texas, authorizing the City Manager to execute an Advance Funding Agreement for a proj ect using funds held in the State Highway 121 subaccount in the amount of $57,689,189 between the City of Denton, Texas and the State of Texas for the widening and construction of Bonnie Brae Road from the Interstate Highway 35 East (IH 35E) service road south to U.S. Highway 377; authorizing the expenditure of funds therefor; and providing an effective date. Frank Payne, City Engineer, presented information on both Items SA and SB. He stated that in August of 2007, the City applied for Regional Toll Revenue funding from SH 121 tolling proceeds for several major transportation projects. Item A dealt with the agreement between the City and the Texas Department of Transportation for funding. Item B dealt with the agreement between the City and the County for receipt and use of funds from Precinct 4 as part of the County's TRIP-08 bond program. Mayor Pro Tem Kamp motioned, Council Member Watts seconded to adopt the ordinance for Item A. On roll call vote, Council Member Watts "aye", Council Member Mulroy "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", and Mayor Burroughs "aye" .Motion carried unanimously. City of Denton City Council Minutes February 2, 2010 Page 7 Ordinance No.2010-032 B. Consider adoption of an ordinance of the City of Denton, Texas approving an Interlocal Cooperation Agreement in the amount of $11,537,838 between the City of Denton, Texas and Denton County Precinct No. 4 for the widening and construction of Bonnie Brae Road from the Interstate Highway 35 East (IH 35E) service road south to U.S. Highway 377; authorizing the City Manager or his designee to execute said agreement on behalf of the City of Denton; providing for the expenditure of funds; and providing an effective date. Mayor Pro Tem Kamp motioned, Council Member Mulroy seconded to adopt the ordinance for Item B. On roll call vote, Council Member Watts "aye", Council Member Mulroy "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", and Mayor Burroughs "aye" .Motion carried unanimously. C. Citizen Reports 1. Review of procedures for addressing the City Council. 2. Receive citizen reports from the following: a. Willie Hudspeth regarding concerns of Southeast Denton. Mr. Hudspeth indicated that he did not like the placement of the officer on duty in the front of the room. His agenda consisted of the following items: there was only one fireman who was African American; there were no walkways in the plans from Loop 288 to Ryan High School; the Consent Agenda was hiding information from the public; there were no Blacks on the Parks Board or in the Park administration; Bobby Givens should be assigned as the manager of the MLK Center; some of the employees in Code Enforcement were extremely rude; the Planning Director was the worst in terms of being rude; and the Juneteenth celebration and Cinco de Mayo were the only ones being charged park fees while Jazzfest was not charged the fee. b. Jordan Hudspeth regarding concerns of Southeast Denton. Ms. Hudspeth was not present at the meeting. c. Hagar Hudspeth regarding concerns of Southeast Denton. Ms Hudspeth was not present at the meeting. d. Robert Donnelly regarding the Engineering Dept, drainage and improvements and the Medpark Station. Mr. Donnelly presented pictures of a rock dam and information from a hydrology report regarding the development of Medpark Station and the potential to increase storm water runoff in the area. He also presented information on the drainage in the Medpark Station relative to the detention ponds, rock berms and the diversion of stormwater. Downstream flooding would City of Denton City Council Minutes February 2, 2010 Page 8 affect his property. He had talked with staff but he could not seem to get a resolution to his questions. He was asking for answers that make sense as staffs answers contradicted the ralnage stu y. e. Diana Garrison regarding code enforcement citations at the Shepherd's Hand. Ms. Garrison stated that Code Enforcement had been out regarding their motor home on leased property. Originally it had a tarp on it and they were told that they would have to replace the tarp with a manufactured top which they did. Then Code Enforcement came out and gave them a citation regarding the location of the motor home and they were told that it would have to be moved. Currently it was located at the end of a dead end street. They were asking that their citation be overruled. They wanted to be in compliance but at times that was hard to do. A neighbor's business was broken into and the motor home helped protect the building. They were a ministry and wanted to help the residents of Denton County. The motor home not in anyone's way and was on leased property. f. Rick Henry regarding code enforcement citations at the Shepherd's Hand. Mr. Henry stated that the cause of the complaints was from a former employee. Since he had been on site, they had stopped a number of burglaries in the area. Homeless people were breaking into the neighboring businesses and into Shepherd's Hand to steal money and food. With no one on site, there would be more problems. The RV was there for storage and for protection. Shepherd's Hand serviced 6400 people a month and was doing a good service to the community. Mayor Pro Tem Kamp asked the City Attorney to visit with Ms. Garrison and Mr. Henry after t e meeting. D. 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. Council Member Gregory asked for a report from staff regarding the paperwork Mr. Donnelly had presented. Mayor Burroughs asked for a report regarding the park fee policy as noted from Mr. Hudspeth. City of Denton City Council Minutes February 2, 2010 Page 9 Council Member Engelbrecht asked for feedback on sidewalks along McKinney to Ryan. E. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no continuation of the Closed Meeting. F. Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no official action on Closed Meeting items. With no further business, the meeting was adjourned at 7:32 p.m. MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Parks and Recreation Department ACM: Fred Greene SUBJECT Continuation of a public hearing on the Sale of the Denton Branch Rail Trail Corridor owned by the City of Denton to the Dallas Area Rapid Transit Authority (DART) for the purposes of reactivation of a rail line between Denton and Carrollton and consideration of an ordinance granting approval for the sale and transfer of the Denton Branch Rail Trail from approximately Mile Post 721.89 to Mile Post 729.5 for the purpose of a commuter railroad in accordance with Chapter 26 of the Texas Parks and Wildlife Code; and providing an effective date. BACKGROUND The Parks, Recreation and Beautification Board recommended approval of providing a railroad easement along the Denton Branch Rail Trail corridor on October 2, 2006. This approval was for a Memorandum of Understanding (MOU) document between the City of Denton and Denton County Transportation Authority (DCTA) for the future construction of a Rail Commuter line between Denton and Carrollton. The Denton County Transportation Authority (DCTA) requested an easement on the Denton Branch Rail Trail in order to construct the rail commuter railroad from downtown Denton to Carrollton to connect with the Dallas Area Rapid Transit (DART) light rail line. During the development of an agreement to start this construction, it has been determined through the line sale agreement with the Union Pacific Railroad, the railroad assigned its reversion interests to DART during a sale of several miles of underutilized rail lines in the Metroplex. DART acquired the Denton Branch rail line from Dallas to Lake Dallas at Burl Street in Corinth. The Union Pacific Railroad assigned any remaining rights they may have in the reversion of the corridor back to a railroad to DART during this purchase agreement. The Denton Branch Rail Trail is a rail banked corridor being used as an interim trail through the National Trail Act. The corridor is banked from abandonment as a railroad until it may be re- activated. With DART having the first ability to reactivate the line and having notified the City of its intent to do so, it is prudent to negotiate terms allowing the City to reserve easements for utilities and a new trail corridor, while allowing the two transit authorities to work through agreements on reconstruction of the railroad for rail commuter train service. State law as defined in Chapter 26, Protection of Public Parks and Recreational Lands, of the Texas Parks and Wildlife Code requires that: (a) a municipality of this state may not approve any program or project that requires the use or taking of any public land designated and used prior to the arrangement of the program or project as a park unless the municipality, acting through its duly authorized governing body or officer, determines that: (1) there is no feasible and prudent alternative to the use or taking of such land; and (2) the program or project includes all reasonable planning to minimize harm to the land, as a park, resulting from the use or taking. (b) A finding maybe made only after notice and a hearing as required by this chapter. " Parks and Recreation Department and City staff have reviewed all possible alternatives in light of the planning to minimize harm, and recommends that the Council make the required findings. OPTIONS As discussed in Closed Session. RECOMMENDATION As discussed in Closed Session. ESTIMATED SCHEDULE OF PROJECT Construction is projected to begin in 2010. PRIOR ACTION/REVIEW The Parks, Recreation and Beautification Board gave its approval to a MOU at the October 2, 2006 meeting by a vote of 6 to 0. On November 2, 2009, the Parks, Recreation and Beautification Board came to a consensus that the City should go forward with the public meeting in regard to this particular matter. On December 1, 2009, Council continued this item to December 8, 2009. On December 8, 2009, Council continued this item to December 15, 2009. On December 15, 2009, Council continued this item to January 12, 2010. On January 12, 2010, Council continued this item to February 2, 2010. On February 2, 2010, Council continued this item to February 16, 2010. FISCAL INFORMATION Contracts relating to rail reactivation specify the purchase price of the subject rail corridor. EXHIBITS 1. Map 2. Park, Recreation and Beautification Board Minutes of November 2, 2009. Respectfully Submitted: Emerson Vorel, Director Parks and Recreation Department Prepared by: r Bob Tickner, Superintendent Parks and Recreation Department Exhibit A Denton Branch Rail Trail Mileposts 721.5-729.5 ~_....._i Hickory Street, MP 721.5 a~ J P~tfver Plant ~ ~ Denton Branch Rail Trail 2 ~o°~ right of way i ~o~ I (f: tOr1 Denton Branch Rail Trail atlyShores right of way ,~~ton ity of Corinth 11 Burl Street, MP 729.5 C~ v - Od~ SW fisher Rtl FM 2181 k k Denton Branch Rail Trailk. City Limit line 1 DRAFT 2 Parks, Recreation and Beautification Board 3 Minute s 4 November 2, 2009 5 Civic Center Conference Room 6 7 Members present: Vicki Byrd, Allyson Coe, Derrick Murray, Janet Shelton, Jennifer Wages 8 Members absent: Carol Brantley, Mike Simmons 9 Staff present: Emerson Vorel, Jim Mays, Bob Tickner, Mary Aukerman, Amanda Green, Janie McLeod 10 Additional Staff present: City Attorney, Anita Burgess and KDB Group: Aimee Dennis, Jannibah, 11 Coleman Menthe Schmidt 12 13 Allyson Coe called the meeting to order at 5:58 p.m. 14 15 AWARDS AND RECOGNITIONS: Jim Mays announced that the Parks Maintenance staff had won 1St 16 place in the TRAPS Region 2 Parks Rodeo and placed 2nd in the entire Metroplex. 17 18 Since most of the KDB staff members are new, Aimee Dennis, KDB Program Manager, introduced herself 19 and the KDB staff, explaining their specific areas of responsibility. Aimee explained that, although the 20 three KDB staff members are paid through City of Denton Parks & Recreation, Keep Denton Beautiful, Inc. 21 is anon-profit organization. 22 23 APPROVAL OF MINUTES OF October 5, 2009 MEETING: Derrick made a motion that the minutes 24 be approved as written, Jennifer seconded the motion and the minutes were approved with a vote of 5 to 0. 25 26 ACTION ITEMS: 27 a) Approval of 2010 Park Board Meeting Schedule -The exceptions to the Board meeting on dates 28 other than the first Monday of each month were reiterated. 29 3 0 MOTION: There being no further discussion, Jennifer made the motion to approve the 2010 Park 31 Board Meeting Schedule as presented; Janet seconded the motion and the schedule passed with a vote of 32 5-0. 33 34 b) Sale of Alcoholic Beverages At Mardi Gras -Janie explained that the Mardi Gras is an event that the 3 5 Rotary Club has held for several years, but, with the changes recently made to the Alcohol Ordinance, 36 this was the first event selling alcoholic beverages inside the Civic Center to be brought before the Park 3 7 Board for their approval. Emerson pointed out that only events open to the public will be presented to 3 8 the Park Board; private events, such as wedding receptions and Quinceaneras, need only the approval of 39 the City Manager or his designee, as they have in the past. Janie assured the Board that the Rotary Club 40 will comply with the other requirements needed for an event with alcohol, such as security and 41 insurance. 42 43 MOTION: There being no further discussion, Janet made the motion to approve the Mardi Gras event 44 with the sale of alcoholic beverages in the Civic Center, Jennifer seconded the motion and it passed with 45 a vote of 5-0. 46 47 PARKS PROJECT STATUS REPORT 48 Avondale Park Lighting and Landscape Improvements -The lights are up and operating, which 49 should help to abate vandalism. The sidewalk replacement will be next. 50 51 Briercliff Park Design and Development Project -The project is progressing. 1 Denton Branch Rail Trail Bridges Project -This project has been deferred to the City Attorney and 2 Engineering. There will be a pedestrian and bicycle bridge over 288. 3 4 Neighborhood Park Design: Preserve at Pecan Creek, Owsley Park and Wheeler Ridge -Bob 5 brought a concept plan for Wheeler Ridge trail layout. Part of the trail is in an elevated area. Seating 6 nodes are planned for various sites along the trail. Concept plans are also in the works for Preserve at 7 Pecan Creek and Owsley Park which will be presented to the Park Board when they are completed. 8 9 North Lakes Adult Soccer Field Development Project -There will be a public meeting at the North 10 Lakes Annex on Riney and Windsor on Thursday, December 3rd at 6:30 p.m. for this project. The Park 11 Board is invited to attend. It is hoped that this project will got out for bids in March and be completed the 12 spring of 2011. 13 14 North Lakes Park Goldfield Tennis Center -This project is on hold as we look at options for its future. 15 16 Senior Center Renovation and Expansion Project -The Senior Center project is still on schedule with 17 completion estimated for January 2010. Asbestos abatement is done in the main building; walls are being 18 built. An open house will take place when the project is completed. Work in the parking lot is going on 19 as well. 20 21 Unicorn Lake Trail and Landscape Project -The trail is complete and lighted. The landscaping has 22 been held up because of the bad weather. October only had 4 workable days. It is hoped the project will 23 be completed November 2009. 24 25 KEEP DENTON BEAUTIFUL UPDATE 26 This year's Tree GiveAway was very successful. All trees were give out by pre-registration. In the past it 27 had been first come, first served which resulted in long lines of cars. Times were given out with the on- 28 line registration in half hour increments, which helped get rid of the long lines. 29 30 PUBLIC ART COMMITTEE MEETING MINUTES 31 The minutes are presented in the Park Board packet for their review. 32 33 At this time, Allyson announced that the Board would go into Closed Session for the remainder of the 34 meeting to discuss the valuation and possible sale of park real property. City Attorney, Anita Burgess, led 3 5 the discussion. The Board came to a consensus that the City should go forward with the public meeting in 3 6 regard to this particular matter. 37 3 8 Upon completion of the discussion in Closed Session, Allyson announced that the meeting was once again 3 9 open to the public. 40 41 With no further business on the agenda, Allyson asked for a motion to adjourn. Janet made the motion to 42 adjourn, Carol seconded the motion and the meeting was adjourned at 7:02 p.m. s:lour documentslordinances1491dart ordinance for sale and transfer of Benton branch rail trail corridor 12-$-O~.doc ~RDn~ANCE DRDINANE C~RANTIN APPROVAL FDR TIC SALE ~ TRANSFER ~F THE DENTDN BRANCH RAIL TRAIL FRS APPRDIATELY BILE PDST 721.$9 TD MILE PAST 729.5 FAR THE ALTRP~SE DF ~ O.~VIUTER RAILROAD IN .A~~RDANE wZTH CHAPTER Z~ ~F T~ TEXAS PARKS ANA wILDL~FE ODE; AND PRI~VIDIN AN Ep`FE~TI~E DATE. w~REAS, Section ~~.~~1 of the Texas Parrs of wildlife bode ~"chapter Z~"~ provides that public land designated and used as a parr lnay be sold and transferred if the pity Oouncil finds after notice and heari~.g that there zs no feasible and prudent alternative to the use of such land far the proposed project and the proposed pa~oject includes all reasonable planning to minimise the harm to the parr resulting from such use; and WHEREAS, the pity of Denton, Texas ~"pity"~ was qurtcla~med the Denton Branch Rail . corridor the "Property"} by quitclaim therein so called from [Trion Pacific Railroad company, successor to lssoun Pacific Railroad o~npany, pursuant to and conditioned upon the terms of that certain Line Sale contract the "Line Sale contract"}, dated duly 2, 1~~, by and between the NTisouri Pacific Railroad company and pity; and WHEREAS, file tC~alrrl 1s ~xpr~ssly subJ~Ct to the L1ne Contrast and the terms and co~aditions of a Certificate of Interim Trail Ilse ~``ITIJ"~ issued the Interstate om.n~.eree orn~nission pursuant to the National Trails System Act; and WHEREAS, the Line dale contract contains certain conditions and covenants purportedly lim.xtin and conditioning the interests, if any, quitclaimed to pity pursuant to the terms thereof and the uitclalrr~; and WHEREAS, the Line Sale ~ontraet provides, a>~.ong other matters, that the event of reactivation of rail service upon the Rands quitclaimed to pity pursuant to the quitclaim, pity shall transfer such Property to lVlissouri Pacific Railroad on~pany or other acquiring entity; and wHERE.AS, Dallas Axea Rapid Transit ~"DART"} is the successor in interest to the rights of the xssouri Pacific Railroad on~pany under the Line Sale contract and uitclailn, and possesses the power of eminent domain; and WHEREAS} DART has elected to reactivate rail service upon the lands quitclaimed by the uitclairn pursuant to notice letter dated September 14, 209 delivered to the pity; and WHEREAS, C1ty, pursuant to the terms of the Line dale contract and the quitclaim, and due to the paramount public purpose of rail use and its cornpatibllity with the existing trail use under the SITU and pity's use of the corridor for water pipeline and other utility purposes, desires and 1s regmred the L1ne contract to qultcla~m, the Property to DART; and ~ S:Idur Dacunaer<tsl0rdinances1U91DART 4rdmancc for sale and ~ansfer 4f Aenton $ra~i~li Rail 'lYail corridor 12-5-09.dac AREA, it is the understanding of the City that DART and the Denton County Transpartat~on Authaty ~~~DCTA"} de~zre to 1n~prove public transportat1on to the Cxty of Denton and Denton County by construction of a commuter rail line from. Denton to Carrollton upon the Property; and ~UI~EREA, on November ~~~9, the Parks and Recreation Board held a meeting aid received testin~any ~ron~ City staff regarding the sale and transfer of the Property to DART and reached Concurrence here is no feasible and prudent alternative available to the quitclaim of the Property to DART ~"DART uitclai~n"}; and AREA, the City provided notice in the Denton Record Chronicle on Novernher November tb, and Navernber ~3, ~a~~ of a Public Hea~.n to be held on December 1, ~~~9 in the Council Chambers to consider the alternatives available accordance v~ith Chapter Z6; and ~IEREA, the Public Dearing was continued by the City Council at the meeting of the City Council on December 1, to the meeting of the City Council an December 8, X009; and 3EREA, the City Council on December 1, 209, and December S, ~0~9, received testimony firorn City staff and citizens regarding alternatives to the sale of the Property available, which includes, but is not limited to, the following: a. It is anticipated that DART, ~vho is also the owner of the rail line south of mile v~ ~.5, mill enter Lnto an agreement nth DCTA v~herein DCTA will agree to construct rail commuter Line on the Property a well a re-constructing the Denton Branch Rail Trail pedestrian-bicycle trail along side the proposed rail line The City mill reserve an easement far the pedestrian-bicycle trail from the DART uitclai~n for the time eriod P prescribed therein. This appears to be the most feasible and prudent action in order to satisfy the requirement to assign the Property to DART and continue to rrraintain the ability to provide recreational use and alternate transportation o ortunxties to Denton pp citizens far the tine perxvd resc~.bed In the DART uitcla~m. l ~UHEREA, the City Council ~ finds that this matter above does oat fall v~ithin the purview of section ~S.OaI ofthe Teas Local Government Cade; and HEREA, the City Council fords that there is no feasible and rodent alternative to the P quitclaim of the Property to DART and the reservation of the pedestrian-bicycle easement in the DART quitclaim mill allov~ the surface of such park land effected to remain useable far the period of time prescribed in the DART ~uitclaiin far the park patrons once the construction of the commuter rail line and replacement trail in~pravements are cornpleted;l~~, THEREFORE 9 k THE COUNCIL DE THE CITY DF DENTIN ~iEREB DRDA~N. . ECTIDN 1. The City Council of the City of Denton finds there is na feasible and prudent alternative to the quitclaim of the Property to DART and that the DART uitclain~ Page 2 of I 5:1~~ AacumentslOrdinances1491DART Ordinance far safc acrd transfer of Denwa Br~~h Rail Trail corridor 12-5-49.doc includes all reasonable planning to n~inimi~e harm to the Praparty as a pedestrian-bicycle trail resulting from the quitclaim of the Property to DART. . ECT~~~ 2. The quitclaim of the .Property shall be composed by the City a~nager or his designee and approved by the City Attorney a1lov~ing the use of the park property as referenced above. SECTION The rights and bene.ts set forth in this ordinance rna~ not be assigned ~rithout the express ~v~.tten consent of the City. i ECT~~~ 4. The recitals of t1~s ordinance are herein adapted and incorporated as findings of the City Council of the City ofDenton. ECTI~~ This ordinance shall become effective immediately upon Its passage and approval. PASSED AND APPR~vED this the day of ~0~9. ARIA A. BURR~I~H, MAYOR ATTEST. ~ENN~'ER ALTER, C~'~ SECRETARY By: APPR~vED A T~ I~ECxAI~ FARM: AI~ITA ~I~RCE IT~Y ATTORNEY Dy: Page 3 of _ i AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Planning and Development ACM: Fred Greene SUBJECT - Z09-0011(Girl Scouts of Northeast Texas) Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, providing for a zoning change from a Neighborhood Residential 2 (NR-2) zoning district classification and use designation to a Neighborhood Residential Mixed Use 12, (NRMU-12) zoning district classification and use designation, and superseding and repealing Ordinance Nos. 87-113, 87-154 and Specific Use Permit 5-193, along with any special exceptions or legally nonconforming use status created as a consequence of the zoning classification change in 2002, for approximately 5.2 acres of land located at 4000 VV. University Drive, legally described as Ranch Estates, Block E (SW corner), in the City of Denton, Denton County, Texas; providing for a penalty in the maximum amount of $2,000 for violations thereof; providing a severability clause and an effective date. The Planning and Zoning Commission recommends denial of this request (6-1). BACKGROUND The property owners (Girl Scouts of Northeast Texas) are requesting to rezone the subject site to allow office uses. A specific use permit (SUP) was approved for this site on June 23,1987 (Ord. No. 87-113), allowing the site to be utilized for a Girl Scout Council Office/Headquarters and Activity/Training Center. An amendment to this SUP was approved on October 6, 1987 (Ord. No. 87-154) permitting overnight camping for no more than thirty (30) campers. This SUP will be repealed should this rezoning application be approved. Public notification information is provided in Exhibit 7. The Planning Department sent out eight (8) notices of the Planning and Zoning Commission public hearing to property owners within 200 feet. As of this writing, staff has received one (1) property owner response in opposition to the proposed rezoning. OPTIONS 1. Approve as submitted. 2. Approve subject to conditions. 3. Deny. 4. Postpone consideration. 5. Table item. RECOMMENDATION The Planning and Zoning Commission recommends denial of this zoning change request (6-1). Therefore, a supermajority vote is required by City Council to approve the proposal. The Development Review Committee recommends denial of this rezoning request. EXHIBITS 1. Staff Analysis 2. Location Map 3. Existing Zoning Map 4. Proposed Zoning Map 5. Future Land Use Map 6. Floodplain/ESA Map 7. Notification information 8. Letter From Applicant 9. P&Z Minutes from November 18, 2009 l0.Ordinance Prepared by: Cindy Jackson, AICP Planning Supervisor Respectfully submitted: Mark Cunningham, AICP Planning and Development Director EXHIBIT 1 PLANNING DEPARTMENT STAFF ANALYSIS CASE N0: Z09-0011 DATE TO BE CONSIDERED: February 16, 2010 LOCATION: The subject property is located at 4000 W. University Drive, east of Masch Branch Road. APPLICANT Larry Reichhart, AICP Spring Brook Planning Group 2405 Mustang Drive Grapevine, TX 76209 OWNER: Girl Scouts of NE Texas 6001 Summerside Drive Dallas, TX 75252-5335 REQUEST: Consider the rezoning of approximately 5.2 acres of land from a Neighborhood Residential 2 (NR-2) zoning district to a Neighborhood Residential Mixed Use 12 (NRMU-12) zoning district. STAFF RECOMMENDATION: The Development Review Committee recommends denial of this zoning request. The request is inconsistent with the commercial land use goals and strategies as stated within the Denton Plan. COMPREHENSIVE PLAN DESIGNATION: The subject site is located within an Existing Land Use/Infill Compatibility future land use designation. SITE AND SURROUNDINGS: The property is currently developed with an office building. North: Neighborhood Residential 2 (NR-2) -single family residences. South: Industrial Center Employment (IC-E) -undeveloped East: Neighborhood Residential 2 (NR-2) -undeveloped West: Neighborhood Residential 2 (NR-2) -undeveloped BACKGROUND INFORMATION: Pursuant to Section 35.5.2 of the Denton Development Code (DDC), professional offices and services are not permitted in the NR-2 zoning district. The SUP approved for this site is very specific regarding the types of office uses allowed. Ordinance No. 87-113 states that the site is to be used for a Girl Scout Training Office/Headquarters and Activity/Training Center. Since the ordinance specifies the Girls Scouts as users, all other potential users are precluded from utilizing this site. Rezoning this property would allow the property owners to sell or lease the site in accordance with the standards and uses that are permitted in the NRMU-12 zoning district. Future development of the site is encumbered by the location of stream buffer ESA and floodplain (Exhibit 6). ANALYSIS: Comprehensive Plan Analysis: The subject property is located within an Existing Land Use/Infill Compatibility future land use designation. Existing Land Use/Infill Compatibility is described in the Denton Plan as the following: "Within established residential areas, new development should respond to existing development with compatible land uses, patterns and design standards. The plan recommends that existing neighborhoods within the city be vigorously protected and preserved. Housing that is compatible with the existing density, neighborhood service and commercial land uses is allowed." The proposed Neighborhood Residential Mixed Use 12 District (NRMU-12) is part of the Neighborhood Residential Land Use category which was created to preserve and protect existing neighborhoods and to ensure that any new development is compatible with existing land uses, patterns, and design standards. The Denton Plan states the following with regard to commercial development within the city: Organization of Commercial Land Use Goals: "To provide for commercial activities in planned activity or neighborhood centers, rather than on scattered sites or highway strips." "To maintain, intensify, and/or expand existing commercial areas, where appropriate, while removing commercial uses from, and stopping intrusions into, areas not appropriate for commercial use." This site is not located within either a planned activity center or a neighborhood center. It is surrounded by large lot single family residential on three sides and vacant land zoned for industrial uses (IC-E). Organization of Commercial Land Use Strategies "Commercial activity or neighborhood centers are the preferred location for retail, commercial, and community services and encroachment of these uses into other areas is discouraged." As previously mentioned, this site is surrounded by single family residential on three sides, and not within a planned activity or neighborhood center. "Service-commercial establishments locate in appropriate activity centers, rather than at haphazardly chosen locations that contribute to the formation of strip or spot commercial development." The location of the subject site along S.H. 38o/University Drive could encourage the development of other service-commercial uses in the area. It could definitely be considered a "spot commercial development". The proposed zoning change is inconsistent with all of the above referenced commercial land use goals and strategies. Development Code/ Zoning Analysis: The following tables identify and provide a comparison of the uses permitted inthe NR-2 and the NRMU-12 zoning districts: ~ Agriculture P P Livestock L(7) L(7) Single Family Dwellings P P Accessory Dwelling Units SUP L(1) L(1) Attached Single Family Dwellings N P Dwellings Above Businesses N P LiveNVork Units N P Duplexes N P Community Homes For the Disabled P P Group Homes N SUP Multi-Family Dwellings N L(4) Manufactured Housing Developments SUP N ~ ~ Home Occupation P P Bed and Breakfast N L(10) Retail Sales and Service N L(15) Professional Services and Offices N L(14) Laundry Facilities N P Equestrian Facilities SUP N Outdoor Recreation P SUP Temporary Uses L(38) L(38) ~ ~ Kennels L(37) N Veterinary Clinics L(14) N Gas Wells L(27) SUP L(27) Basic Utilities L(25) L(25) Community Service N P Semi-public, Halls, Clubs, and Lodges SUP L(15) Adult or Child Day Care SUP P Kindergarten, Elementary School SUP P Middle School N P Elderly Housing N L(13) The following are general regulations for the NR-2 and NRMU Districts: . ~ ~ Minimum lot area (square feet) 16,000 3,500 Minimum lot width 80 feet 30 feet Minimum lot depth 100 feet 80 feet Minimum front yard setback 20 feet 10 feet Minimum side yard 6 feet 6 feet Minimum side yard adjacent to a street 10 feet 10 feet Minimum rear yard 10 feet 10 feet The following limits apply to subdivisions of more than 2 acres in lieu of minimum lot size and dimension requirements: . ~ • Maximum density, dwelling units per acre 2 12 Minimum side yard for non-attached 10 feet 10 feet buildings The following define the limitations to zoning uses when the zoning matrix identify a use as permitted, but limited L(1) =Accessory dwelling units are permitted, subject to the following additional criteria: 1. The proposal must conform to the overall maximum lot coverage and setback requirements of the underlying zone. 2~ The maximum number of accessory dwelling units shall not exceed 1 per lot. 3. The maximum gross habitable floor area (GHFA) of the accessory residential structure shall not exceed 50% of the GHFA of the primary residence on the lot, and shall not exceed 1000 sq. ft. GHFA unless the lot meets the requirements of L(1).5. 4. One additional parking space shall be provided that conforms to the off street parking provisions of this Chapter. 5. The maximum gross habitable floor area (GHFA) of the accessory residential structure shall not exceed 50% of the GHFA of the primary residence on the lot, where the lot size is equal to or greater than ten acres in size. An SUP is not required for such an accessory residential structure where the lot size is equal to or greater than ten acres. L(4) =Multi-family is permitted only: 1. With a Specific Use Permit; or 2. As part of a Mixed-Use Development; or 3. As part of a Master Plan Development, Existing; or 4. If the development received zoning approval allowing multi-family use within one year prior to the effective date of Ordinance No. 2005-224; or 5. If allowed by a City Council approved neighborhood (small area) plan. L(7) =Limited to two (2) animals on parcels one (1) to three (3) acres in size. Additional animals maybe added at a rate of one per each acre over three. L(8) =Travelers' accommodations, are permitted, provided that 1. The business-owner or manager shall be required to reside on the property occupied by the accommodation, or adj acent property. 2. That each accommodation unit shall have 1 off street parking space, and the owners shall have 2 parking spaces. All spaces shall be in conformance with the requirements of the Off Street Parking section of this Chapter. 3. That only one ground or wall sign, constructed of a non- plastic material, non-interior illuminated of 4 sq. ft. maximum size is allowed. Any exterior illumination of signage shall be installed such that it does not directly illuminate any residential structures adjacent or nearby the travelers' accommodation. 4. That the number of accommodation units allowed shall be proportional to the permitted density of the zone. Each traveler's accommodation unit shall be counted as 0.6 units for the purpose of calculating the permitted number of traveler's accommodations. 5. All travelers' accommodations shall be within 200 feet of a collector or arterial. Street designations shall be as determined by the City Comprehensive Plan. Distances shall be measured via public street or alley access to the site from the arterial. 6. Excluding the business-owner's unit and the area of the structure it will occupy, there must be at least 400 sq. ft. of gross interior floor space remaining per unit. 7. Traveler's accommodations are limited to no more than 8 guest units. L(10) =All restrictions of L(8), but limited to no more than 5 guest units. L(13) =Uses are limited to no more than 55,000 square feet of gross floor area per lot. L(14) =Uses are limited to no more than 10,000 square feet of gross floor area. L(15) =Uses are limited to no more than 5,000 square feet of gross floor area per lot. An SUP is required for additional square footage for Semi-Public Halls, Clubs and Lodges. L(25) = If proposed use is within 200 feet of a residential zone, approval is subj ect to a Specific Use Permit. L(27) =Must comply with the provisions of Subchapter 89, Gas Well Drilling and Production. L (37) = 5-acre minimum land area required and no more than 25 kennels per acre allowed, including indoor and outdoor runs. A natural buffer strip is required adj acent to any residential use. L (38) =Must meet the requirements of Section 35.12.9. The NR-2 zoning district is primarily a residential use district. The NRMU-12 District permits many distinct types of housing which are not allowed in the NR-2 District including attached single family dwelling units, duplexes, group homes and multi-family development. The NRMU-12 District also contains a commercial component, permitting retail sales and services (with a limitation on the maximum floor area per lot); bed and breakfast facilities (with a limitation on number of bedrooms); professional offices and services (with a limitation on gross floor area). Institutional uses such as community service facilities and elderly housing are also permitted in this district. The introduction of commercial zoning that permits non-residential uses in this residential neighborhood is problematic. The north side of University Drive is entirely residential in both zoning and use in this area. Staff has concerns that introducing a commercial component in this area will encourage the rezoning of adjacent parcels and ultimately change the residential character of the area. The closest NRMU-12 District to this site is approximately 0.91 miles to the east, on the east side of IH-3 5 . DEPARTMENT AND AGENCY REVIEW: The Development Review Committee has reviewed this rezoning request and provided comments and general information. All comments have been addressed. The Watershed Protection staff made the following comments regarding any future development on t e site: 1. The Environmentally Sensitive Areas (FBAs) map indicates developed floodplain, and stream buffer within the limits of the subj ect property. 2. Sec. 35.17.6 of the Denton Development Code (DDC) requires compliance with DDC Subchapter 19 for development within designated developed floodplain ESAs. 3. The stream buffer ESA extends 100 feet from the center line of the existing channel located east of the subject property. Uses within areas designated as stream buffers are regulated in DDC Sec. 35.17.8. No structures are allowed in areas designated as stream buffers. 4. Any deviations from ESA regulations will require an alternative ESA plan, as outline in DDC Sections 35.3.4 and 35.17.12. 5. An ESA assessment for confirming the existence of the stream buffer ESA is recommended. 6. An Environmentally Sensitive Area Review, per Section 3 5.17.4, will be required prior to any land disturbance activities within or in close proximity of the stream buffer ESAs. FINDINGS: Pursuant to subsection 3 5.3.4.B of the DDC, a zoning amendment shall be approved only when the following standards are met: 1. The proposed rezoning conforms to the Future Land Use element of the Denton Plan. The proposed NRMU-12 zoning District is not consistent with the Future Land Use designation of Existing Land Use/Infill Compatibility as defined in the Denton Comprehensive Plan. 2. The proposed rezoning facilitates the adequate provision of transportation, water, sewers, schools, parks, other public requirements and public convenience. The provision of adequate public facilities for this proposal was reviewed by the Development Review Committee. The site is currently served by an existing 12" water line located on the south side of University Drive and an existing 8" sanitary sewer line which is located along University Drive. If any development were to occur on this site, the water line would have to be extended along the entire frontage of the site to allow for the future development of adjacent tracts located to the east. EXHIBIT 2 LOCATION MAP r . 1rN'~ EKE 3. F r 4 SUBJECT SITE x T { llv i i i EXHIBIT 3 EXISTING ZONING MAP Ti II li r J ~I I, i i II SUBJECT SITE li r~F 7~ I ~ ttily ~ ; ' I - f a FJ 1 ri c i I i I If. -F 4 t I I EXHIBIT 4 PROPOSED ZONING MAP II ~~l I I iII I,l i r r I it i r SUBJECT SITE ~l r~F' ~l l ~:I7tF„ ri-- - - - l ,r I , ' I 'til, I I ,y I r - [ I I i I If . -F 4 .t i t I I EXHIBIT 5 FUTURE LAND USE MAP i I, Y i i Existing Land Use SUBJECT SITE - lariat Road yy 2 ~ m' /V l,mv..-i SIty 7 S Fi. 38o - - i I Industrial Center I Employment Cent--r EXHIBIT 6 FLOODPLAIN/ESA MAP I i I I - SUBJECT SITE ~ I i - I Legend ,E)DE.Stieels f~ ;DE.pl-iicels ICE.>tl eainBuffei s SBE.ESAFloodPlain EXHIBIT 7 NOTIFICATION INFORMATION h L 500 ft L 73 SITE UN VRRSUY Y L1~ 210 ft Public Notification Date: 11/04/09 200' Legal Notices* sent via Certified Mail: 8 500' Courtesy Notices sent via Regular Mail: 16 Number of responses to 200' Legal Notice ■ In Opposition: 1 ■ In Favor: 0 ■ Neutr,d: 0 Legend Girl touts of CIE Texas ~,V m Po-, , Z09-0011 NOTICE OF PUBLIC HEARING Z09-0011 The Pianning and Zoning Cornn-iission of the City of Denton, will hold a public hearing on Wednesday, November 13, 20C9, to consider making a recn-mmendation to City Council regarding the rezon,ng of approximately 52 arses of land from a Neighborhood Residential 2 (NR-2) zoning district to a Neighbonccod Residential Nixed Use 12 (INIRMU-12) zoning district. The subject property is located at 4000W. Unive;sty Drive. The public hearing will start at 6:30 p.m. in the City Council Chambers of City Hj-H iocated at 215 E. hlc,Kinney Street, Denton, Texas. Because you own property within Vwo huni-red ]200) feet of thre subject prope,ty, the Planning and Zcsn;og Cormni lion would 'lire to hear how you feel abort this request and knilos you to attend the public hearng. Please, in crder for your opinion to be taken into account. return this fOrm with your comments prior ta, the {date of the public hearing. (TPis ir: no way prohibits ycrti from attending and pa.rNripating in the public hearing.] You may fax it to the number located at the bottom or mail it to the address below or drop it off in-person: Planning and Development Department - 221 63. E~lrxo ST Menton, Texas 76201 I Attn: Cindy Jackson, Project Manager These farms are used to calculate the percentage of landowners that support and oppose the request, The Commission is mforrned of the porcent of responses in support and in opposition. Please circle one: in favor of request Neutral to request (apposed to request Reasons for Opposition: --o- -r~ a2Y.A FC;ft Signatn-e. Printer! Nay Mlailing Address. -Lpie=- _j-Z~ > - City, State Zip: - - pi= t~ I " r el phone Nurnber: Ph- sisal Address of Property within 200 feet: i l l CITY OF DENTON, TEXAS GITf HALL WFS; I)ENION. TEXAS 76201 940 349 8541 (F) 940.349.',1707 EXHIBIT 8 LETTER FROM APPLICANT e 1 z, F y y Sp ring core) September 2009 Mr Mark Cwnypam..ACP Cire _tor- of P'iannir:g wic! Developlnent ON of Menton 221 N Elm DenMn, TX 76201 Dear Mr. CUl ninghar-l, Re: Zoning Amendment apI-:Il wan for ' .L aisles IocateiJ at 4000 ';1'V I, niv.-. rsity Dri,,'e ,13_'1302; In the City of Denton, Texas. Gid Scouts A I'' ortheast. I!C - Rt:zmAg . FA _tJWU 3) Dear Mr. Curninghain, The Girl Smuts of PJi,?r[ iea t Tems are. Fi)i!oing to rezone, heir rJ'Cj;ert`d or, VV IUniveimf Dine (r:>::hUt 1? horn N02 to NRMU-1 to NOV office IJSP Or-., the PFOP&T,, I-here are ±w culle!7t `:UP's on The property' One r_+Ilms Me Girl S.OUts to Utilize the prODei"t1 fCr an We and the We chows Rom W camp on Me. pmperiy. If the rwo erty is rezoned both of those SUP could be rescinded. Pno' to the gM smuts aC uiri la to properly in the propeity was used b a'veterlnanan., FROJEC.T ^IARRITIVE. The subsect property is currentl,, zoned tJX One 1 N42 zoning to Me nortl . east and west and WE to the scl_ib (InAlit. 1'I. are seehng NR!MU.12 zoning to accommodate 0,_: rltende.1 Use [office;. The cusal of`ce structure ExhlbQ 2) a apprcx: mateely" 35DO sf. Based on be City of Denton map hg Me entire property is encurnib.,red t-y ESA developed "~oodpi:iri ,ulth food ay Nang the eastern i'Gilion of Me sue am! a on-y' small section in the s01.1lheast cons" s ESA 3tl .:9rn I:Uffer Although, the NRM A2 zoning wodd Nlow up to 10 OW st Of We or i the pi ope't, e par ink the e: ,Mg I_ uldng or f eel . vE'.Icp r1g, the l p lfy" .'VIII be er Jifficult'Jue to the i[nitatlons assoclatc'J a;Ith the f oU_IrI81i'I. l herefor"e. it is entre i ' lkE y that We current site co` Igl_Ilat on !:VIII not be'ulte'ed If Me prod Ty' s r r"ed. 5itePlistcl " The propeM is plar&J. Ranch EWtes Elk Qs',r. Corneri. i i=, l iang Drive 1 iope. im, Texas 6051 / 48+=,T D 1 81 T3290453 Tax) Surrounding propei~-v uses: North: Single-Fami'y (NR-2j South: Undeveloped (EC-E) East: Undeveloped (NR-2) VicsiUndeveloped (NR-21 Existin_ Site Conditions: CLI rently on site is the main office r Iodge building a smaller soparate office b~iilding, a storage shed, asphalt parking and a seci-uity fence. cased on city mapping, there is an existing 12" water line alcrig the south side of Jniversity. a Sanitary sewer service is available via an existing 8„ line along University The prcpe.ity is relatively flat vrith some scattered treas. m Access to the property is from University (US Hwy 380) ;which is classified as a Primary Major Afterial. Proosed Site Conditions: No Changes are proposed or anticipated„ No Overlay Restrictions are proposed. Adequate Public Facilities: a The existing office (less than 4,000 sf; is currently served by the h-ublic utilities noted above. The moat intensive use of the property allowed in the NPKIU-"12 zoning district is office use. The maximum office size allowed in the NRIVIU-12 zoning district is 10,000 sf, hoviever due tc the fioodphin en the property expansion Of the existing building is m~[ I kely. Therefore, the existing utilities and infrashucture are adequate to serve the most ntensive rise allowed in the NRMU-12 district. r As toted in the PAC09-00:3 iDRC comments, ROW dedication, sidevval* construction and the extension of a water line across the property frontage would be required upon future development of the property. Denton Development Code Analysis: Although no development is proposed, the NRMU-12 zoning district is the least intensive zoring district that al'ows the site to be utilized as it has beer. (OftiCe use) eAI'Dut an SUP and protects the surrounding neighborhood by limiting the maximum size to 10,000 sf. Frrtrne develohrnent Will ;,eve to adhere to the DDC. Denton Ran Analysis: The existing Land Use Classification for the this property is Existing Neighborhoods nfil! Compatibility The definition of Existing Neighborhoods 1 Infil! Compatibility (Page 37'! is Existing Residentaf!infiil Cemuatibiiitt VVithrn established residential areas. new deeveioprneot should respond to existing developme.it with cornpairhie land uses. patterns, and design sfanda;°ds 're plan recommends brat existing neighborhoods i'lithin the city he vigorously protected and preset-ed- Housing that is compatibie i;aith the existing ders ty, neighborhaod service- and cor,,mercial land r_i.ses is' allowed. Response: The proposed NRMU-12 zoning district is compatible with the existing office use. The sra,-rcjundimg neighhor_hood is protected by the size !imitations afforded that zoning district and by the floodpiain regulations and restrictions. As stated on page 41 of the Denton Flan - "The rode of commercial activity in the city is to pisAde convenient and available retail service, and commercial oppcitunities to residents of the Denton : arket area " Response: The rezoning of this property provider, that opportunity to other entities besides just the Gut Scouts while having no impact on the adjacent land uses. One of tha Commercial Goals & Strategies (page 45) of the Denton Plan is "To provide for reasonable amounts and distribution of varin-is types of commercial land use in attractive and well-located settings Response: This propety has been Utilized cornmercblly far ovcr 20 years. First for a vete.rinorian and most receritk/ as a Sid Scout office. Rezoning the property to i` F,MU-12 will allow this property to continue to be utilized. General Criteria for approval (<;35.3.4.8 Di,C aralysrs: 1. A complete application and fee shall be submitted. Response: A complete application & fee. was submitted. 2. Applications may be approved when the fo!'ov/ing standards are met: a. Tne proposed rezoning confoin s to the Future Land Use element of The Denton Piar. Response: The proposed NRMU-12 is consistent with the existing land use designation (Existing Neighborhoods, Infill Coin patibility). b. The proposed Specific Use Permit meets the criteria set to!th in Subchapter 6, and conforms to the purpoze and intent of The Denton Plan. Response: NIA for zoning arnendment, however, if the rezoning is approved two existing SrUP's are no longer needed. ,gin... ;rf d I+ r' IIt_' 1, _'._.I.:I I ! 'I_ i r,. 1 t 1 '_,Ir ' [ ,.,li. it i ri' i_i` Response- Adequate provisions for pL1bHc Wilides and convF•rtances Wt bee Wysis above and PAC09,00 ; .=,~ineertr~ comments}. ThiI .,did Be a Benefit to the local school district jp3V:nent of school tafs bW no students to educaty and no hopact on pari+s bacause this in rant ~ residII al devoopr7i.:nt -11 'ri 1 u 1 ; I'~ tr I r i I EA it ITF- SHUT"), I liv- ws ~ ~ 3 1 a t ~i 1 3 F r i ~ 1 35.5.2 Neighborhood Residential 35.5.2.1 Purpose R.,. tt 11.111 it rr:rri r;,~rn!nrna I r! 111 r, H- I L. I rl11 r= ,1-1".1', 35.5.2.2 Pervitted USes. > tigriculture P P quo ~I= i'Azl1W( F F -!;w ; Units e '_IGh I ~ _Pr n PI P „lrorc r-arts hl ~rtrple--;,.~~ ~.,i i -J ,nee Db .L-e F' F I _I'Alp Norms it SL'P ---=r----------1 ranai- hirer,' N,ou r`a ~~:icl m`s JJF 54 I, d; Ps Hon-c- o_rur_scion P P •sa of Fro iris Gro on h1 ~.i olals fd t~!ot'l- PJ Fad d Fre,~rast t L L t~=>tricts the I.um'ce~ of udis 7 I r,r I i'I i L•;,-,l R3taurent cr Frniate Fttub N r 'u-throe i acillh tl fl Fi es',o~ ~l e a nce~ - w ~'ehi i ~id❑ i r.j iervicla ~'~r fJ Fuko ~!~.d RV 9~les f~! P: u I i P F:r,t B~~1ert'-'~nment IJ , C~ rrrwn,al ..rkl :Lot, p.l YO _I~B ~tI J. ro~ill t i ~'ll_I dlO i }rient . 2 "smrss P1 emh Use 5 -2 „,t,~l ;I 1 1'r Ij 1 I _ - of JOn ~(iG~;t~f 'liS Foods fl t~! Lors I`J f-i Food Fri of.~.`r5~^.Q [i IIj I_7l: nl A.~-in Uid'.;?Ulln:l t.J r,l - ❑ISt!"I tiiJ tl011 LC'."I[21' ~J ~-J St or 'I'-in, 1 111 ;t, ii-,ution f! I "n'tlu tlorl f~q_r 1- ':,!es fJ P! - -I ink hard and Au i .,nr' N ~ t.1 I I Kennrl~: ,..I.j I''I i 1r','I I:'. i 'Jetc~inar<:Ilnn;d,~ i I 14 . 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - c,, , [ ~ on Ir - Ill _ -1 T Inpf of T a n- T (}a,, 'A J] :nt Nl,'\.1[ i.. 1 5 -3 Institutional Land; Use CAblubries ~61JI s; ~2t; e Ms I Churciie~ f -SUP _i I - - Li?=_~= 1] - cc uiro ~ b_ t. I J- I i; J ',tv i 1 h~.~ anil 2 ~i » Tt 1: 3_hoo, '-1 - - - - K n'i. r9^ t r Jerre [ ir, -;chord zOP S 11 ool In - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Hlyh Sceooi i•1 Pd :;enie:~riea `I r I,,t arie Pd '.5.-4 . nh,_h;in!.,;r L 1._I.❑~cui id, ~S.S.2.3 General Regulations. _ 111! ~I !"I- li1h~~r r. I;,i~iu 'PA IIim.ni lot A..,:, ajD efe 1 ini.~tgr~dtl:7fcet *?cr linlmun IIX deal I till nu ii a front i h<:i, fe-t 10 1, v! -,f~~~r.inw iJe vHr I n feat ~ feet Pfin ui =aide , I o ,,,ei t tre,-t I eeI I feat 1~1u;itn i irdr ytirl 1 iPe et 10 - f .1'. ee' i III' 1 -'I 1.: _zlmw Z:Icre>Ity ~Ihnyun acre t1 imu ulr gnrd - non-e±r fc,-T teet k ilJi~g ill~1.11-1, Ji»1i I1 40 feet lOfaet k . '-i ~ tcc! I `!elor for fo~r,far I!, of Ot . t a i I of Pr .t 11hu 111'~n h=iahf. i fort 55 EXHIBIT 9 P&Z Meeting Minutes of November 18, 2009 1 ri'WI?hAN AGLFT Jfu: Mo,/nq forwai.-d to Item 5 D, 1 There are i$_ Je., I h regard to tI _ 5_ !Pd go, 2 the G: I -cu~'= Can - dY2 for cemrnercial do ,elopme It -s stated ire the Denton plan 3 MS -q.-YSON! Tinank you, P1. Chairman. I Si"onld 3 iegardinq that s i'cr mmmr_rcial e T:- hls -,men ,horrid oca`F . d just pr,l up P o ,-i eo the pcdium for the est oft e ' ,ht 4 in apl opr.ate a ~ivity con _rs rati- than haphazardly Io atad 5 70q 0011 is a request to ap n is - ne n approx'rratzly 5,2 ,czt r, s bar ---'I tir€h it, to the forma , Of pot cornet cial 6 ,o ec or lu.rd from h; e NRMU, ide ghlho. hoop( F'e, Jr rtlol < 6 development. 1 here is nisa the issuesreat i J c isolated 7 dkstrirt to the NIRMIJ-1.2, Neichbor4ood Residential M_xed Use 7 _an',ng district n thi$ event. r 8 district 8 For these re sons, the L`ev P!ocment R.BView 9 A. Spe it Us° permit For th`,, site was ap,r^ved 9 Corrn lttee 1ecQrwpends denial of this equest. Tl.e applicant Is 10 an Lung Ls, 1987, which permuted the site I be a it Zed for a 10 presP i if you have any ^ynestIMS5 11 G'ri Scout council c t e and he iqua to s an i ac I iLy ai,a 11 CHFI I EA l N t,Dr eu hove. any 12 t arninq , ter. An endn Prat to ur Si ip was „proved 61, 12 gnestInn's of St f Dkay. Ca, S,_ laaka 13 eeeeober 6 no'7, rnrh Dorm tted u'p t 3J persons c camp on 13 COW ASSIGNER '.C-'HAAKF: V.~hat is ttrr, zcr.ng 14 t h_ sim n e rnig'at his rezon ray reques, is p 1I no the 14 IrmmLdiaieiv east of this proper ' 15 Applicant wishing to sell the property/. Because of the all, 15 0S, JAi t 0ri: R Is NPAU 2. ,O ha 'V to the 16 the SUP is ver,, skecfic in tf,e use of the s ,e It can only 16 excuse me, NR.-Z. 17 b r coed a nfrices for the GI Scout ore in,.'ation, 'r his 17 COtvf 7. SI_G Vf f _ S(f i A^KE: IS th t hie case ail the 18 - 4'P-ninq is , tutied to that t i, posal tc sell the property so 18 way °zp to is that Grady Lw e? 19 Ghat me nffices can br- used by other use 19 MS. JACKSON: Uh-huh. That's C'n 1 I anb right 20 The i.C is 1c ca_ d at 4000 VIest Un:ve- v Drive. 20 d5ere. , -lie, :3 C y Labe. ~ 21 t r ens of Masc cran.r_n Read and (-i dr .lie he e Al th's 12'1 C PiMIti5101`Jr :r HA. KE Aild so from the p"'i't of 22 4:rstem Clive gh_ along nc25,.. he site ice- am -n Iv o0rled 22 this p r-perry rp Ciridv Lan_, that i,, all NA 23 NR-2. The proposed zoning is NI,-1U-12, The future lard u,e rnap 23 r-IS - t. ~ACK50,! That's cor~ec 24 designation is eXlstip, land use. 24 COMMISSIONER SCH.AAKF Okay. Thank you. 25 . This is a vie,t, of the site from the southwest 25 MS, IACKSON: You are welcome. 73 20 1 fookr! , town ds t n th=cast, and you rare see the orfl-e T CH;.AIRP1AhS EfiGLE -O PI: All of that NR-2 that 'ruts 2 administration huPdi nq. This i„ a revfekv of excuse lie 2 1 )niOPrvty n 3Pn then=, i zm not see-^q -y de elopment there. 3 view of the Pastors side of tr, site icolci , h-iHrd t^.e port 3 You ay have covered that, but I 4 You can see In the back, ere hu adlac n r eider ial that is 4 MS JA( K~r,N, Welk. along the frontage here, Fight 5 iorig The north pro,, rbr Iire 1 i.!s ] ve of the V en 5 here Yee • ro de _ opmPn _ the re id-rr,ai is hack her._ 6 property h.ie, 2.gr' a!crig h,. e, he tee I,r is lib western 5 COM-1.SSIONFR BENT-E'(: There are solve srs on 7 propem! fine rich" here. Ann .5 s to view ,f the easrern 7 380. 8 property I lie, ,h'I_n is to-k here from tne.. tiaest 8 Mme. _;AC.KSC)N: There In a house her- and d ,csise 9 A. 3n the tats report, the site comply 9 here and here. But rigia` here, adjacrrt -iurur he-e, that's nor 10 Jrtti the rr-quired tirrli for ez.-,ping u he rhnn wh,d,. are 10 current y de,. 'nped. However, it is rc !d ntiai awry in 11 ;e fiA t it g reran a i. cues- conform 10 he future lane' use 11 hen:. 12 eleirooent of the Denton plan, and the prepo%d re?nr,. qI! 12 CHAI32MAN -hGLEFON: JkyAir,/ ether qucldons of 13 `ar,;l!rata the 941 prcesior of hn,)t,perb]Bon, neater, 13 StefP Okay. I` mt; if the Aorlrant is here and ,',l-es to 14 sewer, parks, a :A other o.cl'c .qulremect:s and public 14 speak, please cc down. 15 convenience 15 NIB. 4bAl KER bond ereoien, Mr. Chairman and 16 Sza'f sent out eight notices to p-e;.erty owners 16 Comm;sinner;. 1 am Co teen Wker 1 6,r the very preuri CFO 17 '.oc red t ithln zUC et cf `hc cub Pct -,it- and we r iv d ro 17 o l the Girl S ;u of Northeast xas. \n o cur b!;iiding is '18 re,por.,e - 1' DctJepmene R. ei_w Cvmmictee, s ter rwetving 18 located at 630;. _~urn,ners:oe D ve i,n DaCrS. 19 this r°cicrst, rei wn ne7ids dental of this rey7est, even though 19 I vda rat to thank you in advance for aiiowir+g U5 Ul lib this Site does opmoly With the required findings of fact for 20 -resent our re-rring request I Know you t,a=- had J 21 rezoning. while it w,-i.;ld be diaconal to go ahead and 3pcrove 21 very tul! Agenda sicca five o'clock, but Girl Scouting I:as ar 22 this heC30,e of the eX!Stirig L._~ the Sta€t has conre i Shout 22 incredible history in De.rton. And, in act, i.= 1917 t'ne',erv i 23 ir.troclucing mmmcrtrnal land rs s nto a It2 that is rCther 23 first: Csirl Scc:ut tronr f-Trnfd r, the Sla"c of Texa. bras torr-,ed 24 rural and ha, ne adl --cnt coinmercia: uses in the area. It !s ' 24 nght `,ere by GIc. Beulah Harris, which Is p'ettp etruin., in 25 primarily residentia on the 1-.0t ~erp side 6f University. 25 terms of ;Irl SccEt history. - - mm FVsNNIPJG :Y ZONIIV e3 PIBi iC. HEARING NO,M6FR 18 2009 a' as i ?c '-ay ride ser✓p S ✓ ~g pi 1s n n[ ea and 2,7031 1 arcr t u ai erg n ~r, I am b a of tats :-s But our ,irl 2 adults So ihat_ nearly 8,000, tciive Girl Scn1 is and aauft 2 Scou< rn,ti ut ; -G t the last 6G rJ ual~re cut rcith tl'ese 3 roembers. SD we al -y i jr, this camrnanitY• 3 stars. If a Dori is jr Girl Scouting for "eve or more years - 4 The property in q e,stion is effectually known as 4 and, P.rents, this is goo .o listen 90 Lercef.t of our girls 5 cur bi-. It is at 1003 'N es: I,-r r- =ast Imwersity F;iive. And ~?~e ~ 5 "Al net fael pr -ui Yr r inx wirnh = pa eft m1 not o" Piave ovrmed it sine 1927, vnich you krmN. l l the fir t 20 5 eel pressur=ed to experiment with ifEydi drugs, ,o per,.ert 7 years yci, knew us as Crosstimbers Girl S; out ( our, 1. And tv;o 7 will never exp ierrce a fe,..r pregnancy. And only one content $ ears ago, as par cf a nat ma. reailgiri rent with the GO 8 wi'l,I er sa Deft e a juver ile court. You mlght think, v1ph, 9 .=r cute of UtS.A, vj, _ have gy.,ne frorn ?-L count down m 112. 9 is that impnrta r.? Not im?ortanty Well, 25 Rerz~eni of all 10 tt:r e legacy un its hava a- iolr. d h3gether, 10 you r Euaie go w, xeiore a iuvie curt t,day are q.rls_ But 11 sw tin r~ Red Riv °r Valley, arid iejas. And co noire we are 11 if you arc, a Girl Scout, c ncas are that won't happEt. 12 the Gin routs o Northeas Texas. 12 Y,) u know, very sinpls, I an'. `er to ; fiat you 13 8or h past I a.. t 'w c) yeas b= Ne here bean. 13 s uppo t n work We can- have, I i know, we can't have an 14 iooklrg eT h im; we can best n_ ve our g is and cr r fa if'y. And '14 as• et ,hat ovou J cannel the q:rls. VV C ,.e PC'- be rr, good 15 we have to be true tc our -nission in all that vde do. And it is 95 steward' of ""hat sat ut to do. Ard, just v-_iy sin-~p;y,. I - 16 a very -mpls~ i"a"'..,n, and I will share it with you tonight. 16 respectful y ask on penaif of the beard of directors acrd al! 17 Girl Scg builds g'°Is of cnurade, con de_ce and character 17 the g`ris tha°Ne ,^_rvP that you corider this rezonr.g request 18 to rnake the :world a better place. It a mission that gets 1 18 and r;.l. it forward to the G ; IcIl. So, Larry 19 oi,t of bed evei-y rromirg, and my feet: hil: the ground and eve ~ 19 MR. REICHH,ART: Larry Relc.nhart Spring Brook 20 sLart running. 20 Planning Group, 24C, Muan9 Drf, i r G apevine, Texas. 21 We na'. met vIitn our volunteers and our farni!ies 21 y'd_ U !J talk about quick!N ~h,hy w- 'l 'here tonigh', 22 pretty rtensiveip ovor the past year, and the Icg cabin co 22 r-aaily, to ut;li7e the property that Yuers cast u'iii;e the 23 Ic ry-r sons s our reeds. V ri imply, vwe 'iav± puil the 23 property for office use. A u, >oin p tu-e r rn staff 24 D u i;ing. Fie cabin is r too small to serve our c Llirg 24 already o` The into usd, again, there it(- ,,cis in residents. 25 rrembc ship. Jr vc slry west of ,5 Is well tea aiud h.gt;way, ~ 25 Right adtacent'v us is a pasture. But, ra a riart°r of fact, n2 IY,rI 1 and tire Texas Depart,rent of rranspc=r atlon li _i-eased their I the property owner is here tonight. 2 access to the :-oad. Thev haven't bul t yet, bit they have 2 What ,we are lcokinq a t`re building is 3 assu-ne7 an o(rtu na<I of I ~d 3 akpr r fey b) fee, from the rel. of tl;e pi.cpeity hne, aver 4 As you might ningmt. a,e rlcn t .jse the site for 4 50G flee to slur r io t.s. resO nth. It IS funny. e❑ can 5 camping anymore Q,, to hen stir, it is too busy and our 5 locate a gas we , or rhos property wif h fh_ =sistir Zo➢Inq Fi harem do , fee cci °ortabla with ou air!- camping toe;, 5 ✓toth y water pr ertion pf fri but you ca-'t utiLse it - 7 0' c have a adnn.'erful Camp site In Aubrey: lust a little ult 7 enyhc ly else utilize it for an office. 8 nn th ,,,f here ~o we use that it teal 8 Pr r tc t(e L r - ;e corns c4 irng tie err- _y, rY it 9 St w are to iglrt b rune we wofcld like to 9 wa> , by a veto; L.a-ia little b closer, there is 10 sell the pr p t+,. q ld uafortuni 0y, it has little n rc 10 airil, an acre, 37.000 thrt: and s,y rarr foot rf farvitws s rface 11 v ice i ,✓e self it as a residents-oil l leer n p rope,rty. And we 11 l this rraperty. And It i7 uo' your i iplcal res d~ itiai site. 12 have dote a lot of research and two have talked to ealto r.> and 12 Vihc r._ we fro U.>. 38 r), rovhlsh is a primary r!ajor 13 we ohms, -lets a!;y had two off r_, and they have h,rh swali;ed, f 13 artert~. Add ionaGy, the ell propi encL,m'.,e.red by 14 c ,c was f iearter i , Lo a r ion pmflt a p~cialrv in this ~ 14 flood That s ycfng to limit redcd ~lopmert potential oj, 15 ecomamy ber;nls c t o e teen i_, xc _I fg. 15 chat plaperty_ What y . see basl_all'/, What p;u get, is 16 Sn t u., re have, ki t off„urd ours-Faes i,-' a 16 'has little ct ce. 17 pic kit, quite honestly. When I think ahei.. tryin_ to soli it 17 within the Staff :,pert, some of the coiTwe.lts; you l 18 as reside ,tiai, I am a mother cr and having a youmg family 18 know, .,Sth an c caoli het r s~danUai area is na_sv deve_lonmi ! t 19 1 rni-ik it is hard w h a log cabin light there. A.nd our 19 shall respond to ax;snng d v eloprnent. fNe:l, this isn't new 24 families don't feel comfortable pulling in off the road. ':o we 20 development. It has been oft the properly for over 20 21 found bi sier space n tCCwn, And we need to honor the needs of 21 year . 22 o,;-faiii;iNes. 22 Addtoually, he pi-riporsed Neighbonccod 23 I ,.ant to tell yo:, just rwro small tr-ohcjs before I 23 ;ieslcential P!;xed bs 12 dist-id is part of --he Neighbol 24 '-jr, it .onto my coteague, Lary, The value and the need 24 Residential land Ire ate. Dry that was created to orrser✓e acd 25 for girl scout ag an't be cve°emohasized. And as an 25 protect existog nerghborhoous arid to ensure t sae a~•ry newt r I-ANNING, & TONING PUBLIC 11--tP NG NCVEMBER IS, 2N,, - T--- 35 3+ 1 devei pment Is ccmPah'ele. r P,in. ,st s±arl reasoi-r that 1 NR-2. 2 if we get thatzo rlnq, we ar t'11 preserving and proteeti.ng 2 CH-RHAN FAG,-ETON , )key. An✓ iesti^_ -5 of Larry 3 the existing nelghhorhood, eskcally wil-1, the:`lo-d piai, 3 or 'he. Aoplicar- } r3kay. It roi-, vee All ,ptn the Public 4 limiting 1evoI pm r.t r the pr pErL;, 4 f icstn a_ tiffs iore.Vv jon t havc any cal he only i:acrd An tr-r,tat_ement trc r.'rgc~ization of Cominercal 5 I nave here is, nsn Larry r next. but du we h rF an;cne In 6 Land 1.,e gl,als re,ardrng the actlmy of nrighbortor d center 6 the auclil nce? Okay. Sor r. We do h.ve ,ne pe s who ,-oriel rather than scat- d sitzs 0, h-q viay strips, I mew,, there 7 liia^ te speak, it you Will rcnr Cowin nrd tale v ur naMe. And 6 are ri~_aily fe.v neighborhood rter . r ad! t onai devrloprr=rt 8 1 will jut repeat for hose who may not hate t he 9 in DcnLUn is still ,our tlac,,,-D el rust al development I 9 carder, yr u have thre _ ininu7es to speak And ie tine trill be 10 don't %now If we are s 4lu :g this site that : hen there ~ 10 nn the wall over Here. II over 2G years, and I dol know if o1-.e property constitutes 11 M- I-IIi PIRT: My nanne is De.erah Hdpirt, ;'?p? 12 st :p de ,elopment A d, to ri Prone.Rv ;rat has been a 12 lariat. 13 ionres denhal use for over 26 years that is a ±)ac nt to 3317; '13 Our pr eperty adjc:ns the Girl Scout property. 14 across the street from iiidustrlai zoned property and adidizent 14 Orig . rally, all J that property belcoged to hoc Harding, He 15 to single-family, is an appropriate location fcr the NRMU-12 15 built C. residents, he br„ Ot a barn out of lugs. Ne built tt;e 16 z,,iir,g. 16 cabin out c log And ha ] gated th land to th I ;coots i 17 Adnitlonali,,,, re,s di^, tr_ Organization of 17 and b i!t err far iris, in 'he ,arr,-C rnanr„ r that o 1r ha n an(J 13 :ornrr r ial sand tls s rategies, it does :ev eomnnercls! acr.Fvlty 18 -;u-._abin. It is of . it does not lcok like an base. And 19 or Iseighborhood - hers are he rrceferred !or_a6o r etell. 19 he nave Them tt C^ gwill, :and he Ihred there ovith that In 20 1t does n t say arty err is pr l11leited. r ➢r of vs th use are 20 good will t-.cau it - itch hl prope 1 it did o' look 21 prefere And, agaro, Deatrr traditionally 15 ,ton activity 21 like an office develo sment. It was not mmmercla operty- 22 cer ter development. Andr ay n, I bcie✓e an existlr-,g 22 And I don't thinly h , ervisicr d eelrg offices built there, 23 s;njcture cil not that has been used for r:onr'csdendal 23 other town the a l -;rar•_ s Isn't that wl-i he dona. 'h. 124 _ses for v?r 7.0 yra-s is ret_ nap5arardly chosen, as is Brie of 24 propel 25 the goals ire the Denton c. - 25 ML. N1AtRER_: I don't ha,e an ems,, r_^,, ko that 55 38 1 Arid. asair, S think the comprehensive n are is nn 1 question, 2 verai!i plait. We know that a .,,enei a guide far the city covers 2 M5. HILPIRT 1 can, roll a ;t I His daughter 3 bmad ;epics, geogral)Nc areas, and it sheuidn` bbe fire 3 was a Girl Scout, and thai'rs why he donated the property to te,e 4 fr, tirg factor her !r er:aly7-era the z:anirn request And this 4 Girl S ou I don't think he envsicn d it as an r5.et tc be 5 site dcesn't fit the mold forthat . It has r een ased ?-or the $ trade-.ti oh, 6 sameu `f,r well. over 20 year;. Ard, _0a said it r 6 CHAYRNAri :AC-L-Io~^i: I veuiol ask you ton eogaga 1 i cor tc a pr'rn f, nrajar arterial ncr s he, sweet fr om 7 the audience. Sf yc-r iil dI cc your comment this v .y 8 roiautral _oning. And rhic site I-i limited retie-1U,.rnent 8 MI H[Lf IRl . Pod rl-y horse and c i., nrocld 9 potential ber_ause of the flood mein. 9 appreciate not a iot of traffic right at tna Fence, because 111 I be..-Pte -hat t fe re7cnir.q to NRML!-12 is 10 that's where they li.o, too. 11 appropr-ate. It prov,des lirritatipns that protect the ldiacent 11 CNP.:RhIAty EFlGLETON: ';e I take. It vru are in 12 rasidenual. The nood Plain alone vaili do that H„t it 12 o,?pesitcc i 13 allows to, funrtiona! nee of the property, its not very often 13 MS HK PIRSF Yes. 14 you hear Staff sav t'-e appkco,l meets the re,,u en imdts, and 14 Cft RMAN FAG ,-U _ N: Dc -ve have anyone else r•eho 15 it night 1, practlt;al Arid, yct they still rerun Wend der l 15 wis'nes to spea'k` Anyone ;rho wishes to speak m sup,e_c r 16 do .r,'tseen, to make sense in th~, ca . that 16 ArYyone else? For the tirird tine, ,.,ryone else:? it not-, we Witt 17 Viet site that was la .qr d fcr t i e us cant t atli ed by 17 c!,,se c Pt alic H wring at this time. C,nmmrssioners? 1 19 - omeore ocher than he Girl curs Arid entl tl at I .."i, be 18 Commissioner. 19 nappy to ans.aerany noes?ions Arid f do know w1rv it was 'I 19 ;Can MSSSICNFR CHAAKE: I am not sure if this is a 20 r- stood r I:Mf,! nr NP-2. I k,l .,,h,, the other side eras, too, 23 questior o' a rorra-cnt. Ir, ferms of the zr, iron in tow.' area 21 But: 0111_ h,nest!y, it is a simple matrix. If the p:-uperty 21 could r,talf vibe die! C1rdy qo? Ycu ..Dewed where rhere were 22 had one-- -oohs cars lTiir_ation and it was In :.rc use ca-e- nry, 22 11111C alsting bosses, I. uei',ewv, a!orlq fhere. But I don't 23 1, tn,ls case non iibonc~ed centers, €t co*-re cut NR-? We didn't 23 believe xe have dr-l residents abutting .d0. 580 is like a 24 In k. st. each site Find say, well, wo did not zone the city. Vle 24 na;nr try to te conslstdnt ttrcughout. TI1at's wing thin is 7onrrd 25 Ci7Py 9ISS'rCNER BFITLEY: titre do. PLANNING z ZONING Pll$LIC ri_ARINC. NOVEMBEF 15, 2009 89 ~ g- I ',:oMMrSSIGNEF SFHAAKt 4~uL R 380? MS JACKSON: 1 :ey n7rid have to dL a lit olfso_", 2 171JMMT SIOPIER EFNF ~y ye,,, ,,e do. 2 plain .itigarcn. Ali of tht= -nn,ider d to be. stre-,m ESA, 1 3 175 JACKSON: R aht s.- 3 Stye, n buI'f_rF A eIl_ 4 CO 1I~SiONFR kit lRt`: There is r.-on, that that, C[.P lL~rGNEF. THOMA,. Nor coU` h_y e,,en gcta 5 Lhat that _ c ial is not lnrowm..g. 5 1 permit _o ^xpand f current u ,lldinn? o MS5 JACl,5ON: i na aer!al hich vas gone in 2007 at 6 MS. JACKSON I ern sorrv'r 7 thatti'n -hawed trvs one ny ,,_re. 7 rOF•Mi:.SIG'JER THOP1r^._ Her could t7ev Beta 6 CCM MI'nS:UN'=R SCr,AAKF Slut tlut one 'o set Leek a $ build q Pe~ r k. to expand t l,,- current Lrl.dmo, correct' gooc! drtan_c from t, gh,•. M. JA'CSJt1 NI,, they w uld n I thsy ,,ant to , 10 CHAR L,N EA:,LETON, i a--, gciny Ie hate to a_k you 10 do an} ]evolopm _rt on the site, tl ri l Sb_p ouli-I be 11 tr.: eft L., please Than, yon:. 11 ena =t an ESA _v,li.ahc, h tl e sire to determin vd~N? w; zt 12 NER C AAKE W -,,iniee se0 hemp thh 12 the fmi,cLOn, of he E ~A ilo I pain ar tre°-h -A are. 13 major r0rnr2. ar_that is be J-.idnndJ , a-eve a_Ithe ~13 COt Mr SIG^rR Tu,pMA Qkay. Tlr kycw. 14 weY to tl e. vilest, That svculd nave vp i difficult fur ~ 14 rNAIRM MP EA,L _T0l`J: Any oG,er r 15 ..dent,,- come E ,--e to a, i Chln:sun e, i.,h-r .ype 15 Ckaq r x:htiss o Y r Bentley. 16 zo,Ingis ieally ipuorr'atc fir this. Ind, ag9lr, re° a„egot 1s CC`Ilh!SS0l4r'; EEENTLE'v': Patrice stlrr~. 17 a piece -f property .yin a Ili od plain that is going ro ba 17 CO'7R^I:,SIUiaLR LYKE: As r u, h L< I . Nreriate the 18 r-tri-tive t0 Yne tyre Dif d_veltpmenC th t can pC -ere. 18 c,iri S-A of .Af ~ !ca, I el,,a u,lr, e i:it`i a re.hor.' 19 M5. ]ACKSON 'fe_ tt teas gat -v real 19 requc . !hat's v d,cated on tid re2c! r croneth= le, cc of 20 ;im'tat i s mLl, regard to the f l2od plain issues. 20 an,, in to tr; help an,bod, make rr.r I woe about the 21 CO:vrt ISSICHFR :SCH.AAKr •Nhlch, li '.ts !f, P'O'ides 21 prececc nt-aetLng nn`ure I,' a decislr,n based u.'en t _r-aumc,':t 22 buffer, I pres., !ie, c t ~ eign r l~, .A:rtl, I mean, cats ,n 22 [rat l c nnot sel -land a, t i .-o P '43_C -r..a_ to r 23 estahli he d nrignh r` lus _Pict d') sjn protect ,ery much 23 Nfht. I dc hJOI:, I naiYze `at thet2 cr^ buffer;;? 24 o. B,, n of _h n3l.fr3l fe a--r_c or rh,, oils are Gong to 24 f real at you n h JA L, A i is al r ,n i!rd b the 25 b.. nat~ al bufL a ~..II, rmh'.2 25 r.R-2. a d t, ne yht.o Lcod behi ,her ,hoc ,pot _ 90 I!2 'ACKSOI`!: C_fi nitel v. 1 zorilr:g is ,curet=tin.i that's d-."ilea hvtl e c,>, :Is, -,t .n -nert,ng 2 CCINNIISSIONF°R SCHAAKE. i don't set h,;, v e can 2 that's de_ lecd uy us _.ut i h e dr,ro: tv Suppc -ring a 3 -rtdir ' hat cart: ar zon6r,g there, and sc 3 repot, ] m fir =i': usticn. ! 4 ,.v,^9 MI,SIt]llFh eFN?LE'f: Gr. SchaaHr, _~u ead ta 4 C. hi,4i RP4P.r`! FAGLF_TON' Okay. tC rem s.~lohe-" 5rntcy_ 5 ki,i>vd tl ar _-e are multiple h _ , ,-u the has of there. Ad 5 CC,"VU SKI NER BFNNE'IT. I ar, goFr , second 6 `hat ,ah d-.aeieNn ent, and re n_ r_es ever `;ehiwd Lnett, s,;:re 6 e, nctly what Pat, Ice said. I drn't think t is this 7 all aeve"pea as s-mall horse -ar,:rhe_s. 7 Comrn _ u!,ty `o en,an,;c ialue by $ COi•IHry ;TONER SCHAAKE _s, I realize that. 8 what s-c here for. 3 CNAIRMAPJ BAGiF-ON: 64ay. W, ha ^f_,r1r 5 CHAT .`sgiJ EA_LE ON. Any nt'ner ctn n;': LSr Qkay. 10 homa p ease 10 Just to make i am goer i o;:lese _he rudlic Heanng and 11 <_%M N1ISf,IOaEI T`OrIAS' N y qu ston in;tn.t~ cr5i 11 up~.r the fl-co r for tither more cr.mrnenu cr a motion. 12 L`o.m qr, As I and stanrJ 11 - Td You put fna flood map 12 HS, WALKER: P,, i a1oi od ti, come. hark up er nnr' 11 13 sack up? 13 CHAIRMAN FAG- ETON: L 14 MS.:ACKSON. I don't have the hood -i here. 1, 14 the Public Fieerinn. l 15 is in yosr report. 1s P1S. VdALKLK: I have, nevgr done This be`or^. I'm 15 IiiR. REICFI;' APp: i have 6n mine. 16 nctn, 1' NS ]AeKSON: ;;ka,, grind. The;N. 17 CHAIRMAN EAGtErow: That's au ght 13 Cori nifONER TFi. MA : Okay. The- da ke blue is 10 COf 1.7°t~~7fJ F_.t BENTLEY: J wil; maV L, a motiee to 19 that s fu d way or th : , that ,art he trod plain? 19 deny. i 20 Mh, fACKSON: T rr , _tra m. 120 C'IAIPP.IAPf EAC.I ET :N: We have a ° otioc em the rloor 21 COMMISS'iOArP THOMAS: S. e, Jry 'ell of the prnaert, 21 to dory the reque,t ;y Come _.n _nei Bentley and a second by 6r. 22 It ti,. r-=_nUy in the flood plain? 22 I_yke. P;res.e vote on he ~-rd, rind a motion a voce of Vc, 23 1- !AC.ASOPI: _sright. 23 ,mould oe -n,avor of .wer i. Ant a 1.1ho of °n would to in 24 COM IISS?CNFR FHCI AS: Sn if Gee rN was rn 24 favor „f approral Okay. Ths nict on i m 25 cmvn, t _L rtocn't yet s perm, r; bolt, -,,F r b_ih;ing' 2$ fCCmrnls-ioi.~-: ca5. aor:, Ryan. and S-h.aake FL:NWli?13 &ZVViNG PUBLIC- HFAIflNG NOVEMBER 1 a 2009 P., 1 voted no.) 1 2 CHAIRMAN FAG ETON Ol rho jt i a mo`ior to deny 2 3 for the three Tha k you. W~ du ec' "m take bout a 5 e 3 4 minute es>, Ntn will taRe a'i 'e te recess ta~,lno m v, 4 4 Break taken fmr)% 9:02 p.m. to 9:14 p.m.} 6 6 7 7 10 10 1' 11 ~12 12 13 13 14 14 155 1s 15 •10 17 17 18 t$ 19 19 20 20 21 21 22 22 23 23 24 24 25 125 94 Q6 1 1 2 2 3 4 4 5 5 S 0 7 7 9 S 10 10 11 11 12 ~12 13 13 14 14 15 15 15 16 17 17 18 '13 1`d i19 20 20 21 21 22 22 23 23 24 24 25 25 PLAN~aWG & ZOhlI~.G YUf?LIG HEA4 NC NOVEMBER 11 . )R s:lour dacumet~tslardinances1~41z09-~0 ~ 1 girl ~cou~s~2}.hoc ORDINANCE NO. AN ORDINANCE OF THE CITY OF DENTON, TEAS, PROVID~N FOR A ~ON~N CHANCE FROTVI THE NEIGHBORHOOD RESIDENTIAL ~ ~NR-~} DISTRICT CLA.SSIFICATIONPND USE DESIGNATION TO NE70HBORHOOD RESIDENTIAL MIMED USE 12 ~~-1 ~ONIlVC DISTRICT CLASSIFICATION AND USE DESIGNATION, AND SUPERSEDING AND REPEALYNG ORDIl~ANCE NOS. 57-113, 87-154, AND SPECIFIC USE PERMIT 5-193, ALONG KITH ANY SPECIAL EXCEPTIONS OR ~,EGAIILY NONCONFORMING USE STATUS CREATED A A CONSEQUENCE OF THE ~ONIl~G CLASSIFICATION CHANCE IN FOR A~PPROIlVIATELY 5.~ ACRES OF LAND LOCATED AT 40~~ . UIVERITY DRIVE, I~EC~ALLY DESCRIBED AS RANCH ESTATES, BLOCi~ E ~ CORNER}, Il~ THE CITY OF DENTON, DENTON COUNTY, TEXAS; PROVIDING FOR A PENALTY IN THE AMOUNT OF ~,OOO.a~ FOR VIOLATIONS THEREOF; PROVIDING A SE~ERABIIJITY CLAUSE AND AN EFFECTS DATE. ~~D9-~~ 11 } AREAS, Girl cants ofNortheast Texas initiated a change in zoning for approximately 5.~ acres of land depicted i~. Exhibit "A", attached hereto and incorporated hereby by reference and legally described as Ranch Estates, Black E ~ Corner} thereinafter the "Proper'} frorr~ Neighborhood Residential ~ ~NR~~~ zoning dist~.ct cla.si~icatian and use de~gnat~on to Neighborhood Resxdentia~ Mixed Use 1 ~ ~NRMU-1 zoning district classi~catian and use designation; and DER ~A, an No~en~~er 1 ~~a9, the Plarmin and ~o~.i.~n.g omisian cancluded a public hearing as rewired by lam, and reconunended denial of the requested change in zoning; and WHEREAS, a ~l~ ~na~arity ofthe City Council finds the change in zoning is consistent with the Denton Plan and the De~elapment Code; and; NOS, THEREFORE, THE COUNCIL OF THE CrTY 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 zoning district classil"~cation and use designation of the Property i ~iereby changed frarr~ Neighborhood Residential Z ~NR,~}zoning district classicatian and use designation Neighborhood Residential ~ ~ R[JW ~ zoning dlsct classlflcatl0rl and use des~gnat~on. SECTION 3. Speci.c Use Permit 5193, Ordinance No. 7-113, and OrdinanceNo, ~7-154 are hereby superseded and repealed by this zoning amendment, along with any peoial exceptions or legally nonconforming use status ~rhich may have been established as a consequence ofthe zoning classictian change in i SECTION 4. The City's official zoning map an~e~ded to show the change kn zoning district classification. SECTION any pravision of this ordinance ar the application thereof to arly person or circnstance is held xnvalxd by any court, such invatidxty shall not affect the avidity of other pravisians ar applications, and to this end the provisions of this ordinance are severable. SECTION ~ ~ Any pe~so~ a~oltin any pro~.sian aft~is ordnance s~.all, upon conaictian, he fined a sum not exceeding Each day that a pro~.sion ofthis ordhaance i violated shall constitute a separate and distinct offense. SETIO~T 7. That this ordinance shall hecarne effective fourteen ~l4}days frarrx the date of its passage, and the City Secretary xs hereby directed to cause the caption of this ordinance to he published twice ~n the Denton Record-Chronicle, a daily newspaper published in the City ofDenton, Texas, within ten days of the date of its passage, PASSED AND APPROVED this the day of , ~ MARK A. BI~RROCx~S,.1VIAYOR ATTEST: JENNIFER wALTERS, CITY SECRETARY BY; APPROVED AS TO LEGAL FORM: A.NfrA URCxE ~ ATTORNEY - i ~~A~'I~~ ~ViAP F i~ U SET ATE ~U~~ri~ersity$~rive S~ m~ Lm AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Planning and Development . ACM: Fred Greene SUBJECT - Z08-0016 (Pine Creek) Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, providing for a zoning change from a Neighborhood Residential 3 (NR-3) zoning district classification and use designation to a Neighborhood Residential Mixed Use 12 (NRMU-12) zoning district classification and use designation, with an overlay district; on approximately 15.13 acres of land located west of Stuart Road and approximately 600 feet northwest of the intersection of Windsor Street and Stuart Road; and providing for a penalty in the maximum amount of $2,000.00 for violations thereof, severability and an effective date (Z08-0016, Pine Creek). The Planning and Zoning Commission recommends approval of the request (4-2). BACKGROUND The applicant (Rick Baria) is proposing to construct amulti-family development consisting of 113 dwelling units. The 113 units are comprised of 106 side-by-side units and 7 units with second-story dwellings. This equates to a density of 7.5 units to the acre. The subject site is currently zoned NR-3 which does not allow multi-family developments; therefore the applicant is requesting to rezone the site to NRMU-12 with an overlay district. Per the Denton Development Code (DDC) the NRMU-12 zoning district allows multi-family with a limitation. Limitation, L (4) reads "multi family is permitted only: (1) with a specific use permit; or (2) as part of a mixed use development; or (3) as part of a master plan development, existing; or (4) if the development received zoning approval allowing multi family uses within one year prior to the effective date of Ordinance No. 2005-224; or (5) if allowed by a City Council approved neighborhood (small area) plan. " The site is currently undeveloped and is not platted. The applicant's original proposal included amulti-family development with 121, 2-bedroom units, equating a density of nine (9) dwelling units per acre if units were stacked vertically, and eight (8) dwelling units per acre if the units were placed in a side-by-side configuration. The original proposal was presented to the Planning and Zoning Commission (P&Z) on April 8, 2009. After conducting a public hearing, the P&Z recommended approval of the proposed development by a 4-2 vote, contingent upon the following conditions:' 1. Uses are limited to residential uses only; 2. The maximum building height shall be 3 3 feet; 3. A 40-foot wide vegetative buffer is required abutting the residential subdivision to the west, using existing vegetation; 4. The maximum density shall be eight (8) dwelling units per acre and dwelling units in each building shall be constructed in aside-by side arrangement; 5. The maximum impermeable area shall be 50% 6. The parkway shall have a minimum width of 9 feet; and 7. The minimum side yard, as measured between buildings shall be 3 0 feet; or 15 feet, if lots are individually owned. Subsequent to the P&Z's recommendation of approval, the proposal was presented to the City Council via a public hearing on June 16, 2009. Due to extensive neighborhood opposition and concerns expressed at the public hearing, the proposal was tabled to allow the applicant the opportunity to revisit with residents of the neighborhood and to integrate their concerns into a revised plan. As such, the applicant hosted several meetings with the community in an effort to address their concerns. The last meeting was held at the North Branch Library on Saturday, January 23, 2010. The concerns raised at the meeting are consistent with concerns raised in meetings prior to the January 23rd meeting. They are as follows: • Rent range and occupancy factors; • Residents suggested that they would like to see the property left vacant, developed as a park, community gathering space or a garden; • Residents were concerned about the habitats and where wild life will go during construction; • Air Pollution, disruption of the environment and safety during construction; • Duration of construction; • Residents to the north did not want to look through their windows to see large buildings in their backyards; • Neighbors were concerned that the development of the site as amulti-family development would over-burden the neighborhood schools, sidewalks and roads. As a result of the community meetings, the applicant made several revisions to the proposed development including the following revised overlay conditions: 1. Uses are limited to residential uses only; 2. A 40-foot wide vegetative buffer is required abutting the residential subdivisions to the west (Cooper Landing), to the east (The Village, Phase 1) and to the north (The Village, Phase 2); 3. A 25-foot wide vegetative buffer is required abutting the residential subdivision to the south (The Village, Phase 4); 4. A restrictive building zone of 210 feet (identified as Zone l: 7.58 acres on the attached Exhibit 7) as measured from subdivisions to the west (Cooper Landing), east (The Village, Phase 1) and north (The Village Phase 2) shall carry the following restrictions: 2 a. The maximum building height shall be 3 6 feet; b. Dwelling units shall beplaced in aside-by-side configuration; 5. A less restrictive building zone (identified as Zone 2: 4.75 acres on the attached Exhibit 7) shall carry the following restrictions: a. Dwelling units may be stacked vertically, provided the upper story dwellings are provided access by a covered stairway; b. The maximum building height shall be 40 feet; 6. In both of the building restrictions zones (Zone 1 and Zone 2 shown on the attached Exhibit 7), the following limitations shall apply: a. Building setback from the buffers identified in condition #2 and condition # 3, shall be 12 feet, excepting typical projections such as eaves, bay windows, porches, etc.; b. Separation between all buildings shall be 30 feet, except in the case of one-story garages, which shall be placed no closer than 15 feet from other buildings; 7. The parkway width shall be 9 feet if the site is developed as a gated community with private streets, or as wide as allowed by City Engineers; 8. The maximum density shall be 7.5 units per acre; 9. The minimum permeable area shall be 50%, excepting any ponds. In addition to the aforementioned community concerns, the City Council expressed concerns regarding whether or not a super majority vote was required to approve the rezoning request. State statute requires a supermaj ority vote from City Council if at least 20% of the owners of the land within 200 feet of the site being proposed for rezoning are opposed to the request. Concerns were raised regarding the City's notification process and possibly excluding city- ownedproperty from notifications and computations. It has been determined by the City's Legal Department that individual notifications to the City of Denton should not be mailed to the City because individual notifications are sent out per the most recent municipal tax rolls and because City-owned property is not on the tax rolls, notification is not required. However, city-owned land is to be included in the area calculations. State statute (Section 211.006) specifically states that the area of streets and alleys is included in the computation. Since the City does not typically voice opposition, the effect of City-owned land on the 20% ratio is typically in the denominator (diluting the protest.) At the time of the City Council public hearing, 17% of the landowners were opposed to the request. Additional notices in opposition of the request were received the night of the public hearing. City Council was concerned that this did not allow staff the opportunity to obtain an accurate count of all property owners within 200 feet of the site in opposition of the request. Staff has included all notices received to date in the calculations to determine the percentage in opposition. The Planning and Development Department sent notices of the P&Z public hearing to fifty six (56) property owners within 200 feet and one hundred twenty six (126) courtesy notices to residents within 500 feet of the subject property. As of this writing, staff has received twenty- 3 five (25) responses from property owners within 200 feet of the subject property in opposition to the request. The 25 responses received in opposition represents 24% of the total land area within 200 feet of the site. Therefore, a supermajority vote is required by City Council to approve the proposal. No additional notices have been received from residents in support of or neutral to the request. PRIOR ACTION/ REVIEW December 8, 2008 ESA08-0020 Western stream buffer running north and south has been removed. The configuration of the stream buffer located along the northern boundary of the subject property has been modified to run along the existing drainage creek located north of the site. The existing stream buffer will not affect development of the site. April 8, 2009 Planning and Zoning Commission public hearing June 16, 2009 City Council public hearing OPTIONS 1. Approve as submitted. 2. Approve subj ect to conditions. 3. Deny. 4. Postpone consideration. 5. Table item. RECOMMENDATION The Planning and Zoning Commission recommends approval of the request (4-2) subj ect to the conditions identified on pages 1 and 2 of this report. The Development Review Committee (DRC) recommended DENIAL of the original proposal. However, the DRC is recommending APPROVAL of the rezoning request contingent upon the concept plan presented as Exhibit 7, and the overlay conditions identified on pages 1 and 2 of this report. A detailed description of staff's reasoning for recommending approval is provided on pages 13 and 14 of this report. 4 EXHIBITS 1. Staff Analysis 2. Location Map 3. Existing Zoning Map 4. Proposed Zoning Map 5. Future Land Use Map 6. Notification Map and Response Information 7. Graphic Depiction 8. Planning and Zoning Commission Minutes (April 8, 2009) 9. City Council Minutes (June 16, 2009) 10. Zoning Ordinance 11. Site Photos Prepared by: Johnna. Matthews Associate Planner Respectfully submitted: Mark Cunningham, AICP Planning and Development Director 5 EXHIBIT 1 PLANNING & DEVELOPMENT S'T.IFFANALISLS' CASE NO.: Z08-0016 DATE TO BE CONSIDERED: February 16, 2010 LOCATION: The subject property is located west of Stuart Road and approximately 600 feet northwest of the intersection of Stuart Road and Windsor Street. APPLICANT Mr. Rick Baria. 5138 Edwards Road Denton, TX 76208 OWNER: Trans-Atlas Financial P.O. Box 2051 Del Mar, CA 92014 REQUEST: Rezone the approximately 15.13 acres of land from a. Neighborhood Residential 3 (NR-3) zoning district to a. Neighborhood Residential Mixed Use 12 (NRMU-12) zoning district to allow a multi-family development. The applicant is also proposing an overlay district with conditions/restrictions. RECOMMENDATION: The Development Review Committee recommends approval of this zoning change request, subject to the conditions listed on page 2 and Exhibit 9 (Zoning Ordinance) of this report. COMPREHENSIVE The subject site is located within an Existing Land Use/Infill PLAN Compatibility future land use designation. DESIGNATION: SITE AND The site is currently undeveloped and is not platted. SURROUNDINGS: North: Neighborhood Residential 4 (NR-4) - Single Family Homes South: Neighborhood Residential 6 (NR-6) - Duplexes & Multi-family East: Neighborhood Residential 3 (NR-3) - Single Family Homes West: Neighborhood Residential 3 (NR-3) - Single Family Homes BACKGROUND The applicant is requesting to rezone the subject property from NR-3 to INFORMATION: NRM T-12 to allow a multi-family development, with consideration being given to an overlay district. According to the applicant, the overlay district will "assure neighbors that any subsequent owner will be obligated to substantially follow the initial concept." The applicant's proposed overlay conditions are included on page 2 of this report. The subject site has been vacant for more than twenty-five years and is 6 currently not platted. ANALYSIS: The subject site is located within the "Existing Residential/Infill COMPREHESIVE Compatibility" future land use designation. A description of "Existing PLAN ANALYSIS Residential/Infill Compatibility" from the Denton Comprehensive Plan reads as follows: "Within established residential areas, new development should respond to existing development with compatible land uses patterns, and design standards. The plan recommends that existing neighborhoods within the Cite be vigorously protected and preserved Housing that is compatible with the existing density, neighborhood service, and commercial land uses is allowed. " The proposed zoning district; NRMU-12 is consistent with the above Comprehensive Plan Designation. That said, a comprehensive plan amendment is not required. The proposed use of the site as a multi- family development is consistent with land uses in the immediate area. Directly to the south of the site are similar land uses including multi- family dwellings such as Windsor Village Apartment Homes and Cooper Glen Apartment Homes and various other quadra-plexes as well as duplexes. The density of these existing multi-family dwelling range from 9 units per acre to 20 units per acre. The proposed NRMU-12 zoning district allows a maximum density of 12 dwelling units per acre. However, the applicant is proposing 7.5 dwelling units per acre, which is substantially less dense than existing multi-family dwellings in the area as well as what is allowed by the proposed zoning district. The Comprehensive Plan states that areas within an "Existing Residential/Infill Compatibility" future land use designation should be vigorously protected and preserved. The applicant's proposal promotes neighborhood preservation and will be an enhancement to the neighborhood. In order to preserve and protect the single family neighborhoods to the north (The Village, Phase 2), west (Cooper Landing) and east (The Village, Phase 1), the applicant is proposing a. 40-foot wide vegetative buffer. Additionally, the existing berm which blocks the view from the north will remain. Although land uses to the south are similar and compatible with the applicant's proposal, he is also providing a level of protection to the south by providing a 25-foot wide vegetative buffer abutting the residential subdivision. At several meetings hosted by the applicant, residents expressed concerns of not wanting to look through windows and see extremely tall buildings in their backyards. In addition to the existing berm to remain, located on the north side of the site, in order to further preserve and protect the neighborhoods to the north, west and east, the applicant is proposing a 210-foot restrictive building zone. (See Exhibit 7). Within this restrictive building zone, the applicant is proposing additional 7 restrictions which limit the height of the buildings to a maximum 36 feet and buildings will not be stacked vertically in this restrictive building zone. In the current zoning district of NR-3 and the proposed zoning district of NRMU-12, the maximum height is 40 feet. Also within this restrictive zone, the applicant is proposing that buildings are setback 12 feet from the proposed 40-foot wide vegetative buffer abutting residential subdivisions to the north, west and east. The 12 foot building setback is also required from the 25-foot vegetative buffer abutting the residential subdivision to the south. In addition to the above, one of the primary residential housing policies of the Denton Plan is to provide alternative types of housing that respond to the differing economic and individual life-styles of Denton's citizens that should be developed in all areas of the city to achieve balance and diversity. Further, the Plan encourages the development of affordable housing types for those with moderate incomes. According to the applicant, this project proposes to address the above needs identified in the Denton Plan. DEVELOPMENT The NRMU-12 zoning district could potentially introduce uses that are CODE/ZONING considered undesirable by the community, such as retail sales and ANALYSIS services, laundry facilities, bed and breakfast facilities, temporary uses and gas wells. To prevent future developers or landowners from developing the site with these uses and to assure neighbors that future owners will be obligated to the concept, the applicant is proposing that the ordinance only permit residential dwellings at this site. This will have the effect of being more restrictive than the existing zoning district of NR-3, as temporary uses, gas wells, and semi-public halls, clubs and lodges are permitted in the existing zoning district with limitations. The tables below highlight the above differences in uses permitted between the existing zoning district of NR-3; the proposed zoning district of NRMU-12, without an overlay district; and the proposed zoning district of NRMU-12, including the applicant's proposed overlay: Residential Land Uses 12 12 Existing Wo wl overlay overlay Agriculture P P P Livestock L(7) L(7) L(7) Single Family Dwellings P P P Accessory Dwelling Units SUP L(1) L(1) Attached Single Family Dwellings SUP P P 8 Dwellings Above Businesses N P P LiveMork Units N P P Duplexes N P P Community Homes For the Disabled P P P Group Homes N SUP SUP Multi-Family Dwellings N L(4) L(4) Manufactured Housing Developments N N N NRMU- Commercial Land Uses 12 12 Existing w/o w/ overlay overlay Home Occupation P P N Sale of Products Grown on Site N N N Hotels N N N Motels N N N Bed and Breakfast N L(10) N Retail Sales and Services N L(15) N Movie Theatres N N N Restaurant or Private Club N N N Drive-through Facility N N N Professional Services and Offices N L(14) N Quick Vehicle Servicing N N N Vehicle Repair N N N Auto and RV Sales N N N Laundry Facilities N P N Equestrian Facilities N N N Outdoor Recreation P SUP N Indoor Recreation N N N Major Event Entertainment N N N Commercial Parking Lots N N N 9 Administrative or Research Facilities N N N Broadcasting of Production Studio N N N Sexually Oriented Businesses N N N Temporary Uses L(38) L(38) N Industrial Land Uses 12 12 Existing w/o wl overlay overlay Printing/Publishing N N N Bakeries N N N Manufacture of Non-odoriferous Foods N N N Feed Lots N N N Food Processing N N N Light Manufacturing N N N Heavy Manufacturing N N N Wholesale Sales N N N Wholesale Nurseries N N N Distribution Center N N N Wholesale Storage and Distribution N N N Self-service Storage N N N Construction Materials Sales N N N Junk Yards and Auto Wrecking N N N Kennels N N N Veterinary Clinics N N N Sanitary Landfills, Commercial N N N Incinerators, Transfer Stations Gas Wells L(7) L(7) N • Existing 0 w10 w1overlay verlay Basic Utilities L(25) L(25) N Community Service N P N 10 Parks and Open Space P P N Churches P P N Semi-public, Halls, Clubs, and Lodges SUP SUP N Business/Trade School N N N Adult or Child Day Care SUP P N Kindergarten, Elementary School SUP SUP N Middle School N N N High School N N N Colleges N N N Hospital N N N Elderly Housing N L(13) N Medical Centers N N N Cemeteries N N N Mortuaries N N N Legend: P= Permitted N = Not permitted SUP = Specific Use Permit L(xx) = Limitations Apply L(1) = Accessory dwelling units are permitted, subject to the following additional criteria. 1. The proposal must conform with the overall maximum lot coverage and setback requirements of the underlying zone. I The maximum number of accessory dwelling units shall not exceed 1 per lot. 3. The maximum gross habitable floor area (GIVA) of the accessory residential structure shall not exceed 50% of the GIVA of the primary residence on the lot, and shall not exceed 1000 sq. ft. GIVA unless the lot meets the requirements of L(1).5. 4. One additional parking space shall be provided that conforms to the off-street parking provisions of this Chapter. 5. The maximum gross habitable floor area (GIVA) of the accessory residential structure shall not exceed 50% of the GIVA of the primary residence on the lot, where the lot size is equal to or greater than ten acres in size. An SUP is not required for such an accessory residential structure where the lot size is 11 equal to or greater than ten acres. L(4) = Multi-family is permitted only: 1. With a. Specific Use Permit; or 2. As part of a. Mixed-Use Development; or 3. As part of a. Master Plan Development, Existing; or 4. If the development received zoning approval allowing multi- family use within one year prior to the effective date of Ordinance No. 2005-224; or 5. If allowed by a. City Council approved neighborhood (small area) plan. L(7) = Limited to two (2) animals on parcels one (1) to three (3) acres in acres in size. Additional animals may be added at a rate of one per each acre over three. L(10) = All restrictions of L(8), but limited to no more than 5 guest units L(13) = Uses are limited to no more than 55,000 square feet of gross floor area per lot. L(14) = Uses are limited to no more than 10,000 square feet of gross floor area. L(15) = Uses are limited to no more than 5,000 square feet of gross floor area per lot. An SUP is required for additional square footage for Semi-Public Halls, Clubs and Lodges. L(25) = If proposed use is within 200 feet of a residential zone, approval is subject to a. Specific Use Permit. L(38) = Must meet the requirements of Section 35.12.9. The applicant is proposing more restrictive changes to the general regulations. For example, the Denton Development Code requires a. Type B buffer based on a multi-family development abutting a single family subdivision. Single family homes directly abut the site on all sides; north, south, west and east. A Type B buffer includes a ten (10) foot planted strip that includes a combination of 5 evergreen and deciduous trees and 30 shrubs per 100 linear feet. The applicant is proposing to substantially exceed the buffer requirements identified in Subchapter 35.13 by providing a 40-foot wide vegetative buffer abutting the single - family subdivisions to the north, west and east; and a 25- foot vegetative buffer to the residential subdivision to the south. Additionally, the existing berm to the north (See Exhibit 10, Site Photos), which blocks the view from the north will remain. The applicant is also proposing building setback requirements of 12 feet from both buffers. The proposed zoning district allows a maximum density of 12 units/acre; the applicant is proposing 7.5 units/acre, which is substantially less dense than what is allowed by Code and substantially less dense than what is nearby within the existing neighborhood. 12 Neighborhood density for existing multi-family developments range from 9 units/acre to 20 units/acre. The minimum side yard for non- attached buildings is 6 feet in the existing zoning district of NR-3; 10 feet in the proposed zoning district of NRMU-12; however, the applicant is proposing 30 feet in restrictive Zone 1 and 15 feet in restrictive Zone 2. The maximum building height in both the existing zoning and proposed zoning districts is 40 feet; however, the applicant is proposing 36 feet in restrictive Zone 1. The following table illustrates the above differences between the general regulations of the existing zoning district (NR-3), the proposed zoning district (NRMU-12) and applicant's overlay conditions: NR-J_ 12 12 General Regulations Wo W1 Existing overlay overlay Minimum Front Yard Setback 15 L(2) feet 10 feet 1 0 feet 6 feet Minimum Side Yard 6 feet 6 feet 10 feet Minimum Side Yard Adjacent to a Street 10 feet 10 feet 10 feet Minimum Rear Yard 10 feet 10 feet Maximum Density, dwelling units per 3 5 12 7.5 acre (See Overlay Rules) Minimum Side Yard for Non-attached 30 feet & buildings 6 feet 10 feet 1 $feeet Overlay Rules) Maximum Lot Coverage 50% 60% (See Overlay Rules) Minimum Landscaped Area 50% 40% 50% 36 feet & Maximum Building Height 40 feet 40 feet 40 feet (See Overlay Rules) 40 & 25- foot buffer on 10 feet + 15 feet + all sides 1 foot for 1 foot for +210- each each foot Minimum Side Yard when abutting a foot of foot of restrictiv single family use or district building building a zone + height height 12 foot above above setback 20 feet 20 feet from buffers (See Overlay Rules) 13 DEPARTMENT AND The Development Review Committee (DRC) has reviewed the request AGENCY REVIEW and has provided comments and general information to the applicant. Staff recommends approval of the request based on the following reasons, which are explained in greater detail in the body of this report: 1. The applicant's proposal of 7.5 dwelling units per acre is consistent with the existing density in the area and is substantially less dense than what is allowed in the proposed zoning district. 2. The considerable space in landscape buffer provides protection to the surrounding neighborhoods. 3. The applicant's proposed overlay district meets the City Council's stated desire for adjustments to zoning rules, to allow fine tuning neighborhood protection, while allowing for reasonable development. 4. The 210-foot wide Restricted Building Zone provides the neighborhoods with less density and a more compatible building configuration. It serves as a transition between the more dense area to the south and the less dense neighborhoods beyond the 40- foot landscape buffer. 5. The proposed overlay district will not introduce any uses that are inconsistent with the Comprehensive Plan designation in the area. or that are considered undesirable by the neighborhood. 6. The proposed use is consistent with the goals and policies of the Denton Plan in providing alternative housing types in all areas of the City and by encouraging the development of affordable housing types for those with moderate incomes. 7. The applicant's proposal promotes infill and reinvestment into a. neighborhood in need of revitalization. FINDINGS The criteria for approval of Zoning Amendments, per Subchapter 35.3.4.B.2 of the Denton Development Code require that: 1. The proposed zoning con forms to the Future Land Use element q f the Denton Plan. The proposed zoning district (NRMU-12) will not require a. Comprehensive Plan Amendment and is consistent with uses in the immediate area. The proposed development is consistent with the density within a '/4 mile walking density of the site. 2. The proposed rezoning facilitates the adequate provision q f transportation, water, sewers, schools, parks, other public 14 requirements and public convenience. Facilities are generally adequate. The applicant may be required to extend the waterline on Wolftrap Drive into the proposed development. 15 EXHIBIT 2 LOCATION MAP P roes .k"3~ ~m 1 q(= I ~ gg , ! ~ \ tl 3~ (1 14F 1C 1 k } t • K. _.3 k h l 4l y 1 y m. n r r , ~ 'b l1 cud 44 i x 1 Y r ~f f G ~ dti F R "'M.. too, M T_t van, JAYS { R fwd ^e,x mC: Y ~ q n'1 TAW 1 v 1, z ~E~~ ~ as t ..a ~i t „ ~ e~G: ~ ~i t c t: t.l - - r I~ " n~ ypf x .s. F r' t r -a< L 1 4 YY 4' n I 1 1 r 'n: U'. t 1! e, ;t i ~ttiT~ nr"1 k t F 1 ie .1 16 EXHIBIT 3 EXISTING ZONING MAP - = - I 1 I r Y , f - - - - T- 7 a;~, I I = I i a . - NFL-2 - i - I L y i I- N -3 Site - - -e - n _ LU 77 N M4.~,1I I i 4- i J N ( _ I L 11 - I 111 ~ r i , i _ I I s ~ i I I I~-- i z _ I 17 EXHIBIT 4 PROPOSED ZONING MAP T s H. i - _ - - , NtR .4 j I t N R.2 NR-3 T- IliF J \ ~l,n` v J- r t-J F1 ~___1. - - I - I 1 - s )EA X, A - _ 18 EXHIBIT 5 FUTURE LAND USE MAP - - I LL C _ r I I EC S~Wq ~ANOUS A N F LL a I _ co-IN Ii ri [3i, 1, t `1° - 4_ i Y I Site i ~ II I - , C~ 19 EXHIBIT 6 NOTIFICATION MAP & RESPONSE INFORMATION lj~ T lL - T r T I - 77, r L ,f l , IV _ - - 1,-L Public Notification Date: L_( 200' Legal Notices* sent via certified mail: 56 500' Certified Notices sent via regular mail: 126 - - -T' Number of responses to 200' Legal Notice: 25 • In opposition: 25(24.38%) • In Favor: 0 • Neutral: 0 1 Pine Creek dCtt_ .__3 R Z08-0016 O_ *A copy of the notification list can be picked up at City Hall West, 221 N. Elm Denton TX 76201 20 EXHIBIT 7 GRAPHIC DEPICTION E4 L C 9 I ~ ~ yyy/ _ 'y N UI m yLLy p ~ ~~4.. a (a G V -0 _2 Cr! C G 4 /'~~y m CD T O N rn a tY 00 - N Q ~ Z ~ O r d L G C LL 6 lL B L + r. .a YV N ~ : ~ N = N ate. c ~ z ry g r E- JN E,o Z s 4-1 0 G] 11 N cp 73 1 a E g ~ m t U q 10 n fn C r ~mES 4m 0-` N 21 EXHIBIT 8 PLANNING AND ZONING COMMISSION MINUTES (April 8, 2009) 1 CHAIRMAN W~►T~NS: Item No. 4 is Pcrhlic 1 descrit~eci in the C.o~prehensive Plar~r the e~clstir~g land ~ Hring 4A. R~eir~g ~f' approximately 15.3 arms ~ 2 uSe lr~fll aompatfhiiity designation std tit wkthlri ~ land from Neighborhood ReSide~t~l 3 ~ar~ing Dis~-ict bD ~ es~bfil~hed areas nor deVelopn~ent sh0u~ respond ~ 4 8 Neigllho0d Iidentlal Mixed U~ 1~, one Creek. 4 existing develc~ment with compatible land Else patterns 3 ~-U~lb. 5 and design standards. The plan also ~ecomn~nds that ~ IBS. ~f,4TT'111=Wg: Thank your I~r, CJ~aim~anr ~ exis#In~ n~ghbo+'hoods wi~hln tha Ciky be vigorously . ~ rnenlbers of the Commissianr staff. 111@ purpQSe of the ~ protected any preserved, Housing that fs tompati~le $ reaoning request is #O allow a mu#tffamily de~el4prnent. a with the a~dsting densit~r and neighborhood Ser►rip~ and q The appr~cant ~s pnapo~5mg to r~~one s from ~R ~ ~ commercial land uses ere allowed, ~ ~ IVIU~ll1 t~. ~a Altlaa~,gh the applint is prupo~sing fens ~i The 15.3-acre sib is loCdt~ed west of i~ density than what would be squired in the proposed t~ Stuart Road and approxlrnately feet northwest ol• the ~s coning district IVRM~1 12 dwelling units per acre, bisection of Windsor Street Start ltaad. ~e is The proposed eight t+a nine dwellir~ unity per acre is ~ site ~ c~rrerrtiy unde~rel ar~d is not platted. And i~ not ~siskent with the exlst#r~g density wi#hin the ~ is mosdY surnded 6y single-f~miiy, howeverr on the area. ~s north side of Wolf Trap are existing duplexes. ~n the i~ StafF looked atone-laa~-Ile radius around i~ soukh side of Woif Trapani exisking quadrapiexes. i~ sul~ect site arr~ concluded #hat tine density within ~ Also, on the west side 0f ~lyrnpia are guadraplexes or t#~dk area Is about 3.q tv four dwelling un~s per acre. 39 rnulkifami#y. On the north side of Windsnr also is a i9 That said, the applicant's prapnsed der~slty is not multfFamily development. Running alb north soda oonslstent with the exi~iar~g d~ens#ty In the ~i of the propady is an existing dr~is~age creek ar~d a zs neigf~lx~rhood, nor is it cor~sister~t witri the ~z pedestrian walkway. ~ Comprensive Plan. ~ The next few slides are photos kaken ~ As Wes mentioned the appli`Cant Is well, orlsite. Tltii~ is Olympia greet looking north at the 24 the 5i~ fS Currently zonod fyeig#~I~orhood Residen#lal 3, ~ site, This 15 the north side ~ Wotf Trap Drive looking 25 The applicant is proposing Nefghtiorhooci' Isidentlal ~4 t narkh at the site. Both a the applicant Is i Mixed ll~e i~r wlii~h is one 4f the mast Intense and use ~ l~~ing to two access paints fr~rn Wulf Trap, a well ~ ~cning dlstri~ks wlthir~ that family of coning diskriCts. s as Olytr~pia. Acrd this p was provided by the a 9ekween the exlsGirlg zoning distrfct 3 a~ t~ ~ applicant. This is Iraolcirtg south at the drainage ditc~~. ~ propod awning district aF PIRMIJ 1t, #her~e`s hlR 4,1~R ~ ~4s mentioned, the applicant is proposing ~ a~ then IVRMIJ 1~. A raduaf g progression of intensities 6 NRMU I~ with Ouerlay tanditians that include a maximum s and densities, That Said, there Is a lack of translfi0n ~ h~tiiding height of 33 feed a 40-foot wide v~e#atlve ~ between the I~R 3 Inning Distrriot, which is the mast ~ buffer abutting khe residenkial subtfivision to khe west a one of the most restri~ive~ ~ the --and t I~RMU 1~, ~ using existing vegekat. The applicant is proposing ~ which is one of the least restr~pve ~onfng district, ~o eight to nine dwelling units per acre. to rvithir~ the Nft category, ii The ma~drnurn lok oovege, The ~ppll~nt is ~a The ~IU gill not Only allow a 1~ proposing 50 pencent. A parkway width of a mlr~imum of 1~ mult~amily development with approval of d pecfic Use s~ nlr~e fee#, And the minimum side yard far es measured i~ Permit as a mixed-use deveiopmer~t or as part o€ a City ~ Itween buildings, the appli~nt is proposing 3Q fee#. i4 ~:ounc~l a Pl small area plan. Bd.rt It might also ~ This is the sppllCarr~s proms site plan ~ irrtrgd~i uses that one either not perrnikter! in the flare, whlCh~ of CourSa,1S not binding. But it shows i~ existing coning district and same which are not the ~ght units per ate, whidl are side hY side. 1~t oampaki~e with exisl7ng usesR kher~Fore, iricons'rstent kwa-hedr~oom units, Agalnf access will be from Olympia► !B with the comprehensive Plan. as weft as Wolf Trap. The applicant is propas`rng a 19 In terms of mmmercia) uses, a tai and ~ gated community. Again, he's proposing a condition t4 ?A braald~dst~ rail sales and services, professiar►ai ~i increase the bar width along the week side of the ~t services and as wae~l as laundry facillk~es arse ~ property with two rows of pine trees along the east side ~a not permitted In the e~ashng caning distrlck; however, of #iTB prap~ty, are permitted in the propel zoning di'5krict with ~ The site is looted within an existing -4 ~ limitations to square footage or something like that. or inf~ll aor~adbili#y l'ul~re land use designation. A, ~s And as it relates to the institutional land uses, Puuvtr~rd«S ~a a~ ca~~s A a, gage to~ of 22 ~ ~ hOClSd ~Y ~ is not pe~rrik6ed ire the exlstlru~ ~irrg ~ will intt+ad~,~ 4r cdn, ntially, introduce u; tv ~ distr~; however, is Ret'mi irr the posed wlth ~ ~ r~eJghDortioad than aro r~# eanslstenk wkh the ~ limi#attan~ . 3 I~he~ plan grn, ~ The general r~gullOrrS;drange ~ bf#~ dS 4 I answer ~e~d~ris at this tU1te, well, Highli~ht~d ire yellow are kho~e r~ulekior~s in 5 The applicar~ ~ alp here. ~ which the applicant i5 P~~~ an o~r#ay. As yr~ can ~ ~-IAIRMAIV V~IATKINS: ~uestior~~ Yes? ~ , ~'s pmi~~r again, ~l~ht ~ nitre dwelling units ~ ~ONlMISSI~NER CHA,4 t have -u5t a cou la per awe. 8 of ~oe~kions tb wlth, Aril #hen whey I her from ~ T ~l1l~llrrrum slde Y~~r feet Gr 15 fed. ~ ~ ~ The ma~mUrn lot ~v~'age --the app~it i~ l~ ~ the others mere. ~t no f ~ posal i5 Fiat ~~lrk ~ ~ iaeep #l~ rnaaimnrn lok coverage Irk tl~ e~ ~ni~rg ~0 trine uni#~, Do we do trot ham a ~ril~g 11 di~~l~t, which is p~'e~nt. Ag~ln, applicant ~ ii c~ssilaki0r~ that t~ eight to nfrre, do wed i~ propo$ir~~ igh# r~strictiQn of feet. i~ MS. MA~W~: Noy we der~'t. i3 Arid spee~n~ of play ~flstr;ds, the i~ ~M~ISS~~I+i~R sAAf~; Okay. ~o what we t~ are twu ~ ~ d~rKts ~5 ~bined fn 14 have e►raiiahle wot~k! be f~R~3. Acrd ~er~ t>~e next yes ~5 Subchapters S earl 7 of the Den6an ae+neleprr~er~ Cade. A is art ~ and ~e N~nresiderrtlal ~r 1~ui#ifarnlly Mixed Ede Ov~ia~r~ which 1~ MSS MA1~I~WS: N~ ~ and N~ 6. ~7 ~ u when nary ~ address the cor~err~s of owners ~,y O~i~fMISI0llir*R ~CI4AAI~E: And khan y~,~ i6 of existing adjacent re,~dentiai uses that arse r~ 1~ Honlir~rt#ial or Muldfarnily ~4bcecl Use ~~~ment ~ i~ h~5. MAT"fti~IhfS: and NItMU~ Yom. ~lgttit. earring. Arnd the appliearrt maY cant with that type of ~0 ~OhFMLSSI~IER i4A,4I~E: there's ~ wide ~i ov~iey tQ the tm~osikiot~ vF incr~sed sethadr ~1 gap lr~ there in terms o~ our d~i~n~atiorrs, I also wou~ I+equir~err~rerr~► ~ItidSCapingr ~CrF11ng, addlt9orral lilge t~ know 1roW his laie~ how this propert~r ~3 scr~nlrr~, or buffering requlre~en~, since it's nQt had ~nything d~~e ~to it for ~5 years ~ The ~he~ rla~ ~ ~ Special Purpcrme iraw it was s~a~d to b~ Nib ~ when the Ip ~verl pment ode aY D~tri~t, which involves a lar~e~ kale ~ developed when Jt rv~s appr~pved, ~6 1 ~eveloprrar±nk. And art example would be lilae tie Fry fem. ~IA~THES: Well, do you w$~ #o arm ~ 5th e~ay ~ ttrra err i~+1urHClp~l ~reriay airict ~ that7 ~ yr tfre ~nl~rn Labe riay f]istr~kt, ~ hIR, NNI~`iAl~4: i[ guest the best resport # A~ the #in're t this P~wer'~int w sank A to that qu~tian ~ that the IW~ ~ aonln~ was applied lr~ ~ over, ~1ere were ~ r~otiaes received in tlon of ~ when tl~ ~ the re9~e~t+ which ~Y underwent -wide re~anirrg. repre~rated eve pent of the tl a ~QMi~IIS~I~~ ~CHA,4~E` way thet~u~t by ~ lend area. We redelved an acklltl~nal four natJOes ~ some deFault ark then khe ex pe~Ct~tle~1 was that as $ today. Afid tiglYt when I wallaed in h~ i received ~n 8 development occ~rrad it w~a~id rrn ~ Plan~~ and 9 additions seven i~ pesi~vn a~ the request 9 honing better de~nltlv~l~ t~ 4l?Vlo~sl~, I h$Ven~k I don't loyDw Wl~t tfre land area lp h~R. ~Ul~1NGl-fAM: Well, es far ~ betker 1i is. but with kh~ 11 ttle# were received in the ofPi 1~ d~irr~9vey, ~1e dellr~l#lon ofeach ~nlr~ dirit~ is x~ today, that repu~ts about ten percent of the total already in tl7e fade. If you're saying td cider land area. i3 re~~ning ~ l re~amrr~er~ds denial of the rem ~ M~SI~~~ Or more eppropria~. ]9 based Q+T1 the following r+easo~s~ The el~n~s i5 ~feah. ~ prapol of elg#~ to uir~e units per ages as net iii MR, ~?NNIIV~HAM: I guess Pd have by defer i7 consistent with dle~eanskftlg densit~+ irr khe 8r~, rtiar i5 i~ to who was hers then, i oo~,ld see that llelr a ~6 ~ c~nslsten# with the ft~ure land use desiprratiarr of i$ rensiderakl~ pibly. i~ the Cpraher~ive l~lah. The applicarrt'~ proR~~ 19 C~Dl+~~1~5~I~NEI~ ~FfAAI~I:~ The okher q~reStlon I ~ overley does nat rr~k the irrteut of awerlay d~tHck~, ~4 lrad was You merrti~r3ed ~ tfre end that Ik ruar,ld ir~rvduce ~i a~ eutlir in Suhch~p~rs 5 and T ~f thrM ~ntpn ~i uses thak thdt were passible under NIU. there ~2 Develepr~r~ fie. is ai she al r art riay that Would prohibit ~ Thefe's a lack ~f tr~rt~itiar~ bets ~e ~ a~Y~`~3.~f dorm? ~+t e~ng ~n dick and die propesed ~ni~g ~ i~~~ h1ATTHEV ~+I+~lf that is not the ir~6ent~ ~s dom. Arrdr ilfy, ~'~p coning duct of averla~r dES~ricts per our Cede. ~Ne are nlp~ving away PL~NNIHG qN~ ~ONIFI~ COiw~ullSOp ~wPRIL 8, 2~UQ ~ 4 23 i fr+orn what 15 known as cvnditlonal z~nlr~g. ~1 dwellin ~ 3f g ~ Oai~MISSIONER CHgA I kr~~r, Lout ire ~ M~, ~'1+~~l~WS; Yes. ~ . dGn't f~v9e any tooi'S fat allow restri or1 some of ~ MR, C~lIYfWHA~1: ►4nd I think wellf fYR ~ ~ Ihe,+~ xohi~g Ca~gor#e~, right? ~ would riot ~~ow multiFaruliy dw£lll~lg. ~ I+'I~. ~IA~TMIE~YS: That aorrt. I;HAIR~1Af~ WATl~IIfYS: Dr. Lyfae~ ~ C~i41MiSSIONEI~ So thra the ~ iw~l++ll~1t5~I~?NER LYRE; I Dave a gaestion ab0u~t ~ problem ~r os. ~v oka~r, ~ but tf~e oy that ~ errbility. I't s ~ proposed wou~ n~ Rrln~ most of the Irr#~ p~~r. ~ M. I~IA~TNEW5; Afi~ut wha#~ I'm terry. ~ ~1~. htATffi~YMf$: 11Vell, the applirar~ did riot ~ ~OlwIi~ISI~NER LYRE: Enforaea~lllty of these io P+'e an oveNay which would r~e,~tr1CI the u to ip p~p~~ overlay districts, S~ if we eppr~v~d an i~ muftifamtly ply or restrict eommerGial ayes tha# rni9frt ~i oV~r~y di~rlct fat does not meet tf~ strl~ i~ he permitted, i~ defini#1on of arti ~voeriay dlstrltt ~ ~OM~+II~.SIOMC~ SCH~Lr41{E: And y~aut ate, maw i~ htS, NIAYT~I~S: tJt~huf~, 14 r~Ferer to trvo types of ou~er~ay~, t~ COMh9I~I~NER ~Y~E: ~ AosSible th~t1 ~ Imo, NIAf'THE1N~: Ilh4huh. i~ ulklmately~ If a dev~bper did not wad to adh ~ li COIHM~SIOIt~ER ~CFl,AAI{~: T1~ i~r~t one that 16 fat devel~ment tkTat averi~y, that tftere"s Sri }rou r~endoned mould you talk abouk tit over Irr? I,T argument fat it was nQt n~ Cdy applied In khe 1•# x8 FIB. h#ATTNk lure, zt"s ~ ubehe~ter S 1 pi~ae7 i9 O++~erlay f~i~trlct, And It Is Ca1led~a Mixed Use i~ fN~, ~IAT1-#~WS: 1Nell~ tftat Is possilale. lsidential Prot~e6ton erlay. Its fOr ~mmerciai The ~i uses ~ rnuiCm~r m`rx~ develaprnen~. ~i hilt. CUItiiNIN~HAM: I'il answer I thin COiuIML~S20NEi~ SCI#AA; Arpd that's ~ thak ~ the Pla~r~ing and nlr~ Cammi~ion recorrtirnends ~ Nelghf~orhuod e~ckiorr O~rlay? ?.3 appr+~val ~f 1 zoning with ~e tri~ti~s and then ft ~ f+~S. h9AT~HEVYSt Can ~ goes the City Cour~ll arrrf t~ Cite Couii alit' Q~fHMYSSiDNER ~CHf~,4~: Which is~ ?5 ac# ups it arrd does approrre ~ I believe that became 3g i hIR, CtJNNIf~G!-lAh1: ~ Miaaod Use l'ratection i a le~fslative act,l+~l~lth is then ~~le~ Sa ~ ~ fhe~re's a dlff~r~r between spirit of intent ar~d what ~ COM~fJSTONf~R S{J-1~4~4~~: Vlrf~at ~ 3 ~ I ir, once bhe City Conr~l ~c~ ~n i~ ~ HfR. CIJNNII~GFl~4M: I#'S e~lally lied a ~ it beoames a,iai law arrd iS en#~r~able. f~7ixed ilea Reslcierrtial Rnat~tlon Ov4erlay. And ft'$ in ~ M~. IwIAT~HEVV~: Arid ]t is ~ art of the 6 ~ Sectlar~ ~5.~,~,4 of the ~ento~ el~pnt Cade. 6 ordinance, ~ ~MMIS~IOIYER HAAKE: Olca~. 7 IAI~MAN WAl'I~hIS; laegal~ ~ I~MAIxi 1NATIt)CNS: Yep, Waltier? ~ f~IR, URAI~E: Yeah. I tlunl€ wf~t Mai h~ ~ C~dh1I~SIOI+IER SON; Thank Y~~ 9 said is esse+'~iiali true. Tip ~ ~ Y ' goncl deal of f~ Mr, Chairman. t rrt~ce the carnpar~a#ive shark was ~ iQ discre~~ as~aciated wPth ~ legislative Sok; hoWeverf ii fVl~ 3~ which iS exisbr~g a~n1ng. was iE 11 also you knew, there are alp ~P discussed to po~ibly malc,e it N~ i~ attaeklrt~ ie~~latirr~e act, I~or~lly, you hire k~, i~ MS, I~IATTiiE1N~; Flo. 13 number I, be a person withstanding to assert t~ issue. Ie {~OMI~I~~OI~fER L.ETDN; t11 would Ar~d nurnl~r ~ ,you have to essent>ally shurv #hat the . i~ be the n ~ NRhfIJ 1~, ? In~g i~ that there was an Sbase of discretion ~ssodated with ~ hl~. M,4Tl<'iif~VYS: VMfell, ##t#t rrellr I i~ the coning that you're putting In#~ plate. Tha# It was it believe that I dart~k h~v~ a fade lr# f~or~t ~ rr~e. Bak t~ arhltr~ry► capr'icinus. That th's really rio ~8 I Relieve that the appllcar~t is seeldnq approximately jn fir +k. And that`s not a~+reys a realty i9 eight to rime dwelling units per acre. easy burden to meet, ~ ~ai''fI~ISONE~ EA►GLETOI~: fight. ~0 Tt1at doesnr# mearw that ik wauldrl't l~ ~1 M5, ~+1~4TTHEW~: And the NRb, 2 believe, is ~i asrked so~nl~ody who wanted to Ik a why ~lx dwellln~ ur~it~ per acre, 22 rrklglrt have an ~nlperest ill assertir lt. f3ut t>7ase . COh~NllI~~2I~~lER LI~1`41Y: #tight. Okay. avenues of l~ are certainly available. MR. J~VIVIi+IGI-lAf~fi: Can I ~Pr a follow-op ~ I'm rrn# really sure that In the gnat ~ question, Pile? Is tlvs ~onsi~ered a mul#Ifamlly ~ a p~hlk ~neetlr~j #hat I'd wank #4 q0 into a iai` more PtRI~IVI~IG I~I~U ~~NCI+lG ~I1~IV APRIL 8, Ogg P$~~ ~0 ~ ~ 24 ~ detail than that. yam, knows jug sufl`ioe It to spy ~ ab~#ely Clear in u~r ~~n that we have no intent ~ that the er~urts a o d~er~. ~ rind we seek n~ ~sre other khan rldential. AbsoluteFy ~ far ~5 the avnc~pt of oYerlaYl It is ~ ~ nom. 4 true that whin the G~~xt n'f air bode, our• Code d ~ INl1at we would really life dq is take ~ allo+rr for two dllrent types oviay in ~rrnS ~ 5 iVR ~ and add a w s. A little more d~rksi!t~r. I ~ pravidinc~ g~ridance, There has Keen is~ a few s ~ have reasons For that. Arid I'li go inbo tom. ~ sortlmes wren ~e qky has applied an o~rerla~r that w$s ~ ~Ick right dovm here. There You go. ~ not one ~f those two part of its ~er~eral authority ~ Thank o~, Y 9 pride appropr ~oniru~ to allet. It's ore those ~ Arid I wlll Syr J~r~, that we aye not #h atlo~s where it would be pr~erable to have ~ so leaking to expar the uses, we r~ Ong yes ix apply an overlay ~a~i~~catlor~ k'S spedfiraliy #i the uses. ~+p you dnn't h~ to worry about L'trat. 0ica . ~Z defined bar tle. ~ I guess I ~o~k Use the mo~rse~ f~ Iiuw~ev~r, in S~eakirrg wlth ial oonsultar~ Imo, I+'~#TrHEW: The mouse. ~ in the pad qr~ this, u iCnpw, I've been ~pld grit the i~ B~ARIA; Let's see. 15 Idea Is very drt~ble to impose an over#ay provided iw1R. D~AI~IE: The ~rsor, that the overiay conditions are mpr'e restrictive n #d Fll~, ~41A: ~r the c~rsar. T>~re we ga. #7 the underlyiry~ zoning, 17 Tha# will word. In ether words, you -4 if you irnpOSe ~ #8 . ~e want to rezone 15 aer~s, Aid, ~ i~ inning restrl~or~ to ~ e p~e~ay ~ restrk~ bads t~ cause, the ql ~ gill ~ improve the ~0 the sues #hat ar,e of oorrn to Y~► Y ~nry~ use ~h nei~hborhoaf? And the ~Ighk ire goin #o as the overtay prods to ern g ~ pourer or to create }1 t#~t ~1 shoui~ w@ f~ worried? I mean, thak~ ~iy n~.r~i. would not ~herwil be dilowed in the base coning l~ou krxow, I rerr~mber hearing a start' once, ~ clas~5ificatiion beu5e doing ~ would ntlally be ~3 And the pundl iine of khe ~ was so f mY~ yap can`t z4 usurping bhe legrsla~hve function. get there m here. F~naliy, yam, know, dust ~r the purposes aF I:d j~rst Bice hp go ov,~ way I 3~ x this Connrnissban and giving u a little bit oi' solace, I # understand the purpose of planning rules. Th eY pravi~de ~ just want b0 remind you that this is mend#y ~ ~ I~r~downers with stable fr~mewnrk ~ ales so that they 3 n~rnme~iati4rr at ttriis point in time Ynu know, q~e're ~ can develop or sefi tfiel~ ply, ~ nan~c#fr1~ a public hearirr9, listening to the 4 1Vaw, It provides #h~e who are In the 5 nelghbortd, lr#n~ what they ham ~ say, ~4nd bred 5 vf~nity a hearlrtig, which is what were doing row, for ~ uparr the input of the pk,blie and ~e representations s their oan~aems. ~ rnade hY Ifie applicant and the sff~ t~ the ~Eer~rilr~g 7 1<t re~ulres ttesi~n corrside~atr~, a~ it 8 and ~onir~g ~ommsior~ is beln~ asked to male a S g a certai~y of a durable agreement. Overlay"s 9 reaommen tQ the C~unciL end the ~ rules proviide~d a durable r~eighbvlfraod prdtior~ sa the i~ ~auncil wlll rnal~e t Anal de~rminatlo~ as part of rules #r'dr~5~nd awr~ership. The property is Conveyed. 1i #heir le~islati,re prer~o~gative under ~e law afl:er havlrx~ It still runs wlth the land, xz another public hearing. Frtanaal stahlllty for the owner. that's i9 CI•iAl:ik~i 1NATl~I~S; lt}id lFa+ say ~e #3 im or~in#. Be~us~ if he has artners p p ~ kheY went to #4 petitioner way here? how exactly what they' i ~ be able t~ du and ~ M~, MATTN~V: 1r'eS. what ti~eir lirnik"atlorl5 an~ so th et' go In knowing. ~ ~fAI~i~1AN 4lIA~'I~l vd e~renir~. I+fame arrd i6 flaw ur~fart~r Y, we nave to use the 1~ address, piea5e. tiaols that are a# hand, And I wa~kl 'ust s J ~J9est that ~4~fA: My narr~ is dick Ba~1a, I'm tit rue maim another tool before vie throw this one away, And iu applicant. I live et 5138 Edward ltl. I'm reterning the overly. ~4nd I world lily to sf~ow m~+ presentatlan as I've asl~ed ~baut NR 9 f~ a ~up~ ~ ~ . ~i a PbwerFoin#. I d~r~'t know hew tIi end this ors. ~f now. And three years agn the e~~ Tree nmiktae u1d I ~t $ little 1~e}p on fit? W1~Ife we're waiting asltl far duskenn9 by right in NR 3 end 1~R Arid I ~ fnr our technics! heip, i would like ho merktlon that I`m fast wonder when we're wing bo get that. 2~i not a perfiet~t i~d[vfd~raf. And I do forgot things, ,qnd 24 Nor, let"5 talk about protecting adjacent the rain thrng that I f~rgvt to d0 v~raS to make ~5 uses, And t im portan# to rrre. And lek >rne say to Pla4f1~IMAHD NIhIG CQluffrliQl~I A~~It S, ~~s ~ ~ Pam 33 3~ ~f T 25 ~ the ~el9hbors arrd there are Gler~ty that are here i the most lilly the cne that we rwrnuld use. Tide 're ~ might iF somehow or arroki~er you wenen'I: Co~ta~edf ~ low ~rowirlg. The 're derrse~ ~ ~ Y et' don't have ~ sirrgie ~ I'm sorry. I ud llsk that I was vided. I ~ trunf~. They grow i~w bD the ground, s~ th make a ~ tl~lnl~ ev wras pr~~►+ided with ~ mall-out or ~ great semen. ~ hand-delivered. If we rn# Y~u~ i ~~oiogi~e, I wlsh 5 i~OuY, I'd life bo set' that khe wet' the ~ Y'd hive come tO one of the two stings that we had ~ nefghbertlood has n de~inedi I just Can't s the ~ fn the neigl~rhood~ You'll see Ism not such e~ ~ ~ustifi~tlor~ for a one~rn#le diameter' ~i~'~`le. Tha#'~ $ unable guar. ~ bigger than some sf'nall tawnst I thlrilC, llle rielghtaor#~od ~ Now, let me dust gu over wt~ak we're gp~ng ~ .here, actually I have it hlgl~lighted hie, This is ~ ~ Cell the prQteotion overlay. And this is tales right what I ~efieve drat the r~igl~t~arh is. +4rx! I'll tell 1~ out of the ode and right from your report. Arrd I've t~ you why. If you're going to get to the other holrses i~ hiQhligh~d a few things In red. tha# are within ~4Q feet► You've got to cros,~ the creels ~e carp use an overlay ~ address tabs or walk feet. ~ aanrns of the owners of e~ds~i~g ar~aC~nt residential ~ IVowr if You 9o to west onto the Sul-de-c uses th~# are lp'ed hfonresidential or Mu~il~mily ~ ~ at ~alh~aa, the ope~fr~g of the Sul-de-c is 3,508 fit l~lxed Ilse l~ou#d fmpo~ ~rpon them. awey by fact orr I guess, it you drove. iYuw, they i~ Now, if I'm asldrrg fOn ~ Mhced rise Zor+ingr ~7 ~rtalnl are in Y proxir~lky, Aa~d we need to do ~ Y would say that n ff I don't havwe husl~tes there, i~ everytfiing we ~n to lest oar impact, AI~C! ware i9 I fall under than ~r'1r, ~o I'rn endded to do ~g [+eotair~ly willl~'Ig to do drat. ~o that. And tf~e reason that I want to do #i~at is Chet I ~0 Now, this 15 bores has a central l~tiorr. wad ~ give the neighi~a~s assurance, I C~It! imps and ~illhy has it Ian pawed up? 1Nell, imagifle khat you're a~ increase setback ~n rnysel#. I pan do additional i~~►~s~r. You're 9o~ng to look ak positlvoes~ Yau'r9e ~s landscaping or s[reenfng or bu~`er requlrerner~ts~ v~rhich I golr~g loafs ail negatives: UYe'~re got an elernen~ x4 ham d~rle, I ran a impose a r~~rickior~ of uses, school. a wl~l~. I've of two el ~ 9 entary Schools. whic~r~ t a now. And I ~poingize that I didrr'k I've a junior high hooir a nice library cl ~ Y~ i t ~ in writing. i was gulfs a hit ~onca+'rled about ~ a perk, ~ tha design problems. ~ Wi~at a the suer itselF`~ Gas ~vhi~, ~ It aft says that d~rs would amend ~e a That loo r~afly nom. You carp a the creeEs. You got ~ undying toning dash#Jcation. So until we get a nl try, ~anp, my trees, Nice urr~r~rusl~. I've a something better, I'rn fining to ask Mark ba just Idnd of ~ even a green briar thicket. I~abQdy's 0~ng to walk ~ let us sliclee by, again, en this. All rights ~ thigh that. Ar~I I've got a little reef of e~c~vated ~ Toning restrictions that we ere asking fir ~ rk on ~rhich eistfrrg trams ar,e growing~ 1Ne don't plan ~ reslder~tial orriy. Dower dens~y e~ghk ~ trios un ~ bD rfrmove thet. That's on the north side, 5o the narkh ~ to an acre. R~ek~ of the iar Perimeter mss, 9 side has a ~n1er t#cak s raCtirall irn ' P Y penetrable. I ~0 I'rrr a guy wt~ loves #re And there's absol4rbePy no to mean, if you walk through It' you're going to get muddy, 11 r~asan f~ us to eliminate those trams. And all tF~ak i<i o t People won't. And then it's very guiett A ~rrrderhr~rsh tit corrals the construction, A height freeway would he just about as good, but it's noisy, a i~ firnit of 3~ Feet, which is less than NR 3. I've g a Break barrier`, And ~et1 I"v~ got a racfc wail #~edc, I've even g as rnucl~ g sly i~ with trees. There's a pi#un* of it here. is NIA And wider ~ far the trees. yor, know, ~entan ss I{ow apt the views is the silt hfe~ requires only a Few k. I'n~ a gup who Iohres trees, i~ ~ the e~proas~ area deCllrring? Is Pt Imvir~ Now' 17 And I want ttie pimple who Ilve them #o be happy. I this is 1Nimbletan Village. This ~s an apet Complex ~ want terse ~ to grow, I want them to be able to ~a thet's Close. It has professional rnanagernent. It`s got v~ralk d and be ire the shade. 1~ I'm n'g ko say ant ~nds~ing. It looks pretty There's an aenal. We're calling ft Pine Bead here. It's got a rtiice gaol. Flan a central office, ~reeic, Vlrlrer~e ire the pines? III, we're golrlg to have But tl other prapertr they aren't so ~ to plant them. ~ of the ir~gs around here have ~e attraive, These are some nF the Fourp~lex. And you ~ name DaIC this or yak tha#. That' don't have many oak Can see tk~ere were guys srkkrrrg in lawn chairs there out knees. o vwe'~I have tO Plant our pines it low like. In ~e sun. 1Nhen I drove up, they decided they didn'I This is wharf black pines i ll. That wou~ probably ~ grant tnelr picture tale. But tire's rio nv hear PL.raNlVlr AIdD ~wir1G ~1 A~ aaoa ~ Rafe ~7 ~0 40 4f T~ 26 s theme at all. Separate awner5#~ip. No unified i They're thr-wry and then a litkle~ i'na~. ~ rr~ar~~~emer~t. N~ Jamaping. ~ As y~ can see, our I~rildi~gs that we`re ~ IJ` yoU'li notice tfle eaw~ of these 3 thlnidng rf usi~ a~ rl'lu~ ~rnalle~. They will not ~ ~ buildings, they're land of warms. That's ~~r 4 se~l1 from tl~e nei~h~rs. The trees ti4at we're going ba s have skructura~ p~~ems. i believe Jt's from water ~ leave, they are iier than the ~uildir~gs. ~ darr~c~e. There's some mare evideno~ of war darge. $ And 7`rn not really a grit ~rchJteck~ but ~ Wader ~~ge I ~Il say thole dust to tf~e south of ~ ibis is what we thought vuQUld work. And khls is ~ ~ that one of'tJ~ miners was fixing up #~Is unit. And ~ fiat pl~r~. Andy actuali 1 onl rnY Y~ Y wanes ko have one ~ I think that~s gr, But you see the View's r~ ~ en~r~e bec~klse I thought it wild bekter, The one sQ attrar#i~e; ~ wae'd a fair amount of w~nrk. to entrance #~e erask is more ave, Ti'iis is the y~r home is your sirfgle is one that we'~ using now. s~ investn~t. So I have to a, what ~ this site sx ~4nd ITm j~ going to a, What else oa~,ld ~ elkaw? Mow, I've been told that #hree ur~i#s together is s~ u~pe Dave done th ~t fn with tl~e r~lghborltood~ You know, f ~ a tYRe murnJly. I a of tins multifamily i4 we were told that there's no krensitional aqr, This f~as used as a ~a~bd ~r runs. is site is the tr~r~sitional ~vne Pram ig unil~ th an a ~,a Aoyway, let me tali about density. Una se ~i- I~ ~ khe west r#~wn to sight oi` rune and #t the ~7 per acre. Does it deterrnfne iiveahility~ then you laolc 1~ ~ighborhood. A~ I have barriers all ~roun~ it. . ~e ek th#~ aerlaJ~ wire°s the gin? Nell, the grr~ is sa ~Yy, ~ skill gat a few min~rtes left, but s~ in the arm wide the mast densltjr. ms's take a look at s~ I'll give them to you. anlr you. thJs. Now, 'this will surprise you. But the a~ual IrHAIRMAN IN~4N~; AnY boa ~s den~ty is not six unity ~ act. TF~ faurple~c x~ COMMI~~1~N ~E: I'd lime what is x~ are 1~ 1/4 unit per aa~e. Aid there's ~T percer~t g ~u~tering rights mover. The resk Is ~o~ or bui~dl~tg. ~ N1it. BATA: What that means that I v~muld ~ It's eig~t*ar~d~e-1'la~F ur~it~ ~ # nom. lib the Gulldi to gekher, If I want to save tr~s~ ~ Thaw are the duplexc~es. And the rrs~st den~tY,s X91/4, x5 1'~I- Instar~ceF ar a natural fieahurer I wild rria~ the ~ i And that is also in~rrect be[aixse we`re told tha# i't's i build#rrgg attached. I v+rculd Cluster them together. ~4nd ~ 1~. this is the actual €~ensity. Sim has never x then I could save a landscape fe~tur~ if Ghak was the a meted his, Arid I gave Jt ~ m months a Lase if I dust ~+arr~d out a bigger driveway or ~ and I measr~red it myseiF. You can 4- y ~n re1Y ~ whatever. That"s what ik meats. Its alp, ins that I 5 ik. ~ can ~u5k put them elm, There`s moue tin one ~ Bo what frts~ UV~II, witl~ln ~ feet of ~ meaning. that's the one I want f4 tee, ~ wall~rrg fist-once Only one dwelling Is ownerpi ~ Mlt. ~NIyIN~H~4M: Anther ~rrn of s ~illithirr a OO~t40t radius of the n~ghbaods, there's a clustering, also and why the appl#cant says, ~ ~u~k t,€nder 1~ percent; h~uvever~ on the other ode, most ~ ac'tuallyr is true. Also another form Of clustering sa Cf those (~uple do own their Mmes 6p B5 ~ 90 percent, would 6e if you i~d a ~ of Prol~ertY. it's say #his ix depending on which ne~ghborhoodM ix parti❑ular piece of pr#y w~ you flauld say by s~ So whale ere the SSibili~es? C.an Y pule s~ right had l~D lots. You could parli~~rly~ ~ separate sirx~le,farri€Jy ~~kureS? The ruts are ~~0 ~ ss a~ul~, Syr daster 10~ Jam, say, wily on 50 ~rcent, ~4 to ~ a month, liow am I doing ~ pay for tt~m? i4 you w~.rld~ natureflyf lave to make the smaller, 15 C~nmrr~n wall bui~lings. Flaybe I can gale the prig darn 15 So, in ether words+ you would get your same der~si~y, but t~ ~ I burl oornman walls, Now large s~lro~ld they be? How se you would use i'ess of ~e land ~r as Far as Taping s~ many units #n eat building? Hnw tai! Carr tP~ey be? t7 on spi'aling. xa Thew are the things that I asked mylf. ~ M+IR. 6r4RIA: Thank ynu. 1Ne've clustered s~ the building angement. I've 9~ to have s~ four and floe buildings together acrd made them smaller. ~ ~ for trees, At least I think we rlo. Space ~ ~ e thous tJ~t would hef p, ~s soclali~e. ~partiQn arrd erring. I've got to 3~ J~I~.. ~i1MNINCNAM: And doing main the exis#ing tree fn`r~s, it seems that I should. x~ M~. ~AFtIA: we Id this land. ~ And r~thin the perimeter trees, I need guest paridrig{ MR. ~UNP~IIN~I•IAI+~: A~1d doing ~ by right ~ 3 need ~ managnt olTi, That parrs I got to have ~ would mean that ynu w~u~d~t't Weer! a~pr~val from the Z srr~aller.lwildirrgs. Tt~se huiidirx, are #oo large, as or Irrom th~ Ciky Caundl. ~a~rr~i~+G ~ ~ ~~i~ ~ Page t~ 44 of T 27 t ~I~,4IRMAiy WAS; Yom? 1 front because I ward spate for #~es~ That means t#rat ~ COJ~MIS~I~NFJt ~CM,4AJ~~; Y men#id in ~ t Skt # rvJIJ grovr uA k~ fuJJ sJz~. 3 ~Y yot, are pnpp~~~~ tl~t rr~uld resti~lct the ~ ODMMI~~~~N~R ~CFiA~ICE: ~4nd the height ~ uses From tip lVR i~. 4 res~it#Jon and the rritivrt ~f large ~ MIS. I~4RIA: Ma'am, ~ J41R. BAI~iA: Yes. Yes. I we da rent have ~ ~f~Nl1'~SION~II SCJ~1~11. Yes, ~ r~ th take out the trams on t#re perimeter of ~ RJR. AAA: Ts rJgh#, ~ that is abs~lly le# me go ba~c to lhat. You c~rr ~ [~MT5SI~1V~li ~FIAAKE: Air ~u kn[~w~ ~ 8 see diet die perler~ we w~rrk tip leap as much ~ 9 the height of tip bulldi~lgs, ~lfhen I drove by thy, ~ g we cans native, It's thick underbr~,sh. It gives the ~ Y Lived #hat iirere are epartmerits ~ the anirr~~ ~ little space ref they probably rrtc~k of ~i And k aro they - do you hie an appraxlma~ helglrt it them move away, Batt it dam give them a Ilttle bufFer, that tl~y ar>;? i~ And it scrmens Jk i~ MR, BAJ~fA: T bulklings one about thaC ~3 ~o fiat's why we want t4 do thak. And it ~ helgl Th~► map he sligi~ly thlJer, Because as~ tha 14 doesn't us anything, If I tore the is dawn ar~d s~ ~ of bullding g b199~" wll~ the same pitch of 1~ had th plant ~thinp. then it would #~wt the n~~hbors 1~ the roof, the pyramid on rip g taller. d mould cast ~ monelr, too. ~ doesn`t make sent. 17 ~MMISSr~NE~ ~AAI{~; Yes. They seem ~Oi~MIS~IQNER S~HAAI~~: Thank ynu. ~ taller than w~ra# you were l~ropasing. 18 CIIM~IS~r~~E~ ~1'i~: I ~ You what 19 rl~~ ~,AR.IJ4: 1~~5. ~+Q Mlha't t~lt'..~ d0 t~ 1~IS yGElf ~J~Ing YDU s~Jd ]~t]I.t~ Irrttraiiyr ~0 with this Overlay is.it Ik waald he v~y diftlt fnr ~0 thought about using it far owner-p;~ thwn}~o~es~ somearre ~ design arryd+ing else der than I have ~s end tin you chose deeded that rental property would because I harm: space be~ea~ the building. I i~ve a he a clrolae. 4Uhat was your #Ippln$ point's ~3 certain arrtount of spate that I've said we have to have M~. ~A~IA~ Okay. Let rrre okay, I think ~4 fat°~ been. And 1've also iiml~Ci tie hei~hE of the this cursor shows ~ here rl ht franc. ~Ip . 9 Y Thts as buildang. 1'~ klrrd of pu# m Irt a skrriltket. But ~ the fh~t plan that we came up wig. It's abouk ~ ~5 t that's J:irre. That's why we want to do, i sarrre number of units wl#hln orre, Eu~ we only have one ~ C~MMISSION~R ~CI~AAKE: 1M1fould you rye die ~ en try hem and we have art exit h~'e, Nowf I lutow that ~ items of ~r Overlay dllstr ayainf please? s Mme cnnt~r~n iras about bhe trarffc. Bra #f~ Is 4 MR. L4: Okay. 17r~ we want on ~ srnail e~ot~l~ end few Trough units tit we didn't have to ~ COMMIS~IOp1EJ~ ~.~IAAIf~; I~aSi~rttlal 5. ~ ifiile a TIC -r a ~~c skudy, ~ MIS. BApJA: r~IdentiaJ uses. 5 And the engineer were wor7dering and they ~ Q0~lI~lISSTONER ~HAA~: Oi~y. ~ ~k Iliac that we should have twn erttrarrs so that we'd ~ J'~R. BARIA: 1Nhen we first laps at tf~is, ~ g~ r~ore c ffi t wit. Now, the rrw ~ very ~ we leaded that it would ba a gpvd opporttm~y for ~ ve to the w And when I took irrvestars by, ih atkached townhames. d that's wiry I drew thiiS at they said, 9uYr 1 n't think we r7 sell frous~es het, ~i tight, Then when we looked et the unsightly vest side Tl~ak's it In a nutshell. how, I sill think wtr can make s~ and, a~~o, the neq~,iremerrt thaE die ~tjr sold they would i~ a nice Itialang pub, It can ~#llf be gaRted. INe tdrk ~ irrMpose oo us that i had to use an entrance theme, we 13 stall have all the other #f~lrtigs that we rrar~. but It i~ he9arr to khir7ic~maybe these~tmlts wip have to be tested. s~ would probahlp 6e rer~t~. 1~ ~a wF~tlrer they're rend or nod, we ~Il want ik to i5 ldo~ur I understand that that's a stJgrna with look the saute. some folks_ Let's fay it. s be honest i#. auk if Y stack a urrkk on topf it helps me s~ cut the prlem that we see in apartments ak least in with mfr ~ with the bt~i~llr~g Muse I ~n put a ga~9e, 18 this naighborh~d for sure and other ~n~s that I`ve sari 1g aril then I car, put somebtxly eJ5ef5 tmlt old thp ~ that i~ iS lack of goad management When you d~'t have game. So I ter malae ~ mom compact. That's wiry I ~ oentrali tron#rol in the manag~meni~, y have wat~etf tp get nine. And I have more tiosk if we d4 rk ~3 Arable, Acrd t} s of tlpp~d us the other thtat way. There's fire codes that I hatre th mgt and 2~ war. ~ oar thing5, ~3 NpW, aF yhu war># to Impose artod~ar on ~h, ~ iya~ven't firtlshed. t gum I should it, i g~1,g we"Il take our beatJng and we'll ego, . 75 err. Then ms's d~ nice het kha# I want lrr ttte ~ right now we Ihlnk that they may have ba be rented. One F .~HJNO AND ~DNI ~JSSI~I~ ARIL a, z~as ~Be 45 ~ 28 1 of the gu~+s said we rrxlght rest them 1"or a wf~ile ar~d then 1 And agreeln"g with fir. Schaakef it just ~ we wo~rid pro~~ly jug sell them later, If we if wre ~ doq't m ~ilre ~ l9t that sfngfe`fem~iy hnrr 3 design them to where they're vertilr we'll Dave 3 would work here. certainly not at that tl~ensity of N~ ~ ~ build therm that way, Because hF we harre ik if we ~ $s It ~~nkl~ sir. 5 Selt It b]F wed, it has bo be ~ the ~p4r ~ the roof 5 e #~lloed about dolr~g an h1R ~ and ~cfnd ~ 6 all Irr o~ pied ar~d a lot. We can do that. And that's 6 did some l ~ #t~,. Again, just eouldr~'t see that ~ this par~e~l~r concept. 7 that I'eally irr~pro1 the value of the ro R Pe~Y From ~ ~ T~ orfe the or~o has an entry Mere ~ dEVelnpment sk~ndpolr~. Arid like the ~ and an entry here. Rr~d I dfd ~t carne of try in ~ of~faortunlty, i~IgheS# a~ 6est use thr th~ ~Re~Y. thus time. 13ut it's pr~ty much the same sign, Same i~ given fts Ioca~nr~ and t obstacles rve had there, was I!i hu~ldings. ti khls fVl~ NW"+iu i~ wfth #bis or+erEay that reskri~ts It 1~ ~iAIRMA~I 1NATI4IiV5: Anymore questions? yes? 1~ to nine uniks per acre. i3 ChfFI+li~t SAID: lust nne, the i~ r've spoticen, as Rfek has! t~ many lo~tal i~ stab agree with the exiting densities # mre~n, ~ l~ developers and buikiers~ ~ well as some folks from out i~ showy fn reality ik's quite dose. AS I weprt by and ~S o~#own. And, besiraliq~ there ~ an irfiher~t, There ~t« looked at it, I thought this was a nice prnperky that 16 is ~ riernand even in these tl For khis type ~ prodr€c~ wau#d be dit~icuht to deiop .Into single-f~mfly, d I i? rrerses, yQU know, tine oust that would ~ i~rvolved In 1~ was turlo as to how it ever ~~ly did gat ~ be NR ~8 developir~~ thisfor asingle-f~rniiy use would fast i~ but the density around there is qua ~ qua high, tao high -put the kit oo~t too high and ~ prises too ze N1S. t~A7TNVS: Yes. Tl~ applicant ~ hi h ire ard~ tv I~ this g project ~ fea~ihfe one. ~t earect. ~t we c#id look at ~ k~rg~ area In ~i ►4red meeting with thre Mirk end some of the 3~ c#etermiNng the 3,~ ~ 4 ur'~its per acre. But to ti7e other pl~nrters, I thlilk same of their n~ern fs that sauthf per, they ~ppficant Is cornett, ~3 maybe even doing this doesr~~k make this property hlMI55tQHE~ SCI~I►4Al~E: 'Fh~r~k you, 2~ madce#able. And. I Ate, #hat's ~ fie drmlr~ed~ ~iAI~MA~I ~IIATi~NS: we'll nnvve nn the with 25 l ~ khe taflc~ that we nave rnet With ~qd talked ~2 i the pUhlie hearing. Th~rilt you very much. 1 with, feel life it would be ~ markEtable cerC~fnly ~ i~+ll~. B"ARIA: okay. Thar~lc you, ~ gives it a rrauch~ liter oppar~nity tb be developed under ~ ~fAIRMA~I WAi"Kl~~: I #~a fit, dad 3 this ~rrent+ you Irnow, Proposed layou# fan t ~ Andrus wishes ~ speak for. I'll open the ~uhlic ~ single-family use, I appreci your time ~r~iq#~t, ~ hearfr~, S ~-IAII~M~4N WATIQI~~: Ti~artk yam. Is there ~ f'+#f~. Ai►1Df~US: food ifig, i~ar~an my 5 are else tf~at wishes to $ k fir thfs 7 r peCitien. ~ dne, i dr`dnft get ~ cftance to go ~rrwe arrd chafe. 7 EI15~ oorne fOr~v$rd. Ste#e y~r name end address. ~ ~r~d Andrus at 310 dove ir# Shady Shores, I'm with >g M~, WTtliAlyS: Fnl~ No. Y want to speak ~ a with ~t~ I r~epreserrt t~4e owner in their pfrrsult ~ a~insk. ~0 ~ get this property r~ned, 30 ❑-1~4IRMAl~I UfATi(IfYS: the 't want bo? 1i And Z mimed the very f~m# par# off Ricky MR. pIIAI~E: She doesnr# wart to spk for. preserrtatian. Ire probably mentioned that this owner l~ou asked ~ you w~r~f; to speak fOr, She do~nft wan# ~ i~ his awned the properly fvr Hearty ~0 years. And Is speak for. ~ Seeking at this a ak least to h o~re,~,lty to (~-IAI~hfAN w~aTxlrlS: okay. Dkay. Welf, r"Il 15 $nd i~exif~iEity to make this a ilf'f more rnarl~tafile 15 start with the IVOtke of public +i<earfngs that I have ~6 this pr'operky, ►hrl~ich 's his p~rpase in seeldrx~ khls that are opposed. 1Nekion f:hu~h, ~Rabe#ft ~hurcl~. re~orMir~g, 17 Mfg. DRAI{E: i db~'t khin~ these people s$ Itfck ar~d have sped a considerable amount wand he here. ~°rn Hat sure they would be hem. 1~ of time. l~le sl~rted worl~lrrg Frith this ~rtJcular owner ~l~ ~tlNixlIIHAM: I ifiink these are just the lack ye#r aba,t this dme. ICr~d of reseer~chi~g what opposlt~r~ th~Y sent iin. ~f w~auld be t~ d~Etig dif~nent site plan, and CHAii~,MAI~ 1NATiQNS; Qi►r okays Is there meeting with the City, and doing several neig}~borhoad anyone here that wishes #o speak against the petition? ~ mtlr~Sr a5 well. Arrd, ulbrnately, it just carne dim 23 Pl~l~~ ~iYle 1Ff~f W$f'~, ~ yr ~a~11' dltid addf~SS. to -T with what"s -kind of what oltat we have ~n ~4 h9S. WIi~IAM: F9y name is Jenny Williams. 3~ t#re nth and west of #his propaH,y. I Ili at 1 Aspen Dive. I a~tuallyr I eve a f"t.At~HIIV~ Aldo ~C C414NIlSSI~H APRiL ~ ~f 29 ~ 1 letter well, i~'~ ach,alty note. ~t we l'irre t it. But I havoc a hard time buying tFra~. ~ 50~ fit, thererae, woe don't count. ~ CHAIR~iAid 1NATKIN~: Y~ havoc exhaust~l trout ~ ~Y rrel~l~~r at ~~B Aspen ~t~rroe. Ark what S time. ~ their harm to say is these Is already apar~errts l'n the ~ . wIl_LZANlS: may, Tlrarrk ypu, area #t have be~rrte eyesore acrd dlla~drat>ed. I am ~ CIiAII~MAI+! 1NATI~IIV~; Tharrl~ you fir G0~1ing. ~ very cormed #hat tl~e rrery .cOncerrred that the value 4 Is there anyone elm #hat wishes to s eak P ag~irtst this ~ ~f my home will de~r~ase with ~e building~ of theme ~ pekltlon7 ~e ~am~ forward. Name ar~d oddness, ~ unity. And that way from Nfelanie ar~d Raobert Hall. ~h~ 8 fie. 9 It's not ~~t~. It's 5~9 Asper Drive, Dente, Ts, ~ M5. ~H~iN: Morxi~ ~haSSin, T five at iD They ar+e whin SOD fleet. fd 51~ ariv~ the north side of the prrLy. . ~i And I ~ rather finny I live r~v#thirt 11 I have a long list Ole thinngs tv talk abO~lt~ 540 Feet. ~k as th~r did t~1e Overlay and they redrew 1~ Ar~1 when Mr. 6ar~ g Up pyre and started tall~rr9~ I 13 w~'r~re~ the}+ th~ugbt the neigfrborfr was. My ltiate ~ in i~ realised bhp sa many things flick ~e preserved ~ our that sgllborhead. I was riot rnalde aware 0~ the 1~ mrrtir~Unlty meeting #rave clraoyed samewho~ sire he t#tie r~ r~ighl~rQd nreetin~s. And only bemuse I frail rancher original presentation. t~ nel~hbOr come knocking on n7y da~r am i here ~niglyt~ This development is oorrtlnr,alfp looked at i~ I dust FOUnd that very err~ertrsining. I under~ar~d ~s brar'dered by m~rltifamily. It true is riot. only orr iS there's In slgrrs posted, I'm a 5tay,at-Irame rnom, I'rM1 ilk the south side is it bordered by rnulti~arnily. If y~r,'!l a shut in. Sa bd think that I would see d~ ~igrrs acrd at the west side and # north sue. those ere fat be ny only way td ~ ~ a bit SCa~rr sfn~l~-family his. We`re across the k. T#~~ k I have the sari ~orrc~rr~ abet the gerLY is not that biQ acrd i~ dry three-quarters pf the yam. va#rr~ my.home 9~ng down. T tra(~ !5 a huge It's not Imper~trrable. when yQU kalked about the . ~ rroerrx to me. Alot So much orr lrrds~or alkh~ugh~ 2 aCu~s walkln~ a0~5s~ we are certainly a part of Ipr4ow that will be a t+c cartoer~l fir every perm Who ~+4 t~ldt mi:€, hay 4a drive on tha# rand. But m~ fir children will ~ fur hacl~yar+ds IoOk cu# Oran the property. 54 ~ +~II go to Jennings ~Iemenf~rY Schl. And I don't ImOw 1 1Ne've loved this property i~r aS IOnQ as we've lived ~ if any of you crave ever n Aver there during drop-off ~ khere, We've been tyre ~n years. Mary of neighbors ~ ar7d prck~up, llut I #ald tie ~l Marrager~ at is a ~ a~oe orrg~rra! ~ b~ryers acrd borsht khe~e Domes to Ihre ~ wit w$ihrrg ~ happen. 4 vut their lives. They`re toward their reti~rrrerrt, ~ Sv figure khere's I.DD-andnrye-add units. 5 There's n0 plays orr movli~g. I w~or~ld ~hallen~e hl~ ~ ~aci~ Orxe of those has one kid. 44 a~ thaw I~Q kids ~ factor of owrrar-cccuparr wath~n the single-farnlly. ~ 9ain9 ~ go and how are they going to ge# to aid out of 7 I have a ~ug~ eorrcern about ~e try, B ]e~nlrr~s Elennentary? reuse that the school pane 8 There's two areas of lrigress end egress this ~ t# that would be in. FIB anybody dory the honOrk tp ~ preppy. is ai~k~ And o is Winder. f ~0 ~u know t the school roan l~arrdle ~ many mare kids? era unit means at least 1~4 cars or r+augl~ly. Ti+e's $ lct ti That ~u~rr~ydale ~ rte. It's nvt I,i of Schaal ehl#dr~. we're withrio a mile of #wa 1~ Sur~nydale, It's like ~Un Valley or something is t#~e elementaries acrd a middle sci'rool, A lot of walldng. ~3 srr'ee~ that ~ Yelldwskone where Jennings is at, 1$ ~hlldrerw tk use tirak area cut through to go to ~t Thak is a tw~harre stmt. Puri dr>~p-off and dick-gyp t~ school. ik ~ a #aur-lam highway. How khere'S trot briery i5 ~rf a pr~tLy weekend day, theme's hikers, i~ aaelder~ts, I don't brow. but add more kid to that 1~ there's bllaers. Tlrens's faeauGiful wildlife back there, rness, and that`s sorry. ~r There's a per Hawk t# has iiv~d back there far ~ I ann cOa~rrred about dusk as we'rre Said, t three years. An, owl that's lived k there fir several i~ artments that ar>e in the general area have bin tears. It's wanderi~l to lpok out an that. end I my ~g dilapidated and dar'r't look tha# great. wo a~ can age ~p I~ckyard looks out an tflis IP~Pe~Y~ ~s on that.. the crilme In ttrat a ~ and aparkrnenk ~i Ta s$y that he could not that [ ~~Id buildlnc ere apartment huildin~s. A tell me ~0 years not see theme dwellings i~ absolutely fal.~. I G~l1 ~ from now that those aren't going ~ loolr they're ~ thr' townhOrrres from wh~r~ I am~ So #o not be able k~ s~ doing to loofr brand-crew still. Tell me t#~t~ nok g~~ a ~~-fiat dw~eflfng, that is not true. the i~~rrt my Prey value. At~d then maybe I'd fcr f lust don't see hOrr his develppmer~t fll~s Pi.Ai~hlilVG ANQ~QI~lI ~II~IIII~SI4H APRIL 9, 5~ 5~ Of 30 i a void in our CI and tY ~ alaliy, in what this arm 1 preflkable deal the pauld er~hanae the And that's ~ rrls. W~ have plenty ~f apartmerrks, fire's a lot ~ ~ fast my aplrrion fr~n a {rkinr~ Isar s~ridp~~, ~ for Ilse Si~r15 ~vaiia~fe rwow wild the eooriomy. ~ CNAIR141AN WAT'1~; Thank yn~ very much, ~ In my opinion, tn~ is. berg ~~9~ out ~r ~ Anyone e!~ Illlu~ 6n speak for or ag~rlnst thlS item s one thing a~ any thing only. it'S ~ fair prl, And ~ ~4t~yane else #iM wou~ ~ilce to spear for ar ac~alr~ ~ it`s a ~ui~c #~mkeY ~raflt far just a fear In~ividua~. ~ ~IS,1NI:f.I'I-I: ht~u rte is~lllSOn Welch. ,4Frd 7 Ttrank you. ~ ~rnn withlr~ #l~e ~g4 feet of the site, My backyard ~ i~L4Ii~lAlq 1~f~4T1~YfV~: Thank you verb mr,~h. Is ~ act~anlr laol~ t opnn #~e wok side ~ this p~ ~ #~er'e anyone eke #~at would Ilke to Speak for or ~ site. z bnu ht house on ~ mY purpose its that neighborhood ~ against #l~ls Jim? phase ~~ne forward. td b~cau~e it ham ~ p agairr~ bhe ~reenb~t. ArNd all the 11 MR. TAYLOR: ~ evening. I'rn Rid Yaylor, 11 trees Irt the rilirr+ gaite r~lgi~b~arhond bo raise my snn. I~ ~'m a Iocal. i~ Thy tric would #e horrendous if they put r~ that many ~ Ir'FiAIi~lAl~ iN~4Ti~l~ ~y~, would, wheq Y-3 homes. ~ You' 1 wi~is#~ed, fill out ors of the yellow cards ~rrer ~q I ree with ag Y~r stafi'saylr~ #l~lt the ham' i5 would be a mph of a change fear this srr~ll oomrnunity. i~ ~R, TA~'t.Dli: Yes, sir. There are very marry single-family homes in the 17 ~FIAIIt1~lAN VYATI4IN~; Yes, then y4u'n? 17 ►~~lhborh~ad with small ~fwildren. Arad tlli+y all walk bo 18 t~nisi~ed, nol. i see kids walldrlq in the morning and R. TAYi~R: YeS, s~, Y'rrr ~ local i9 a~err'woon, And I think with tr~ic w#kh r you know, fQ~ ~D bullder/de~ia~r reGerit t0 the []el~ton a~a. I've 2~ plus mare cats being in the n~~hborfiood wig that small hire about three years now, i actual live in Garin#h, ~t of an entrance and 1t wo~1d be a wry bad idea. but I spend en~ugi~ bme up heref Y fee# like a Dention I raeaily l~lae the neighborhood. And i resident. ~3 thirrlc most of tf~ peoe I hive spoken tp within our ~ I' takes a IoolC at this Rmlperty mare r~6g#rborhood appose the fd, as well so. ~',ar~ic you. ~ m an lnvnr"s s~ndirrt, I reprn# a sr'nall Oh, my ~ddn ~ ~ 1G4 Lida UU So m b aY Y ackyard i~ ~8 t group of clien#S wltio lnrrest Irk deahs Brach as these i aq~lnst that, ~ sorrrnes. And as Mr. Baru prairrt the Y~ ~ . . ~IfAI~MAI~ WI1Ti~N~; Thank you. Araycrre else 3 I€rrnw, ~er~e r~ras concern rn an lnrrestmenk stsndpoirrt in ~ lilac t+a speak 4r against this lbertt? Arry~r~e efse ~ terms of the ahetics ~ tFae ~ appearance of 4 tl would Ilke to speale for ar against his rr~? ~ same of the ~clstfrig near there, 8u~ also+ S f~ease III out one of lfie yellow cards when yQ~rrre ~ bemuse of the density they're o#I~ing, I feel ~a# Ik ~ fl~i~hed, Name and address, please. ~ would be a great addi#ion in that once in t~rr~ of the 7 ~IlJ LAMS: N1y name Is ~~vid 1Nilliar~s, $ passible pr~v~rrtier~ of brln~ing that a balk tap in 8 I lip at ~~1 Aspen Dfive, 1Ne live on the nortf~ side of ~ terms o~ prape~ty value. Arid that's sl~mg of the ~ the property tire. i~ area ~ the sorath, 3r5e, Tire mralf~f~mdy side, Acrd I wasn't $ ~ the tawr~ ..wing ar Prom the Stglldp~irlt of the impacts ~+p the i~ tFie ~lghharhaad me~ingf so I dcr~'t iCrrow t ir1'Ipack of i~ residenDal areas was --which was my rnaln concern in 1~ the Maces. 1~0 children, per ~e, to our scho~s, haw es 11~ terms o1' getting beyorkd the ne~e~~ary ap~rovaJs do make i~ #hat going ~ aft rundlrb~ for khose sd~als~ Y~ I4 tl1's a do$ble del I knew the residents wild 14 lmow~ I have d lot of cbncern~ about the straw and ktae ~ ably ibly s~ against it. T f'~r~red ~a# rq~ds and density ol` traffic ar~d foot. Lori pr~a~y worrldn~t be a bt be~usa of the site of d1e I~ per,;,onally, do lily die tact the there ~itr~ there, whiff is Lt's a fairip mice sire ~ItCh. 17 are trees there on this propert}r row. I u+aik brat path 18 It doesn't really r fnr a cry path ~ than if i~ throu~gia i#'S ~aoper C1'eel~ I believe often, you're a kid or what i~ve you. But therefs a l tfrat ip There's a bridge tha# j~ns an Stuart us and tl•iat ~4 rums acrit to the property which rnalc~ fora prrtY, Artd, as welt, farther up ar F~ir#her to tl~ ry rtii~e walk~ray to end from the park net b~ far from ~I west of the large green bridge t#rat also join the #w~ . this location. 3~ sites ~f the drainage wherti l~ is when #t IS wet. But in terrrls of the passlbllltles of the BrJt I you knoWf I dank k ~ that ~4 area from a profitability st~r~polrrt, I did, persanallYr ~4 stuff ~ available ~m the builder or the proposed, as ~ non the numbers on it. Arid i felt lilac it would bye a ~ far asp Yoe k, #fie taxes and wFaatrti~. Brut I just s~ 3i.ANNIN~ AND ~OroIiVG CQluliwllSSl~hl APRiL 8, ~t7~~ PS~~ ~ 0~ ~ 31 1 it as I~#ng a large ❑~n~rn of adding khab many I~ous~ i wish to speeric for ur agalrt this ihem~ ~ and fat ~e ~ I~i~+iataon to alne~dy riddled skrts. ~ RirJc, I`d Ilke ~ offer yon tern rMrit7r~tes far 3 Artid, as well I meanr our nel~gihl~orld~ you l~rlow, ~~eY 3 rebrl, plea sir. ~ # don't know far Pete tr~vef in fhe ~~y, But ~ Mlt. ~AI~IA; Thank you, 1Nell" I sitiould ~ o~rr rreighl3orhood, Z wo~id Y. still ea"r0orri ~s Y I~ ~ I don`t mean ko stir up I~r1htiGYe~'SYr but I $~J~55 I Dave. ~ hfereules ar~d up in there, INe have ~parl~ents u~ diem. ~ ~obably I s~rvuld start first to set Mme 7 Therets q~fke a large nUrrrber of rat-sa-well-f~e~t ~ people's rrrind at rest al~r~ khe d~+abi~iky of tt~ ~ aparkFnen#s, And ali~in-all, apartrner~ n't rally $ restrict~on5. I n't imagine th~ after we went ~ k well ~ what I believe our neigfaborh~atl Y~ g throur~h ail khis end I still have arr 5tll} th~rt I have i~ ~f ~rl7at the nelghbaritinad I mil rota Is. Yore lm~w, io toga through, too. I'll have add'€tinn~l sr=rutiny. I ~1 adding mare isn't a Ana for err neighborf7ood. 11 can't Imagine that if we were b~ 9~ to that poir~# that ~ C~IAIRMi4fV ~YATKINS; Tl~nl~ you very muCt7~ 1~ a ors would ~or~e hack acrd sa h we wad tv Mme ~ Y, eYf ~ Anyone else w k for or ~geinsk th€s ~ All bads and tha rt. I'd ~r~balafy h at I~ three s~ rig#~t. If th's anyone else that wishes speak ~ i~ tlm~ as rna nY peo~~ out And their thart~s world i~ this, f3 Dome down and ~ nn de+ek. pfei3ise go ~ftead, ~5 pnobabl~+ not vet goad. 16 i~15, B~4~I~ftl~i~; HI. My name is Anna 1~ So its Bean ~5 years, Itrs time bo da 17 13raudriek, I'rn at 3~~~ ado Way. My Backyard does bard s~ so~nethlr~g them. And I understand that some of the i8 u~ to the Rmy Pied property. f~ trees will have to go, I would cerkair~ly dike to see ~9 ~ I k~inlC my biggest ~n~m ~ this p~irwb is them shy. Artid that is why tl'iat x have siRed that ~ that by changing the ressri~af use of i~ we enM we're wing t~ issue a br~ffer. fl~p~y~ ff I geed to p opening ~ ~p to the ibiliEies of oarr~rnerciai use or ~1 that it will he le## in its nral state or v+rhate'ver, I other opporhunik~e~ khat your stafF Peed, gue we ~n do tl~at. ~ kith the economy right new, there's a whole ~ t right now this Is the very first ~4 lot o~ stulef up ire the a~, I+Ve~e heand that there is a prelinninary sip so that we pan bell those people out eurrt land~wrrer. And we've head that #hey`ve talfeed them that are loaldng at it, Syr it's worth, you l€now, ~ to investors end that they have ideas. lit it dae~ ~~t 1 tpnsidering ~ IF we don't get #hro~gh the #irst sip, ~ seem R- I'm rrot ~gnvirrced that them ~ ~ detlrrite pi~rrr ~ it's going to stay vaunt far I don't know haw ma more ~ fat there is a de#inite Tr ~rar, few, til'~t t~y~'ve gqk ~ gears. Arid ~ rrray be bhsrt err or i'i~ a ~ ye ~ from now ~ all their Invesbpr5r they~►e got all #heir lacking, this ~ we`ll have ~ different 9muP with a difh'r+~t minetr ~ is detirii#ely what they're b~rilding, I# s~rn5 like ~ and th ey won't pare Imp~e restrictl, It may lac ~ tl'~re anuld still be a lot of el7anges that hapn. s khat the developer doesn't ~anr fir it. I think wit ~ ~Nhat happens i€ this ends like ftayaar 7 this is probably the best op~rtunfty that we've sin ~ Rang or ~nythirtg else right now ~kh the e~norny that ~ for anyt~ir~g of quelity. ~ v+re aid arrd Ib i~ app~ved, it is ~a~~ed f the City ~ Mows I ~rrwderstand tha# ~oQle rraturafly i0 rrcil to malce,t the l'~ix Use 12 ~r1d tl~ investors 1~ eb~~t to apartments, but o carr see a great 11~ puff out or they change their minds? And then all of a ~i difl~rence between apattrnents who are ~ that are run ~udderr we nQ longer have this par~~ular tavimhame or i~ wgell and these that are not+ And I do believe that if 1~ , apartment or the rental asage, And we have ether t~ we're going to inve5# the r~on~y and that we iaBgan to t~ businesses came in or we have nther opportunities ~ 1~ improve the rig hborhaod with tl~ls tyRe of oonsuctior~ 15 00 in. T}ra#'s my o~rrcern. f~ and the feet that we're going bo have the semi green If it is if ik was yet in s#~ne that 16 s~aee ~s N~ 3, that that wfil make the neigh~rhaod l7 #hls was definitely whit was going ~ happen, then, ~ufke a bit Ir. t~ we have #l~ tic Issues, We have extra ehildrerr 1~ Arid it is unusu$l that, of cau, we have s~ to tip school district,, whi~:h, obviolY. by mY shirk, i9 misnames tl'~ caning that we h rraw. &at that was Is a oancern for rrre, But I think the larger fear that I becarlse it when tf~ mining ao~prehertsive mining was have ~ that it"s riot a deflrlite projefit and tyre Is a ~t ut in lave if you dldr!'t come arrd ~ p arrd 3~ lot df opport~rr~ity for It to €all away. And its efl '~e an a~sen landlord which this guy was. He's ~3 rerred. And then we have no 1t1"~ over wi~at g on from (~li~rnla. 1Nell~ he didrti"t he didn't get ~4 that praoperty. Thank you, ~ anythlr~g but juste basic~ll what tf~ Yr eY gave yo~r~ If ~s ~IAIRMAN VirATIQI~S: 'TPranlc you. ,4nyo~e else it's a vaunt pig of P~~Y~ Y~ got lVA ~ or f11it I'I.AI~IHIf Al+il~ LOlil ~QIMi11S~I~N +4pI~L X009 P~~~ to ~4 ~f ~ 32 and that ~v~s I'k. ~ i area khan u r it follows more crime. ~Ut n ~ Now, If yeu had Borne plans and iron erne irr ~ this is a r~r~tal, we can forestall that iiF you ~ end nee ~u 9~ something a I#I~le bitter. ~ want to III It detpne for many yam, ~ And sarel~r sornek~ady would #~ve gatGerr at N>~ 6. 4 As h is f~ craw, we've alr+~~r 9~ a ~ Them"5 nr~ any N~ ~ south of hie, ~ dedlne In t#~e aria where we've g~ un~ ko the ~ I coo have ~ goad barrier ~ on the ~ act. And we're calling ~k N~ Anti we've T north. I haven't ~E►~11 It dry art. &!t I'm sure In T ei~t~-~r~d-~-half units bb an acre ~USt tO the south ~f ~ s~rrre year, ~ phi does, '~til'I, it's ~ good ~ us. I# seems to rr~ we ~ I m re ' l~ tt3r rp~tii'.~le. Aid 9 barrier, And I gave a n~i ~ with ink trees. ~ then the area that's IYR I~, the actually ig I~4 unit 1~ Vye darE't ►+►~nt ~ take th dawn. i< think th~ we'~ i~ than acre. ~i done ~ Ar~tly good fob of tryfr~g ~ take die assets that ii I rr't #cnnw #~at ik really does me any 1~ are on khis site, which is isnlat~on, artd +mprove u~pr~ good to gay anything rare, But I do wkly that the 1~ those and ~150~ ran then7, 13 nelgl~b~rs would t~arre came to the rr~reeting. I don't low ~ IYa ~ Is ding pt~t ~ busir~ss hem. x4 that hhe #xese€1~tion was ~ w~i01a lot dff~erent mouse i.5 mow, maybe 40 or~D years from row when that ~aY be 15 about perae~t ni* It is the same slid, Arid I 1~ r~idered the tenter of per~onF maybe that will change, i6 haven't really changed anything added addltlonal i7 &rt that will be up to sorneor~e at a l da6e ba ~ i~ ir~faN'r~adon, It's toy mach trouble fbr me to key 18 tha#, A# t#~ur #ime~ I think that we can rest easy that 1$ several starie$, 19 fl0 aria is going want to pat arty business an a plate ~g ~Ne want to proceed, we think that we"~re that's sa ba get to. ~D dot a hod ~Ro~~nlty here. But the first thirpg w~ #i , aS far as the trai°~1c, that wljl be ~i need is we wed b~ ~ the Wining ad~usbed. And this is addrd when we plat. I probabl~+ should may, again, the way I know how Thank yam, that we haven't had th do a Tr~fFic Impsct ►4rralys~ CFiAII~~IAN 1N►4TI~NS: Thank you. All right ~ becau~ we're below that th~eshoki, ~Il close the public hearing. Dlscussidrt~ stlorrs~ And, flnal[y, I gas I would ask at~t the 2,~ i0dl~ 5h 3 noe~t o~ ~quirln~ d~ owner bo rrtaintain h In its ~ ONIMI~I~NER SCHAAI~E: Mr, ~haifman? ~ ~ natural stag for the Gene ~ everyone elm. ~ I~h~4N 1NATIQ~IS: Yes? ~ man p'aY~ taxes every fir. And ire rrr ~ ~'QMIvII:S,~IOFI ~C'J-1,~4~~: rrn going to gv ~ be ~ pf that, And i unders~nd that rat of us ~ ahead a~ maloc a motion that vie ap~r'ov~ this with the ~ don't want th see any type of ~u~:kior~, put a Iot ~ ~rrerlay b~trlct as it bas keen described very oar~~lly ~ of tl1~e v~jectlans that we have a~ riot really abnnt ~ far res~errt~ai use orrlp, far the retention of the larag~ ~ khe mining. They're ~I~qut conskr~otlon ~ anyt[~Ing ~t ~ trae~, for $he height restriCbpr~ ~3 fleet, r the it all, $ wider street spy of nine feet, and for t! ~ Ida krfaw h~a~ they fem. I Jlive jusk 9 preservation of na~~al area. aer frem arr ap8rtment canplex. Acrd when I Ilved =g CHAIRMAN WAI~f~~: ,y, ii there, it was all w~vded. ~~e I~st I~a~. A~ when I ii COMMI~$I~PI~R EAGLET I'd like t+a second i~ was a kitl, I used to play over thenw, I rernemb+er the i~ chaff Mr. Chairrrran. s~ discussions we hacl and the things khat we ~Iked at~out. i~ CHAIR141AN ~fVATI~N: YVe have a cnnd, Arrd t is And it didn't turn out ~ be a Ind project at all. They a~ume th we Qot all ire oorlditiorrs. Ali righky, aotualiy turned out ~ be gpod ne~hbor~. Tl~er'e's a 15 yVOUfd you vote on the l~aardt please, okay. I have fir iB gofF terse a~os$ ~1e street. 1b two in favor of the moblon. X~ The density is abut the same den~ty as 1p ~ktMI~SI~NEIii LYK~; I have a chancy bo i8 this or1e. Arid it turned avt ~nrtty well. And it's not f8 ex~l~rn my von in opposition? po I have a ci~nce td i~ noisy. 1Ne don't have ~ ~k of aaitllt in the rrrnrning. 19 lain mfr vote's When P1e work there`s trot, ~r~ when they ~ CI~1I#~MAN ~NATJevII lure. . ~i came Dome ##~ere Is, ~t we don't l'~ve people milling ~1 COMMISSI~NEh l.Yl~~: The argument prested ~ around. It's ►hfeil run, i don't grow of any tdnd of by the developer is pr~marll~+ prlicated to his ability ~3 cane In #hat neigh~6erho~d. A~tf that's the way It is, ~3 to rr~lae rr~oney on thls p ~ laid. The pe~rel~prr~rrt ~Iherr you see a r~i~hborh~d going downy Cede discusses ~eser'vatior~ and ~ of exi5tlru~ dawn, down and peop~ resources mire into an ~5 neighs, A~ I don't krtow~ Marf~ if there's a PI,►~HHIIVG Alp ~~MII`I~ CI~N~IIISSI APRfL 8, ~5 ~0 0~ 33 ~ pert in ~e Devopt ~ that dls~~es the Rl~r~nir~~ 1 7~ ~ 8r~ Z~J'~Jng mmiSsJ's r'Ol~ help~r~9 ~ d~arrge Its ~ ~ so ti~~t delop~rs ~a~n tern ~ It ~ plot of ian~, ~ ~ but the argument rIIY G+ked by the dl~p ~ ~ ~u~Y ~'~t-rr~tivat~. Arrd I dor~rt t~~nk tl~t tf~atFs ~ ~ ~ v~ii~ arguer~t for charging tie ~~ning ~n this plot ~rF ~ T ~ar~. ~ ~ MR. DRAi~E: If ~ ~ tt~t g ~ m way staff irr terms ~ rr~tl~n ~ appr ~ ~o his i~ ~.mer~ati~n ~t~k~is~ir~ it blr~e. IF ~ ~a ~i ~ny~ne was mislead ~y klt, I want you ~rraw that, ~nc~ againf this will be ~ recornrn~ndation t~ the ~ council. Tl~e Cary ,ncfl Valli have arl~ther ~ubli~ i9 i~ iarir And w~'li ha~r~ tfie final et~iion 011 the i~ i5 ~r'fty, 15 i~ ~FlAI~9AN 4~fA~N Does anyone else have 1~ ar~Ything eis~ vr~ t~ls its or fir Ial? ~ ~on~der us ad~QUrn~tf ~:~4. t8 ~Ceral Session a~a~rned ~t ~:~4 p.m.~ a~ $5 #5 i i ~ ~ ~ 3 3 7 8 8 9 9 1~ 1~ i~ . i~ ~z . i~ it 3$ 1~ 1~ ~i 21 ~3 ~ ~ ]5 ~I,1W~l~H~A#~IDZQI+IIN~MISSI~N A~RIL~, ~44~ PB~~ T~, 0~ w5o-2iii3a_wiWh~y xsrs:•::r.~. i. r'...•t~• 34 EXHIBIT 9 CITY COUNCIL MINUTES (June 16, 2009) 4. PI7BLIC Hi~.ARiIYGS A The Council held a public hearing and considered adoption of an ordinance of the City of Denton, Texas, providing far zooming change franc a Neighbo~ood R~side~al 3 {NR-3) naming di.~ict classification ~d use designatia~ bo a Neighbo~ood Residential Mined Use 12 (NRMU-12) zoning dishict classification and use designation with an overlay district, o~ appmoximately 15.13 acres of land located west of Stuart Read and appro~tely GOd feet northwest of the mRe~section of Windsor Sti~et ~d Stuazt Road; ~d prwidmg for a penally m the magim~um amount of ~2,000.00 for violations thereo f severabilily and an effective date {LQ~ OOl6, Pine Creek}_ The Plaa~mg and Zoning Commission recommended approval {4-2) with an overlay distiick Mark [ti~nnmgh~**~ Director of Planning and Development, stated tLat the request was to rezone 15.3 acres fiam NR 3 bo NRM[J-12 with a~ overlay di.Rhict to allow fior ~ultif~ly dwelling unrts_ 'I~e applic~t was proposing 6o aoashvct a new m~hi family development consisting of appmoximately 121, 2 bedroom uaits_ However, the existing zoning of NR-3 did not allow the Proposed use. The Development Review Committee recommended denial; however, the Planning and 7aniag Commission recommended apgmved by a 42 vote with conditiQns_ Those conditions included {1} uses were li~rited bo residential uses only, (2} the building Leight would be 33 feet; (3} a 4~foot vegetative buffer would he req~ed a6~lting the residential subdivision to tie west using existing vegetation; (4) the maAi~ density would be 9 dwelling amts per acre if stacked verlically or S dwelling amts per acre if side by side, the m~imoum impem~ea6le area would be SQ% the parkway width would be a mmim~m of 9 feet; aad ('n the minimum side yard as meas~u~ed between buildings would be 30 feet and 15 feet if lets were ind~i~ually owned Smoe the Planning and 7onmg Commission meeting, the applic~t had requested a more restrictive cage to tLe m~i~ density oa~dition to 8 dwelling units per acre aid buildings would he oonshuc~d in a sid~hy-side aaangement_ Notification within St10 feet bad been saint to 56 property ownets_ As of the stazt of the meeting, 24 respan~es bad been received in opposition wLicL re~uesented 1796 of total land area Council Member Waits asked about fie notification process_ Some of the area u.~ed to compute the land mass was a portion of a lot and some of ~e land was a green belt area owned 6y the City_ G~mamgh~ sued that there was a walbng pith awned by the Cily- Co~mcil Member Watts stated that how those load masses wane considezed might be critical to ~Y P~~~ ~ ~PP~ti~- JeIIy Drake, Deputy City Attorney, stated that the area witL~n 200 few was the critical land maser 35 City of Denton City oimcil Minutes June 1~, Page 11 Council Member Watts sued that the lots partially wi~in the boo feet of the rezoning would be counted in the area inside boo feet He felt it was critical to kaow if the ciiy~wned piece ofproperty was included. Drake replied that pubGcally owned property could be crnmdte~ There was no protest by the City that was counted in the figures. stated that the city~wned property was coated as the law did not nuke a distinction between public and privately owned property. Council IViember Mulroy stated that he ~ there was no diffezenc~e between private and publically owned property when calculating the land mass. However} it appeareri that no notices was sent to the city and na response from the ci#y. He questioned ifthis was a defeve notices as the city was not noticed and the ramifications ofnot following proc~~ues i~haruse. Council IViember Mulroy stated fat the caning indicated I►]R zoning ter fniuple~es and duplexes and aslred if fourple~es were is accordance with NR zoning. sued that the Zook reaing applied the R zoning. The fourple~es were there prior the ,oo re~a~ning. R would not allow the fa~nplexes and the ones gently there were considered special exc~rions. Mayor sued that the IVR sha~uld have been RM[J 1 to be consistent with the cuQent uses. stated fat the area to north was city~wne~ A notification was sent to the pity but no response was received in opposi~on Mayor BuQOUghs asked abort the pnssr~bility for the city exclude its awn property from the computations. City Attorney Burgess replied that staff would research that possibility. Council 1Vlember F~gelbrecht noted that if city property were taken out of the co~aputati~n, there might be a change in who would be ~tified, etc. Council Member gory felt there were two options to consider after the public hearing. [one was to postpo~ae and the other option was to able the item to clarify the questions. He felt it was not for city~wned pmaperty to be part afthe ~a~a The Mayan opened the public hearing. The following individuals spore during the public hearing: Rick Baria, applic~t, spore is favor. Council Member Watts questioned why R did not contain the zoning Barra needed. 36 pity ofDenton pity oim~cil Minutes June 1, ~ Page 1 Baru stated that the NR ~ ~o~ng was given to the property dining the OO running. No homes would be built on ihat site. Mayor Burroughs abed why no home's would be built on that site. Baru stated that the area was not attractive. The fourplexes and duplexes were too nm down to build single family homes there. The Public Hearing spealu~rs St~hen Stone, 37 Freeman Road, Iru~ 74 -spore in favor. Brad Andrus, BOO dove, Shady Shores} 7~0 - spade in favor. IVianica [~n, 51 Aspen Drive, Denton, 709 -spoke in opposition. Allison elch# 1 f~4 Lido ay# Renton, 707 -spoke in opposition. ammeDt cards in opposi~on were received from: Bryan Nichols} 51 Aspen Drive, Denton, 7~,0~ Hasa and Jobn O'Brien, 0~ Balboa court, Hentoa~ 707 Pam Lealre, ~ Huisache, Renton, 709 Mee Rory, 3407 per Branch Easy Denton, 7~0~ Elaine Mclnighta 31 ~ 1 Lido may, Denton, 707 Su~nne Penyoom, o Dings Row} Renton, 709 Anna Braudrick, 310 Lido may, Dentin, 707 des High# 31CH Lida may, Renton, 7o7 Jenny Williams, ~ 1 Aspen Drive, Renton, 7~0~ Ashley and Denny Mason, ~ Aspen Rrive, Renton, 709 Julie Ivey, Larl~ey Associates Additional speakers included: Ray Leake, Huisache, Renton, 70~ -opposed plus did not receive notificon and lived within Oil feet of flood plaice bonnie Stever, 508 Aspen Drive, Denton, 70~ - spoke in opposition Mr. Baia was allowed a five min~be reb~ttal_ He stated that he had more than one meeting with the ~ rt with his proposal, he would be saving a higher amount of trees what w~auld be allowed in NR. This was a pond project for the pity beraause it was a good laction fair this type of proposal. The Mayor closed the public hearing. council Member egory asked for a clarification on the response . pity Attorney Burgess shed that the state statute indicated the percen#age for a super majority vote was ~ ofthe area within BOO feet of the area proposed to be zoned. The land area would include streets and alleys but the sta~hrte did not directly address a drainage area_ However, another provision was that the notice would be provided as indicated by the most recent m~micipal tax roll Property that was owned by the pity was not on the tax roll sv a notice was not necessary because of that provision 37 pity of IJenton City Goimcil Minutes June 1, ~ Page 13 council IVlember egory etched that the law did not addres.~ green belts arr drainage areas but did sheets and alleys. Burgess replied ooirec#. There might be other areas that were addressed on other s#atutes but at this poin# in time, she could Hart give a definitive answer. council 1Viember watts stated that he was having a problem wi#h the math There were 1 notioe~s in opposition lis#ed in the bacl~up. At this meeting an additional were received with ano#her handwritten notice from a resident presented during the public hearing. That number could go up to G in opposition Latices were also allowed uP until the time of the vote. when he looped at the proposed site plan and overlay rest<ictions, he fel# #here were some in ~ ~es in the recdationsJoanditions. There was also the sta#emden# #hat some of the lots could be individually owned. Watts motioned, Engelbrecht seconded to table the item until such time as there was clarification on the notification and boundaries for the notifcation Gorutcil IViember Fngelbrecht also waned staffto verify whe~er Mr. I.eake should have or did receive notiflcation Mayor questioned ifthe pro#est letter delivered at the meeting would be ca~mted if the proposal were tabled_ council M 1Viulroy sated tha# another issue was that the overlay conditions b the Planning and ~g .on did not reflect the motion made b the Gommissioa The motion was rete~arn of large fees, a ~ foo# wide stree# and preserva#ion of nahrral areas and that was not included in the overlay . He requested cdariflcation of tha# port. council Member Gregory felt that there were too many quesions at this port and that Go~mcil needed to get right noted tha# t)Ye proposal was not tabled #a a date certain but rather would show oa future agendas as a tabled item. r~nll vote, 1 ~~gell~ i~ye~7 ~ J e~7 y`~ {~ye~7 ~ ~ } e~7 ~ {i~ye~7 Watts "'aye", and Mayan Burroughs `~aye"_ Aliotion tamed ~man~ously. 38 EXHIBIT 10 ZONING ORDINANCE ~:l~ur documer~#~lvr~in~nces~l~l~[[1$~0~~~ caning nrdia~~e.doc . ~RDIAE CVO. AID ORDIl~E ~F THE i'r~f I~ET~I, TEA, ~~~IDIl~C~ F~I~ A HAKE FR~I ~ IiT.~I~RH~~ lII~ENTI~4L ~IIl~C~ DTT~IT LAIF'ICATI~I~ AID LSE DEIC~I~ATI~ T~ ~ ~IEIH~RH~I~ RE]~ETIAL 1IEI~ USE 1 ~ (Nl[J-1 ~IVIC~ DITI~ICT LA S~'ITI1~ ~il~ DEINATI~I~~ KITH A O~RL~~ DITRIT, ~ ,A~PR~IlViATELY' 1 i ARE LAND L~CATEI~ ~T ~F ~TT~ART ~AI~ AID A~PR~XIATEL~ ~ ~T 1~~RTH~T ~F THE Il~'TF1R~E~TION OF wIl~D~R T1ET ~ TI~ART RADA FR~DIG FAR FEALTY THE AUNT ~F ~,~~}.~0 FAR X~~~TI~~T TREOFa E~ABILLIT~' ACID A ~~'F'~~TI~E HATE ~~~$-~01~, 'AREA, Rio Maria, has applied for ~ change in zoning for appraoiu~,atel}r i,I ~f land lea11~ des~b~d i~ Ebit , a~taehed het and iacarp~rated herein by re~'eren~e erein, the `i~'o~ett'~ franc a eihborhood l~e~~denti~al 3 1R-3~ nine .district classification and use designation tc a l~eihbarhaod residential 1~Ii~ed Use l~ ~~J-l~} . ~oni~ng district classification and use desig~ati0n, overlay district; end ~~E~, on April the Planning d ~ni~g omrnission recommended ~ppra~al of the cha-oe in n.~ subject to an overlay district including the following nditions: 1. Uses are lirruted to residen~al uses only; The ~na~imu.m building hai~ht shall he feet; A ~~-~`oot wide ~egetati~re buffer is required abutting the residentZal subdivision ~o the west, ~sxng cxistin v~~et~a#ion; The maximums density shall be eight dealing units per acre, and buildings shall be constructed in a ~id~b-side arrangement; The r~a~irnum impernlee~ble area shall be ~~4I~a The miaimu~n parl~way width shall be ~ feet; T1~e minimum side yard, as measured between buildings, sha11 be 3 ~ feet, 1 ~ feet if lots are individly av~ned, since the P~a~it and fining cmmissian's recommendation, the applicant has requested a mare atrictive overlay district, sett~g forth the andi~o specified herein to the et~nt t they are n~or~ restrictive the pity standards; and ~R~Ai the City ou~il ~ that the change is consistent with the Den#nn Plan and the L~evelap~eaa# ode;1~~, THEREFORE, THE ~UCZL ~F THE ~IT~ ~F I~EIV'I'I~ ~~REE RL~~; ETY~1~ i . The ind.in and imitations contained in-the preamble of this ordinance are incorporated herein by refcre~ee ~s true. ECTI~~ The coning district classification and use desig~atlon for the prope~y i~ botchy changed from I~eigh~nrhood Residential ~ ~ 3~ to l~eighbarhood Residential ~Ii~€ed 39 d~~l~~inanc~la 0~4$-~~1~ ~~n~ng ~r~i~am~e~~oc lase ~lJil~ with ov~~lay establishing the 1`~lluir~g co~di~or~, to the extt t~~ are more restrive than pity st~ndas: 1. TJs~s ~ limit to res~ide~~~1 ~~-foo~ wld~ v~~~t~tiv~ duffer 1 ul~~d ~b~ittl~ the tSldellt~ 511bd1Sl~11 to a west ooper ldin~~ to ~ east The ~Till~e, Fha~ 1 to the north The iIlage, phase . -foot wide ~reeta~~r~ buffer is red abutti~ the ~dential subdivision t the south The pillage, phase 4~. re~tri~tive wilding pane of 1 ~ feet in width ~identi~ied as n~ ~ : 7~ ~ acres nn the attach Exhibit rneured from su~divisio to c Est cooper Landing~~ east The id~g~, Phan aid ~c The Village Phase sh~1] carry the cllai restt7i~tions: The maximum building height shall ~ fit; ~ I~weiliag units shall be placed In a side-b-side ~~gratio~; less stricti~e buildi pane ~id~ntified as ; 4.~] acres on the attached Exhibit shad cam the fallowing restrictions: I~~velling units may be st~.~~~d vertically, provided the upper stOr dw~lhngs are previded access b a covered stairway; ~ b. The maximum building height shall he feet; ~n both oft~e building re~tri~n ~on~s 1 aid bane a f~lloi~ restrictions sha1~ apply: a. Bu~ld~~a setback from tb~ buffer ~de~#1~ied 1~ co~d~tion # and condition, # , shall b~ 1 ~ fit, ec~pti~ typi~a~ pry j ~ctia~ ~~c~ a eaves, hay windows, porches, etc.; and b, ~ separation between l buildings ~ be 0 f~, ~c~pt ~ the case of onstory ~arag~ ~vhicb shall be pll c~osez thin 1 ~ feet franc other huildis; 7. 'I'be ~irnurn parlay width s.11 be feet if~e site is developed as a gated ity with private street; The maxYmum density shall be 7.~ u~ l~ ; The minimum permeable area shall be ~~o, eoep~,g any pond. l~otvvithtanding the attached real property ~e~iptian, P~ being rezoned includes all pp~ to a ce~trlin~ ol`all adjacent streetrights-of~~vay. E~~~ 'fhe its oieia~ 1d use map is ~ amended to show the ~l~nge in e d use designation. E'TIT if pv~slen of this ordinance ar the applicati~~ thereof to ~ peen or circumstance is held invalid by court, such a~va~dity shall eat a~`ect the validity of ether pr~vlsians or applications, and to this e~ad~ the provi~inn of tl~uis ordir~an are severahlea ETA . Any persa~ violating any p~ovisian of this ordinance ~ha11, up~u conviction, be fined a s not exceeding ,~o0i~~~ Each day that a previsio~a of this ordnance is violated shall constitute separate and distinct ae. 40 ~:l~ur ~o~un~sl~rn~ce~lk~1$~~ ~vnin~ ~r~in.~ac 4 ~TII~ ~ This ~~dinance ~ha11 ~ ~a ~1~ d~~ m the date of its pa~~~~, and the its ~cr~tary i~ di~t~d t~ pus the ~~ia~. ~fthi oan~e t~ b~ publi~h~~ ~ ~ the l~tan ~d~~~il~, ~ dimly ~~wsr ~ub1i~~ ~ it ~f I~~nt~n, Texas, within t dais ~I"th~ da~~ fit ~as~a~. . PED ~1~lEL~ his the ~ d~, of_ ~I~. T~`~T: ~~F AI~TEI~, IT ~~ET r T LEAS, ~E 41 s:~OUr dpcurr,~nts~Or~ina~nc1~~1~~$~01~.d~c E~CHI~IT A L~AL DERIRTI~N ~ ~ ~ ~ ~ ~ ~r try ~ ~ a ~ ~ T~~. ~ ~o~. ~ ~ ~ ~ ~ ~a~~~ ~ ~ t~ ~ lase ~ lip; ~ f ~ ~~i~ ~ 3~d1 ~ ~ i1~T~r ~i1i5.~Yi ~i~A*.7F id31~. ~ ~ 73iLFi~k ~~fr~lil ~i~~. ~ ~ ~ iii. ~ ~~i~w PEE ~ 42 silour ~ocutnen#sla~ciinan1~~~-0~l G.~flc ~ tea: ~ ~'~~c~~ 1 ~ ~ ~ ~ fie. ~ 43 LOCATION MAP oj~ !It , R1'°4 ..~a r r- lit {r' 4 a P~7 {.{~sw N is .d qi 11 f n % jyk t~. A ~ ~ h I ~ ~ % ~N ~ I•.oA, i livn, site a v t a ylgy,; r x .r'~ x S ~K ~ y i t l Xg, Sn ?y~ zEp L Y" ~ boll Fix ark} 10, .17 : t iT. „ { EXHIBIT II SITE PHOTOS Photo looking at the west side of the site looking at existing trees to be saved for a 40-foot wide vegetative buffer. F l ~iyl~ t 1 ! F Photo looking at existing berm on the north side of the site. The existing berm currently blocks the view of the neighbors to the north and will remain. 45 {ilk x Y yy< tom, a14Ld6~;~Y,, . ~v:~rk s~q . Y^ ~ ' Photo taken on the east side of Stuart Road lool:in,-, west at the site. Photo taken on the east side of the property looking southwest. 46 s:lour documentslar~inances11~1~8-0~~6 zoning ordina~~e.doc ORDINANCE N~. AN ORDINANCE ~F THE CITY OF DENTIN, TEAS, PR~VIDIl~C~ FAR ~~NIN CHANCE FR~I~I A NEIC~HB~RH~~D RESIDENTIAL {NR-~ ~~NIN DISTRICT CLAIFICATICN AND USE DEIC~NATI~N T~ ~ NEI~HBRH~CD RESIDENTIAL 1VIT~ED LJSE 12 ~NRU-12} ~CNiNC DISTRICT CLAD IFICA.TICN AND USE DEICNATI~N, KITH AN C~ERLAY DISTRICT, ON APPRCn1~ATELY l.I ACRES OF LAID LOCATED ET ~F START ROAD AND AI'PRC~.ATELY ~a FEET N~RTHEST CF THE INTERSECfiIDN ~F IlV~DSOR STREET AND T[JART ROAD; PRDIDINC~ FAR A PENALTY IN THE NI AUNT ~F ~,OOa.aO FDR Z~LATICN THEREOF, E'ERABILITY AND AN EFFECTIVE DATE ~~a~-a~ I AREAS, Rich Baria, has applied for a change in zoning far approirna~tely ~ I acres of land legally described in Exhibit A, attached hereto and incorporated herein b~ reference thereinafter, the "Property'} foam Neighborhood Residential ~NR-} zoning distr~iot classlficat~on and use des~gnat~on to a Neighborhood Residential I~I~xed Ilse 1~ ~-I2} zoning district classilicatian and use designation, an overlay district; and V~HEREA, on April S, ZaO~, the Planning and honing Commission recommended approval of the change in zoning, subs ect to a~ overlay district including the following conditions : ~ ~ I. Uses acre limited to residential uses only; The n~axin'iun~ building height shall be 3 feet, 3. 4a-foot ~v'ide vegetative buffer ~s required abutting the residential subd~v~s~on to the west, using existing vegetation; 4. The n~axin~urn density sha11 be eight ~8} dwelling units per acre, ar~d buildings shall beconstructed in aside-by-side ararangen~nt; 5. The .ximum impermeable area sha11 be 5 a°Io; The mir~.um parlay v~idth sha11 be 9 feet; 7. The minirnuxn side yard, as rr~easured between buildings, shall be ~ a feet, or 1 feet if lots are individually owned. ~EREAS, since the Planning and honing Commission's recannendation, the applicant has requested a more restrictive averla,y district, setting forth the candlt~ons spec1~ied herein, to the extent that they are mare restrictive than City standards; and 'HEREAS, the City Council finds that the change is consistent with the Denton Plan nand the Deve~apn~ent Code; N~, THEREFORE, . THE COUNCIL OF THE CITY DF DENTIN HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this ordinance are in.carporated herein by re~'erence as true. SECTION 2. The zoning district classification and use deli at~vn for the ro ert i p p Y hereby changed franc Neighborhood Residential ~NR-} to Neighborhood Residential ~Vlixed i s:l~ur d~~u~entslor~inancesll~~~$-O~lb coning ardin~n~e.~oc use ~ ~ ~U~ 1 with overlay establishing the following conditions, to the extent they are inure restrictive than pity standards: 1. Uses are llinited to residential uses only; A 4~-foot wide vegetative buffer is ~equ~~'ed abutting the reldellt~al sUbdivisl~l~s tv the west Cooper handing}, to the east The pillage, Phase 1 ~ and to the north The pillage, Phase 25-foot wide vegetative buffer is required abutting the residential subdivision to the south The ~~llage, Phase 4, A restrictive building zone of 210 feet in width identified as done l : 7..5 S acres on the attached Exhibit C~, s measured from subdivisions to the west ~Coaper Sanding}, east The pillage, Phase 1 }and earth The ~~illae Phase 2}, shall carry the following restrictions: a. The ma~in~um building height shall be 3~ feet; and b. Dwelling units shall be placed ~n a side-by-side configuration; A less restrictive building zone {identified as done 2: 4.7~ acres an the attached Exhibit shall carry the following restrictions: a. Dwelling units may be stcl~ed vertically, provided the upper start' dwellings are provided access by a covered stairway; and b. The maximum building height shall be 40 feet; ~n bath of the building restriction zones ~~ane 1 and done 2~, the following restrictions shall apply: a. Building setback franc the buffers identified in condition 2 and condition # shall be 12 feet, excepting typical pro j ectians such as eaves, ay win cws, porc es, etc.; and b, ~inxinuin separation between all buildings shall be feet, except in the case of one-story garages, which shall be placed ha closer than 15 feet from other buildings; 7. The n~inimuin parkway width shall be 9 feet if the site is developed as a gated camn~.unity with private streets; I S. The maximum density shall be 7.5 units per acre; and 9. The niinirnun~ permeable area shall be 0°Io, excepting any ponds. Notwithstanding the attached. real property description, the property being rezoned includes all property to the centerline of alb adjacent streetrights-of ='at'. E~T~~N . The ityrs official land use map is a.ended to show the change in the land use designation. ET~~N 4. ~f any provision of this ordinance or the application thereof to any person or c~rcun~stance is held invalid by any court, such invalidity shall eat affect the validity of other provisions ar applications, and to this end the provisions of this ordinance are severable. ETI~N Any person violating any p~avision of this ordinance shall, upon conviction, be fined a sung nat~ exceeding $2,000.00. Each day that a provision of this ordinance is violated shall constitute separate and cllstinct offense. s.loux ~oc~me~~slar~tnances1~41~48-041 G zar~ing ordina~~~,dac ~TI~N G. This ordinance sha~1 become effective fourteen ~ 14} days Bona the date of its passage, and the pity secretary is hereby directed to cause the capt~vn of this ordinance to be published tv~ce a~ the Denton lecord~Chronicle, a daily ne~spapex published in the 1ty of Denton, Texas, within ten ~I~} days ofthe date afits passage, PAS QED AND APPR~ED dais the ~ day of _ , ~o I o. ~A A. ~UR~~J~I, ~ViAY~R ATTEST: JENNIF'~~ 'ALTARS, CITY ~CR~TA~ r i APFRO~D AS T LEGAL ~~RNI. A1~ITA ~C~ , SIT t ~~~,y~y f i s:lour d~outnentslordYnacesl~.~1~~8-0~~6 zoning or~fnance,~~c EXF~~B~T A LEGAL DERIPT~ON P~~E 4 Lm s:1~~r ~ocu~nentslor~inancesl~~1~08-~~1~ zoning ~r~inance.d~~ F ~~~9 SAGE 5 . i s:laur docume~t~lo~~ina~~esli~lz~8-04~~ zoning ~r~tn~.~~.d~c ~~a ~~x ~ y P~~E ~ AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Transportation ACM: Howard Martin, Utilities, 349-82 SUBJECT Consider the adoption of an ordinance of the City of Denton, Texas, authorizing the City Manager to execute an Agreement Regarding Exercise of Option to Repurchase Rail Corridor, as appropriate, by and between the City of Denton, Texas ("city") and the Dallas Area Rapid Transit Authority ("DART") transferring the Denton Rail Corridor, consisting of those lands described in that certain Quitclaim, dated August 9,1993, County Clerk File No. 93-R0058485, as corrected by Correction Quitclaim Deed, dated June 1, 2001, County Clerk File No. 2001- 80057561, and as corrected by Correction to Correction Quitclaim Deed, dated June 28, 2001, County Clerk File No. 2001-80076013, all recording references to the Real Property Records of Denton, Texas. BACKGROUND Dallas Area Rapid Transit (DART) representatives and City of Denton representatives have met for several months to negotiate terms and conditions relating to the proposed conveyance of the rail corridor identified for DCTA's A-Train commuter rail service to DART. The City of Denton (Parks and Recreation) has ownership of approximately eight miles of the former Missouri Kansas Texas (MKT) rail right-of way (ROW) as part of the Rail Banking program. Previous to initial construction of the A-Train, the Parks and Recreation Department utilized and maintained the ROW for the Denton Branch Rail Trail. Various City of Denton utilities occupy portions of the corridor in addition to the City Denton Water pipeline along the eastern boundary of the corridor fora 3 0-inch raw water line. On September 14, 2009 DART submitted a letter to the City of Denton providing written notice to exercise their option to repurchase the Denton Branch Line formerly owned by the Missouri Pacific Railroad Company (MKT ROW) for the amount of $10,000. City of Denton legal staff will present terms and conditions, to include provisions to preserve the 30-inch raw water line easement, of the proposed "Contract of Sale" as part of this agenda item. PRIOR ACTION/REVIEW Staff has briefed the City Council on a proposed perpetual easement and conveyance of the corridor in multiple Closed Session meetings beginning February 2009. FINANCIAL The proposed agreement will require DART to pay the City of Denton the amount of $10,000 for the conveyance of the corridor. EXHIBITS 1. Draft Ordinance 2. Contract of Sale (Under Separate Cover) 3. DART notice letter dated September 14, 2009 Respectfully submitted: Mark Nelson Transportation Director s:lo~r d~cum~ntsl~~dinances1101~~r~ agreement regarding exerc~~e of option t~ repurck~a~se ~rd.doc ~RDIN~ANCE N~. AN ORDINANCE ~F THE CITY ~F DENTIN, TEXAS, AUTH~R~I~ THE C~T~ MANAGER T~ EXECUTE AN AREEIUIENT ~ REARDINC~ EXERCISE ~F ~I'TI~N T~ REPURCHASE RAIL C~RRID~R ~"AGREEN~ENT"} BY AND ~ETEEN THE CITE ~F DFNTN, TEA ~«IT~}~~ ~ DALLAS SID TRANSIT ~44DART"~ , TRANFFRRI~IC THE DENTIN RAIL C~RRID~R, C~NITINJ ~F TH~F LAND DESCRIBED 7N THAT CERTAIN QUITCLAIM DEED, DATED AUUT 9, 199, ~ CLFRI~ FILF N~~ 9~-R~~~455, A CORRECTED BY CRRECTI~N QUITCLAIlVI DFED, DATED JUNE 1, X41, COUNTY CLERK FILF N0. ~0~1-aa~5~1, AND AS FURTHER CORRECTED CRRECTI~N T~ CORRECTION QU~TCLA.IM DEFD, DATED ~ 28, 2~~ 1, COUNTY CLR FILF NO. 20~ l ~R0~7~~ ~ , ALL . REC~RDINC RFFERENCE TO THE REAL PROPERTY RECORDS OF DENTIN COUNT`, TEXAS; PROVIDING AUTHORITY TO EXECUTE AND DFLIVER RELATED DOCUNNT T~ EFFECTUATE TERMS OF AGE~ENT; ~ PR~vIDINCx AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON I~RE~~' ORDAINS: SECTION 1. The City Manager is authorized to execute an Agreement Regarding Exercise of Optlan to Repurchase Rail Corridor, by and between the City of Denton, Texas . ~"City"~ and Dallas Area Rapid Transit ~"DART"}, a caps of which is attached hereto and incorporated by reference herein, transferring the Denton rail corridor, consisting of those lands described in that pertain Quitolainl Deed, dated August 1 County Clerk File No. R0~8455, a.s corrected by Correction Quitclaim Deed, dated June ~aa~, County Clerk ~"~~e Na. ~~~1-R~~~75~1, and as further corrected by Carrectxan to Carrectxon Quitclaim Deed, dated June ~8, ~~0 1, County Clerk File No. X00 l -R4a7~a l 3, all recording references to the Real Praper~y Records of Denton County, Texas. SECTIGN The City lVlanaer is hereby authorized to act on the City' behalf i approving, executing and delivering any and all related dacu~nents necessary or appropriate to . effectuate the terms of the Agreement, including v~ithout limitation, the Quitclaim and Partial Assignment of Contract Rights and Assumption of Obligations exhibited to the Agreement, and to take all other actions necessary to finalize the Agreement and transactions contemplated therein. SECTION . Th1s Grdinance shall become effective irrnnedlatel~r upon its passage and approval. , PASSED AND APPROVED this the day of , ~0l a. 1VIARK A. BURRGUC~IIS, MAYOR I s:l~ur docu~ment5lordinancesll~ldart agreerrren~ regarding exerc7se of option to repurchase ord.doc ATTEST: .TENN~'ER SALTERS, CITY ERETAI~Y" B~: AP~~.~~VE~] TO LEGAL F~~: . AI~ITA BLARES , CITY ATTORNEY - BY: PAGE ~ i .F .1•-~ ti f ~ .ti i • r. . j~~ t~~ ~~i~~~k~ ~ 1 t~ ti~~, ~r~~ t~~ ~~~h Li~~ F~~~rl~ ~~~r l~r, ~t~~~~Ii; ~{4~~ k~~~+ ~ ~ ~~tx~~t i~~~t~~~ ~~j 1 ~rir t~~ t~~ Sri, ~~~~~ir~~ ~~j~~~~r t~ ~t~, ~n ~u~~ ~ 14 ~ rift-~~'~~~~~, r~~r~h~~ ~ ~a~~ ~'F veil ~ rail ~~i~1~ ~~~~1~~ ~ ~r~t~~~~~ i~~ r~~~~~~~ t~ ~i ~~~a ~ T~~~r.~t ~ r~ ~ its . t~~ t~ ~ ~~~t~t, t~~ ~i~~ I~t~~ ~t~ ~~~i ~i~~ t~ ~~i~~ .it~~ ~n~it1~~ r~~~~~t ~r~h~. ~~~rt i~ ~iu~~i~ i ir~il ~ ~i~ I~~~~~ t~ ~~~i~~ ~h~ ~r~i~~ ~xi~~ ~a i~~ ~~t t~~ ~t ill t~~ ~~~i~t~~ t~~~ ~~t~ l~ t~ ~~r~ ~t i~ ~~i~~~~~ ~~i~t i~ ~r~ ~~~t~ its ~t t~ ~t~ ~ ~ ~,i#I~t~ r~i~~ tl~~ ~~~r ~n~ ~~~t~ ~i~t the ~~~a~~~t~ ~~fi i~ t~ ~ rC~ ~~~~i~t ~~L tai ~'k~. l _ ~ . ~ ~ r r r ~ ~1 r Sri l~~i~ ~ ~ 1 1 r~i~~ ~ ~~n 1 ~n~u its ~~a r~1l~i~ iii . f ~1~~ r i~~ i1 ~ . ~'i~ ~~t ~ i AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Consider approval of an ordinance considering all matters incident and related to the issuance, sale and delivery of up to $65,000,000 in principal amount of "City of Denton Combination Tax and Revenue Refunding Bonds, Series 2010"; establishing parameters for the redemption of certain outstanding obligations of the City; authorizing the issuance of the bonds; levying an annual ad valorem tax and providing for the security for and payment of said bonds; approving and authorizing instruments and procedures relating to said bonds; and enacting other provisions relating to the subject. BACKGROUND The Texas Municipal Power Agency (TMPA) provides electric power to the cities of Bryan, Garland, Greenville, and the City of Denton (Member Cities). The cities and TMPA entered into a Power Sales Agreement on September 1,1976, under which TMPA is obligated to sell electric energy to the Member Cities, and each Member City, is obligated to pay a percentage of TMPA's annual system costs without regard to whether the energy is delivered by TMPA to, or used by, a Member City. The contractual percentages of each Member City to TMPA are currently as follows: City of Bryan, Texas 21.7% City of Denton, Texas 21.3% City of Garland, Texas 47.0% City of Greenville, Texas 10.0% TMPA and each Member City have executed a Global Compromise and Settlement Agreement pertaining to various cases and other related matters and disputes between TMPA and the Member Cities. In accordance with this agreement, TMPA has committed to each Member City that it will apply funds received from the Member Cities to 1) retire $98,500,000 of its Commercial Paper Notes related to a scrubber refurbishment project and 2) redeem an aggregate amount of $195,655,000 in outstanding series 2003 and 2004 refunding bonds. The City of Denton's share of the TMPA Refunded Commercial Paper is $20,980,500, and its share of the TMPA Refunded bonds is $41,674,515, or a total combined about of $62,655,515. The purpose of this agenda item, therefore, is for the City of Denton to authorize the issuance of bonds in accordance with the above stated agreement between TMPA and the Member Cities. The bonds will be issued for the purpose of refinancing a portion of the City's contractual obligations to TMPA under the TMPA Power Sales Agreement. The bonds will be used to satisfy the City's contractual obligation and to pay costs of issuing the bonds, and each Member City has agreed to issue the bonds by May 1, 2010. Agenda Information Sheet February 16, 2010 Page 2 Since bond market conditions can change rapidly, staff recommends that the City Council approve a parameter bond sale. By doing so, the City will be authorized to execute the issuance at any time before August 16, 2010, if market conditions are favorable. With the approval of the attached ordinance, the bond sale may take place without additional City Council approval provided that the par amount does not exceed $65 million, true interest cost is less than 5%, maximum maturity does not exceed December 31, 2025, and that the bond sale occurs prior to August 16, 2010. The ordinance authorizes the City Manager to award the bonds to the purchaser offering the most competitive pricing. Delegating the pricing authority provides flexibility to achieve the best value for the City since the pricing will not be limited to a Council meeting date. For your review, staff has attached a copy of the ordinance and preliminary official statement. Since the preliminary official statement is in draft form, it is likely that staff will need to modify and/or include additional information prior to the bond issuance. Once the bond sale has been completed, staff will notify the City Council of the bond issuance terms. RECOMMENDATION Staff recommends approval of the ordinance. PRIOR ACTION/REVIEW (CounciUBoards/Commissions) On December 15, 2009, the City Council adopted an ordinance authorizing the City Manager to execute a Settlement Agreement on behalf of the City regarding a settlement of the Texas Municipal Power Agency litigation now pending in Travis County and Grimes County, Texas, and the proceedings pending at the Public Utilities Commission of Texas. FISCAL INFORMATION The City of Denton's percentage share of the TMPA debt obligations to be refunded is $62,655,515. The City intends to issue Combination Tax and Revenue Refunding Bonds rather than Utility System Revenue Refunding Bonds and thereby save a projected $2,098,232 over the life of the bonds. EXHIBITS 1. Ordinance 2. Preliminary Official Statement 3. Escrow Agreement 4. Paying Agent/Registrar Agreement Respectfully submitted" Bryan Langley ijirector oi r inance (c) Use of Proceeds. For purposes of the foregoing covenants (a)(1) and (a)(2), the Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the Refunded Obligations expended prior to the date of issuance of the Bonds. It is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated that modify or expand provisions of the Code, as applicable to the Bonds, the Issuer will not be required to comply with any covenant contained herein to the extent that such failure to comply, in the opinion of nationally recognized bond counsel, will not adversely affect the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In the event that regulations or rulings are hereafter promulgated that impose additional requirements applicable to the Bonds, the Issuer agrees to comply with the additional requirements to the extent necessary, in the opinion of nationally recognized bond counsel, to preserve the exemption from federal income taxation of interest on the Bonds under section 103 of the Code. In furtherance of such intention, the Issuer hereby authorizes and directs the Mayor or Pricing Officer to execute any documents, certificates or reports required by the Code and to make such elections, on behalf of the Issuer, that may be permitted by the Code as are consistent with the purpose for the issuance of the Bonds. (d) Disposition of Project. The Issuer covenants that the Project will not be sold or otherwise disposed in a transaction resulting in the receipt by the Issuer of cash or other compensation, unless the Issuer obtains an opinion ofnationally-recognized bond counsel that such sale or other disposition will not adversely affect the tax-exempt status of the Bonds. For purposes of the foregoing, the portion of the property comprising personal property and disposed in the ordinary course shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes hereof, the Issuer shall not be obligated to comply with this covenant if it obtains a legal opinion that such failure to comply will not adversely affect the excludability for federal income tax proposes from gross income of the interest. Section 11. SALE OF BONDS AND APPROVAL OF OFFICIAL STATEMENT; FURTHER PROCEDURES. (a) The Bonds shall be sold and delivered pursuant to competitive sale subject to the provisions of Section 1 and Section 2. The Pricing Officer is hereby authorized to determine the winning bidder and execute and accept the winning bid form in which the purchaser or purchasers (collectively, the "Initial Purchaser") of the Bonds shall be designated. The Bonds shall initially be registered in the name of the Initial Purchaser as set forth in the Pricing Certificate. (b) The Pricing Officer is authorized, in connection with effecting the sale of the Bonds, to obtain from a municipal bond insurance company so designated in the winning bid form (the "Insurer") a municipal bond insurance policy (the "Insurance Policy") in support of the Bonds. To that end, should the Pricing Officer exercise such authority and commit the Issuer to obtain a municipal bond insurance policy, for so long as the Insurance Policy is in effect, the requirements of the Insurer relating to the issuance of the Insurance Policy as set forth in the Pricing Certificate are incorporated by reference into this Ordinance and made a part hereof for all purposes, notwithstanding any other provision of this Ordinance to the contrary. The Pricing Officer shall have the authority to execute any documents to effect the issuance of the Insurance Policy by the Insurer. (c) The form of Notice of Sale and Preliminary Official Statement relating to the Bonds submitted to the City Council at the meeting at which this Ordinance is adopted is hereby approved and the Pricing Officers are authorized to approve any changes to said document and to authorize its distribution by the 21 Initial Purchaser to prospective purchasers of the Bonds. The Mayor and the City Secretary are authorized and directed to execute and deliver for and on behalf of the Issuer copies of the Preliminary Official Statement and an Official Statement, prepared in connection with the offering of the Bonds by the Initial Purchaser, in final form as may be required by the Initial Purchaser, and such final Official Statement in the form and content as approved by the Pricing Officer or as manually executed by said officials shall be deemed to be approved by the City Council of the Issuer and constitute the Official Statement authorized for distribution and use by the Initial Purchaser. (d) The Mayor and Mayor Pro Tem, the City Manager and the Assistant City Manager and all other officers, employees and agents of the Issuer, and each of them, shall be and they are hereby expressly authorized, empowered and directed from time to time and at any time to do and perform all such acts and things and to execute, acknowledge and deliver in the name and under the corporate seal and on behalf of the Issuer a Paying Agent/Registrar Agreement with the Paying Agent/Registrar and all other instruments, whether or not herein mentioned, as may be necessary or desirable in order to carry out the terms and provisions of this Ordinance, the Bonds, the sale of the Bonds and the Official Statement. In case any officer whose signature shall appear on any Bond shall cease to be such officer before the delivery of such Bond, such signature shall nevertheless be valid and sufficient for all purposes the same as if such officer had remained in office until such delivery. Section 12. COMPLIANCE WITH RULE 1 Sc2-12. (a) Definitions. As used in this Section, the following terms have the meanings ascribed to such terms below: "MSRB"means the Municipal Securities Rulemaking Board. "Rule" means SEC Rule 1 Sc2-12, as amended from time to time. "SEC" means the United States Securities and Exchange Commission. (b) Annual Reports. (i) The Issuer shall provide annually to the MSRB, in the electronic format prescribed by the MSRB, within six months after the end of each fiscal year ending in or after 2010, financial information and operating data with respect to the Issuer of the general type included in the final Official Statement authorized by Section 11 of this Ordinance, being the information described in the Pricing Certificate. Any financial statements so to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit A hereto, or such other accounting principles as the Issuer may be required to employ from time to time pursuant to state law or regulation, and (2) audited, if the Issuer commissions an audit of such statements and the audit is completed within the period during which they must be provided. If the audit of such financial statements is not completed within such period, then the Issuer shall provide unaudited financial statements within such period, and audited financial statements for the applicable fiscal year to the MSRB, when and if the audit report on such statements become available. (ii) If the Issuer changes its fiscal year, it will notify the MSRB of the change (and of the date of the new fiscal year end) prior to the next date by which the Issuer otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section maybe set forth in 22 full in one or more documents or may be included by specific reference to any document available on the MSRB's Internet website or filed with the SEC. (c) Material Event Notices. The Issuer shall notify the MSRB, in the electronic format prescribed by the MSRB, in a timely manner, of any of the following events with respect to the Bonds, if such event is material within the meaning of the federal securities laws: 1. Principal and interest payment delinquencies; 2. Non-payment related defaults; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions or events affecting the tax-exempt status of the Bonds; 7. Modifications to rights of holders of the Bonds; 8. Bond calls; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the Bonds; and 1 1. Rating changes. The Issuer shall notify the MSRB, in a timely manner, of any failure by the Issuer to provide financial information or operating data in accordance with subsection (b) of this Section by the time required by such subsection. (d) Limitations, Disclaimers, and Amendments. (i) The Issuer shall be obligated to observe and perform the covenants specified in this Section for so long as, but only for so long as, the Issuer remains an "obligated person" with respect to the Bonds within the meaning of the Rule, except that the Issuer in any event will give notice of any deposit made in accordance with this Ordinance or applicable law that causes the Bonds no longer to be outstanding. (ii) The provisions of this Section are for the sole benefit of the registered owners and beneficial owners of the Bonds, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The Issuer undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the Issuer's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The Issuer does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Bonds at any future date. (iii) UNDER NO CIRCUMSTANCES SHALL THE ISSUER BE LIABLE TO THE REGISTERED OWNER OR BENEFICIAL OWNER OF ANY BOND OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE ISSUER, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. 23 (iv) No default by the Issuer in observing or performing its obligations under this Section shall comprise a breach of or default under the Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the Issuer under federal and state securities laws. (v) The provisions of this Section may be amended by the Issuer from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the Issuer, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Bonds in the primary offering of the Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such offering as well as such changed circumstances and (2) either (a) the registered owners of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with the Issuer (such as nationally recognized bond counsel) determined that such amendment will not materially impair the interest of the registered owners and beneficial owners of the Bonds. The Issuer may also amend or repeal the provisions of this continuing disclosure agreement if the SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Bonds in the primary offering of the Bonds. If the Issuer so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (b) of this Section an explanation, in narrative form, of the reason for the amendment and of the impact of any change in the type of financial information or operating data so provided. Section 13. METHOD OF AMENDMENT. The Issuer hereby reserves the right to amend this Ordinance subject to the following terms and conditions, to-wit: (a) The Issuer may from time to time, without the consent of any holder, except as otherwise required by paragraph (b) below, amend or supplement this Ordinance in order to (i) cure any ambiguity, defect or omission in this Ordinance that does not materially adversely affect the interests of the holders, (ii) grant additional rights or security for the benefit of the holders, (iii) add events of default as shall not be inconsistent with the provisions of this Ordinance and that shall not materially adversely affect the interests of the holders, (v) qualify this Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time in effect, or (iv) make such other provisions in regard to matters or questions arising under this Ordinance as shall not be inconsistent with the provisions of this Ordinance and that shall not in the opinion of nationally recognized bond counsel materially adversely affect the interests of the holders. (b) Except as provided in paragraph (a) above, the holders of a majority in principal amount of the Bonds then outstanding that are the subject of a proposed amendment shall have the right from time to time to approve any amendment hereto that may be deemed necessary or desirable by the Issuer; provided, however, that without the consent of 100% of the holders in aggregate principal amount of the then outstanding Bonds, nothing herein contained shall permit or be construed to permit amendment of the terms and conditions of this Ordinance or in any of the Bonds so as to: (1) Make any change in the maturity of any of the outstanding Bonds; 24 (2) Reduce the rate of interest borne by any of the outstanding Bonds; (3) Reduce the amount of the principal of, or redemption premium, if any, payable on any outstanding Bonds; (4) Modify the terms of payment of principal or of interest or redemption premium on outstanding Bonds or any of them or impose any condition with respect to such payment; or (5) Change the minimum percentage of the principal amount of the Bonds necessary for consent to such amendment. (c) If at any time the Issuer shall desire to amend this Ordinance under this Section, the Issuer shall send by U.S. mail to each registered owner of the affected Bonds a copy of the proposed amendment. Such notice shall briefly set forth the nature of the proposed amendment and shall state that a copy thereof is on file at the office of the Issuer for inspection by all holders of such Bonds. (d) Whenever at any time within one year from the date of mailing of such notice the Issuer shall receive an instrument or instruments executed by the holders of at least a majority in aggregate principal amount of all of the Bonds then outstanding that are required for the amendment, which instrument or instruments shall consent to and approve such amendment, the Issuer may adopt the amendment in substantially the same form. (e) Upon the adoption of any amendatory Ordinance pursuant to the provisions of this Section, this Ordinance shall be deemed to be modified and amended in accordance with such amendatory Ordinance, and the respective rights, duties, and obligations of the Issuer and all holders of such affected Bonds shall thereafter be determined, exercised, and enforced, subject in all respects to such amendment. Any consent given by the holder of a Bond pursuant to the provisions of this Section shall be irrevocable for a period of six months from the date of such consent, and shall be conclusive and binding upon all future holders of the same Bond during such period. Such consent may be revoked at any time after six months from the date of such consent by the holder who gave such consent, or by a successor in title, by filing notice with the Issuer, but such revocation shall not be effective if the holders of a majority in aggregate principal amount of the affected Bonds then outstanding, have, prior to the attempted revocation, consented to and approved the amendment. For the purposes of establishing ownership of the Bonds, the Issuer shall rely solely upon the registration of the ownership of such Bonds on the registration books kept by the Paying Agent/Registrar. Section 14. DEFAULT AND REMEDIES. (a) Events of Default. Each of the following occurrences or events for the purpose of this Ordinance is hereby declared to be an Event of Default: (i) the failure to make payment of the principal of or interest on any of the Bonds when the same becomes due and payable; or (ii) default in the performance or observance of any other covenant, agreement or obligation of the Issuer, the failure to perform which materially, adversely affects the rights of the Registered Owners of the Bonds, including, but not limited to, their prospect or ability to be repaid 25 in accordance with this Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by any Registered Owner to the Issuer. (b) Remedies for Default. (i) Upon the happening of any Event of Default, then and in every case, any Registered Owner or an authorized representative thereof, including, but not limited to, a trustee or trustees therefor, may proceed against the Issuer for the purpose of protecting and enforcing the rights of the Registered Owners under this Ordinance, by mandamus or other suit, action or special proceeding in equity or at law, in any court of competent jurisdiction, for any relief permitted by law, including the specific performance of any covenant or agreement contained herein, or thereby to enjoin any act or thing that may be unlawful or in violation of any right of the Registered Owners hereunder or any combination of such remedies. (ii) It is provided that all such proceedings shall be instituted and maintained for the equal benefit of all Registered Owners of Bonds then outstanding. (c) Remedies Not Exclusive. (i) No remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or under the Bonds or now or hereafter existing at law or in equity; provided, however, that notwithstanding any other provision of this Ordinance, the right to accelerate the debt evidenced by the Bonds shall not be available as a remedy under this Ordinance. (ii) The exercise of any remedy herein conferred or reserved shall not be deemed a waiver of any other available remedy. (iii) By accepting the delivery of a Bond authorized under this Ordinance, such Registered Owner agrees that the certifications required to effectuate any covenants or representations contained in this Ordinance do not and shall never constitute or give rise to a personal or pecuniary liability or charge against the officers, employees or trustees of the Issuer or the Board of Trustees. Section 15. NOTICE OF PAYMENT OF AGREEMENT. The Pricing Officer is hereby authorized and directed to provide any necessary notices to TMPA that the Issuer is providing funds to pay, pursuant to the Power Sales Agreement and the Settlement Agreement, the amount necessary to pay the Refunded Obligations in full and requesting TMPA to take such actions as are necessary to cause the redemption of the TMPA Debt, including application of the amounts in the funds securing payment of the TMPA Refunded Bonds and the TMPA Refunded Commercial Paper Notes to pay the redemption price of said obligations. The Mayor, City Manager or Assistant City Manager is hereby authorized and directed to execute and deliver such certificates or other instruments or agreements necessary to provide for the redemption, payment and defeasance of the Refunded Obligations and the TMPA Debt. Section 16. DISPOSITION OF FUNDS. On the delivery date of the Bonds, proceeds of the Bonds in an amount which, together with other legally available funds, will be sufficient to pay in full the Refunded Obligations, shall be paid to TMPA for deposit into the escrow fund established in the Escrow Agreement for the TMPA Refunded Bonds and for deposit with the paying agent for the TMPA Refunded Commercial Paper Notes. The remaining proceeds of the Bonds shall be used to pay costs of issuance, with any remaining funds to be deposited into the Interest and Sinking Fund. 26 Section 17. APPROPRIATION. To pay the debt service coming due on the Bonds, if any (as determined by the Pricing Certificate) prior to receipt of the taxes levied to pay such debt service, there is hereby appropriated from current funds on hand, which are hereby certified to be on hand and available for such purpose, an amount sufficient to pay such debt service, and such amount shall be used for no other purpose. Section 18. SEVERABILITY. If any section, article, paragraph, sentence, clause, phrase or word in this Ordinance, or application thereof to any persons or circumstances is held invalid or unconstitutional by a court of competent jurisdiction, such holding shall not affect the validity of the remaining portion of this Ordinance, despite such invalidity, which remaining portions shall remain in full force and effect. Section 19. EFFECTIVE DATE. In accordance with the provisions of V.T.C.A., Government Code, Section 1201.028, this Ordinance shall be effective immediately upon its adoption by the City Council. [Execution Page Follows] 27 PAED, ~PPR~~ED A~]~D EFFE~TIE this Februar~r 1 ~ Mark A. Burroughs, Mayor ATT~T: Jennifer afters, ~it~ ecretar~ APPROVED A TO I~EC~AL F~~: Anita ~urges~, pity Attorney B' Y~ a ~~~~~~sw~~~~~~~~~~~r~~~~~~~~~~~~~~~~ SCHEDULE I Schedule of Refunded Obligations Contractual obligations of the City of Denton (the "Issuer") under the Power Sales Contract dated September 1, 1976, as amended (the "Power Sales Agreement"), between the Issuer and the Texas Municipal Power Agency ("TMPA"), relating to the payment of the Issuer's Contract Percentage of $98,500,000 in principal amount of TMPA's outstanding "Texas Municipal Power Agency Commercial Paper Notes, Series 2005" (the "TMPA Refunded Commercial Paper Notes") with such Contract Percentage being $20,980,500. Contractual obligations of the Issuer under the Power Sales Agreement relating to the payment of the Issuer's Contract Percentage of $195,655,000 in principal amount of TMPA's outstanding "Texas Municipal Power Agency Subordinate Lien Revenue Refunding Bonds, Series 2003," "Texas Municipal Power Agency Subordinate Lien Revenue Refunding Bonds, Series 2004" and "Texas Municipal Power Agency Subordinate Lien Revenue Refunding Bonds, Series 2004-A" (collectively, the "TMPA Refunded Bonds") with such Contract Percentage being $41,674,515. Ratings: Moody's: Dated February 2010 S&P: " (see "Other Information - NEW ISSUE - Book-Entry-Only Ratings" herein) In the opinion of Bond Counsel, interest on the Bonds will be excludable from gross income for federal income tax purposes under statutes, regulations, published rulings and court decisions existing on the date thereof, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax consequences. THE BONDS WILL NOT BE DESIGNATED AS "QUALIFIED TA~X-EXEMPT OBLIGATIONS" FOR FINANCIAL INSTITiJTIONS $59,480,000* CITY OF DENTON, TEXAS ~ ~ - (Denton County) 1-)11' N T0' COMBINATION TAX AND REVENIIE REFIINDING BONDS, SERIES 2010 Dated Date: March 1, 2010 Due: February 15, as shown below PAYMENT TERMS Interest on the $59,480,000* Citv of Denton, Texas Combination Tax and Revenue Refunding Bonds, Series 2010 (the "Bonds") will accrue from the Delivery Date (defined below), and will be payable February 15 and August 15 of each year commencing February 15, 2011, and will be calculated on the basis of a 360-day year consisting of twelve 30-dav months. The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company ("DTC") pursuant to the Book-Entrv-Only Svstem described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof within a maturity. No physical delivery of the Bonds will be made to the beneficial owners thereof Principal of, premium, if anv, and interest on the Bonds will be payable by the Paving Agent/ Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See "The Bonds - Book-Entrv-Only Svstem" herein. The initial Paving Agent/ Registrar is The Bank of New York Mellon Trust Company, N. a., Dallas, Texas (see "The Bonds - Paving Agent/ Registrar"). AUTHORITY FOR ISSUANCE The Bonds are issued pursuant to the Constitution and general laws of the State of Texas, (the "State") including particularly Texas Government Code, Chapter 1207, as amended, and are direct obligations of the City of Denton, Texas (the "City"), payable from a combination of (i) the levv and collection of a direct and continuing annual ad valorem tax, within the limits prescribed by law, on all taxable property within the Citv, and (ii) a pledge of surplus net revenues of the Citv's combined water, sewer and electric light and power system (the "Utility System"), as provided in the ordinance authorizing the Bonds (the "Ordinance") (see "The Bonds - Authority for Issuance"). PURPOSE Proceeds from the sale of the Bonds will be used (a) to refinance a portion of the Citv's contractual obligations to the Texas Municipal Power Agency (the "TMPA") under a power sales contract with the TMPA, specifically in respect to the refunding of $20,980,500 of outstanding TMPA commercial paper and $41,674,515 of outstanding TMPA bonds, and (b) to pay the costs of issuing the Bonds. MATURITY SCHEDULE* CUSIP Prefix: 248866 Principal Interest CUSIP Principal Interest CU SIP Amount MaturitsT Rate Yield Suffix Amount Maturity Rate Yield Suffix $2,055,000 2011 $4,060.000 2019 3,215,000 2012 4245,000 2020 3,280,000 2013 4,450,000 2021 3,355,000 2014 4,680,000 2022 3,450,000 2015 4,920,000 2023 3,565,000 2016 5,175,000 2024 3,710,000 2017 5,440,000 2025 3,880,000 2018 (1) CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by Standard and Poor's CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in anv wav as a substitute for the CUSIP Services. CUSIP numbers are provided for convenience of reference only. The Citv, the Financial Advisor and the Initial Purchasers take no responsibility for the accuracy of such numbers. REDEMPTION The City reserves the right, at its option, to redeem Bonds having stated maturities on and after February 15, 2020, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on Februarv 15, 2019, or anv date thereafter, at the par value thereof plus accrued interest to the date of redemption. LEGALITY The Bonds are offered for deliverv when, as and if issued and received by the Initial Purchaser and subject to the approving opinion of the Attorney General of Texas and the opinion of McCall, Parkhurst & Horton L.L.P., Bond Counsel, Dallas, Texas (see Appendix C, "Form of Bond Counsel's Opinion"). DELIVERY It is expected that the Bonds will be available for delivery through The Depository Trust Company on March 30, 2010 (the "Delivery Date"). BIDS DUE WEDNESDAY, MARCH 1, 2010, AT 11:00 AM, CST** * Preliminary, subject to change. See the Notice of Sale. See Place and Time of Bid Opening in the Notice of Sale. This Official Statement, which includes the cover page, Schedule and the Appendices heretq does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction to any person to whom it is unlawful to make such offer, solicitation, or sale. No dealer, broker, salesperson, or other person has been authorized to give information or to make any representation other than those contained in this Official Statement, and, if given or made, such other information or representations must not be relied upon. For purposes of compliance with Rule I Sc2-12 of the Securities and Exchange Commission (the "Rule'), this document constitutes an Official Statement of the City with respect to the Bonds that has been "deemed final" by the City as of its date except for the omission of no more than the information permitted by the Rule. The information set forth herein has been obtained from the City and other sources believed to be reliable, but such information is not guaranteed as to accuracy or completeness and is not to be construed as the representation, promise, or guarantee of the Financial Advisor. This Official Statement contains, in part, estimates and matters of opinion which are not intended as statements of fact, and no representation is made as to the correctness of such estimates and opinions, or that they will be realized. Any information and expressions of opinion herein contained are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or other matters described herein since the date hereof. See "Continuing Disclosure of Information" for a description of the City's undertaking to provide certain information on a continuing basis. Neither the City nor its Financial Advisor make any representation as to the accuracy, completeness, or adequacy of the information supplied by The Depository Trust Company for use in this Official Statement. The cover page contains certain information for general reference only and is not intended as a summary of this offering. Investors should read the entire Official Statement, including all schedules and appendices hereto, to obtain information essential to making an informed investment decision. The agreements of the City and others related to the Bonds are contained solely in the contracts described herein. Neither this Official Statement nor any other statement made in connection with the offer or sale of the Bonds is to be construed as constituting an agreement with the purchaser of the Bonds. INVESTORS SHOULD READ THE ENTIRE OFFICIAL STATEMENT, INCLUDING ALL SCHEDULES AND APPENDICES ATTACHED HERETO, TO OBTAIN INFORMATION ESSENTIAL TO MAKING ANINFORMED INVESTMENT DECISION. This Official Statement contains "Forward-Looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, and achievements to be d fferent from future results, performance, and achievements expressed or implied by such forward-looking statements. Investors are cautioned that the actual results could differ materially from those set forth in the forward-looking statements. The Bonds are exempt from registration with the Securities and Exchange Commission and consequently have not been registered therewith. The registration, qual f cation, or exemption of the Bonds in accordance with applicable securities law provisions of the jurisdiction in which the Bonds have been registered, qual f ed or exempted should not be regarded as a recommendation thereof. TABLE OF CONTENTS PRELIMINARY OFFICIAL STATEMENT SUMMARY 3 THE WASTEWATER SYSTEM ..............................................................42 TABLE I9 -WASTEWATER RATES 42 CITY OFFICIALS, STAFF AND CONSULTANTS 5 ELECTED OFFICIALS S WATER AND WASTEWATER RATE MANAGEMENT 43 SELECTED ADMINISTRATNE STAFF 5 CONSULTANTS AND ADVISORS 5 UTILITY SYSTEM DEBT INFORMATION..........................................44 TABLE 2O -UTILITY SYSTEM DEBT SERVICE REQUIREMENTS 44 INTRODUCTION 7 UTILITY SYSTEM FINANCIAL INFORMATION 45 PLAN OF FINANCING 7 TABLE 21-COMPARABLE CALCULATION OF UTILITY SYSTEM NET REVENUES AVAILABLE FOR DEBT SERVICE 45 THE BONDS 9 TABLE 22 -COVERAGE AND FUND BALANCES 46 TAX INFORMATION ................................................................................14 INVESTMENTS................................................................................ ..........47 TABLE I -VALUATION, EXEMPTIONS AND GENERAL OBLIGATION TABLE 23-CURRENT INVESTMENTS ...................................................48 DEBT .....................................................................................17 TABLE 2 -TAXABLE ASSESSED VALUATIONS BY CATEGORY ...........19 TAX MATTERS 49 TABLE 3 -VALUATION AND GENERAL OBLIGATION DEBT HISTORY 2O TABLE 4 -TAX RATE, LEVY AND COLLECTION HISTORY 2O OTHER INFORMATION.......................................................................... 50 TABLE 5 -TEN LARGEST TAXPAYERS 2O RATINGS............................................................................................. 50 TABLE 6 -ESTIMATED OVERLAPPING TAX DEBT 2I LITIGATION 50 REGISTRATION AND QUALIFICATION OF BONDS FOR SALE 51 GENERAL OBLIGATION DEBT INFORMATION 22 LEGAL INVESTMENTS AND ELIGIBILITY To SECURE PUBLIC FUNDS IN TABLE 7 -GENERAL OBLIGATION DEBT SERVICE REQUIREMENTS... 22 TEXAS S I TABLE 8 -INTEREST AND SINKING FUND BUDGET PROJECTION 23 LEGAL OPINIONS 51 TABLE 9 -COMPUTATION OF SELF-SUPPORTING DEBT 23 CONTINUING DISCLOSURE OF INFORMATION...................................... 51 TABLE IO -AUTHORIZED BUT UNISSUED GENERAL OBLIGATION FINANCIAL ADVISOR 53 BONDS 23 AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION 53 TABLE I I -OTHER OBLIGATIONS 23 INITIAL PURCHASER 53 FORWARD-LOOKING STATEMENTS DISCLAIMER 53 GENERAL OBLIGATION FINANCIAL INFORMATION 25 CERTIFICATION of THE OFFICIAL STATEMENT 54 TABLE I2 - CHANGES IN NET ASSETS 25 TABLE I2A -GENERAL FUND REVENUES AND APPENDICES EXPENDITURE HISTORY 26 GENERAL INFORMATION REGARDING THE CITY A TABLE I3 -MUNICIPAL SALES TAX HISTORY 27 EXCERPTS FROM THE COMPREHENSIVE ANNUAL FINANCIAL REPORT B MANAGEMENT OF THE UTILITY SYSTEM .....................................28 FORM OF BOND COUNSEL'S OPINION................................................. C DESCRIPTION OF SENATE BILL 7 AND THE TEXAS MUNICIPAL THE ELECTRIC SYSTEM 29 POWER AGENCY........................................................................ D TABLE I4 -HISTORICAL ELECTRIC SYSTEM OPERATING AND FINANCIAL DATA 30 The cover page hereof, this page, Schedules, the appendices included herein TABLE 15-CURRENT ELECTRIC RATE SCHEDULES 31 and any addenda, supplement or amendment hereto, are part of the Preliminary OfFicial Statement. THE WATER SYSTEM .............................................................................40 TABLE I6 -WATER USAGE 4I TABLE I7 -TOP TEN WATER CUSTOMERS 4I TABLE 18 -WATER RATES 41 2 PRELIMINARY OFFICIAL STATEMENT SUMMARY This summary is subject in all respects to the more complete information and definitions contained or incorporated in this Preliminary Official Statement. The offering of the Bonds to potential investors is made only by means of this entire Preliminary Official Statement. No person is authorized to detach this summary from this Preliminary Official Statement or to otherwise use it without the entire Preliminary Official Statement. THE CITY The City of Denton (the "City") is a political subdivision and municipal corporation of the State, located in Denton County, Texas. The City covers approximately 88.1 square miles (see "Introduction - Description of the City"). TxE BONDS The Bonds are issued as $59,480,000 Combination Tax and Revenue Refunding Bonds, Series 2010. The Bonds are issued as serial bonds maturing February 15, 2011 through February 15, 2025 (see "The Bonds - Description of the Bonds"). PAYMENT of INTEREST Interest on the Bonds accrues from the Delivery Date, and is payable February 15, 2011, and each August 15 and February 15 thereafter until maturity (see "The Bonds -Description of the Bonds"). AUTxORITY FoR ISSUANCE.......... The Bonds are issued pursuant to the Constitution and general laws of the State, including particularly Chapter 1207, Texas Government Code, as amended, and the ordinance (the "Bond Ordinance") adopted by the City Council (the "Council") of the City in which the Council delegated to each of the City Manager and the Assistant City Manager authority to complete the sale of the Bonds. The terms of the sale will be included in a "Pricing Certificate," which will complete the sale of the Bonds (the Bond Ordinance and the Pricing Certificate are jointly referred to as the "Ordinance") (see "The Bonds -Authority for Issuance"). SECURITY FoR TxE BONDS The Bonds constitute direct obligations of the City, payable from a combination of (i) the levy and collection of a direct and continuing annual ad valorem tax, within the limits prescribed by law, on all taxable property within the City, and (ii) a pledge of surplus net revenues of the Utility System (see "The Bonds -Security and Source of Payment"). REDEMPTION The City reserves the right, at its option, to redeem Bonds having stated maturities on and after February 15, 2020, in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2019, or any date thereafter, at the par value thereof plus accrued interest to the date of redemption see "The Bonds -Optional Redemption"). TAx EXEMPTION In the opinion of Bond Counsel, the interest on the Bonds will be excludable from gross income for federal income tax purposes under existing law, subject to the matters described under the caption "Tax Matters" herein, including the alternative minimum tax consequences. UsE of PROCEEDS Proceeds from the sale of the Bonds will be used (a) to refinance a portion of the City's contractual obligations to the Texas Municipal Power Agency (the "TMPA") under a power sales contract with the TMPA, specifically in respect to the refunding of $20,980,500 of outstanding TMPA commercial paper and $41,674,515 of outstanding TMPA bonds, and (b) to pay the costs of issuing the Bonds. RATINGS The Bonds and the presently outstanding general obligation debt of the City are rated " " by Moody's Investors Service, Inc. ("Moody's") and " " by Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. ("S&P") (see "Other Information -Ratings"). BOOK-ENTRY-ONLY SYSTEM...... The definitive Bonds will be initially registered and delivered only to Cede & Co., the nominee of DTC pursuant to the Book-Entry-Only System described herein. Beneficial ownership of the Bonds may be acquired in denominations of $5,000 or integral multiples thereof within a maturity. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying Agent/Registrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds (see "The Bonds -Book-Entry-Only System"). PAYMENT RECORD The City has never defaulted on the payment of its tax-supported indebtedness. ~ Preliminary, subj ect to change 3 SELECTED FINANCIAL INFORMATION Net Funded Ratio Funded Fiscal Per Capita Tax Per Capita Tax Debt to Year Estimated Taxable Taxable Debt Funded Taxable % of Ended City Assessed Assessed at End Tax Assessed Total Tax 9/30 Population (1) Valuation Valuation of Year (4) Debt Valuation Collections 2006 108,381 $4,789,376,811 $ 44,190 $101,054,142 $ 932 2.11% 100.22% 2007 113,800 5,441,228,909 47,814 119,266,729 1,048 2.19% 100.62% 2008 115,506 6,089,499,775 52,720 129,439,594 1,121 2.13% 101.08% 2009 118,904 6,291,359,112 52,911 122,835,000 1,033 1.95% 99.18% 2010 121,374 6,327,909,022 (3) 52,136 113,537,600 (5) 935 1.79%~5~ 25.78% (6) (1) Source: City Officials. (2) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. (3) Source: Denton Central Appraisal District as of July 18, 2009. (4) Excludes self supported general obligation debt. (5) Projected, excludes the Bonds. Preliminary, subject to change. (6) Collections for part year only, through December 31, 2009. For additional information regarding the City, please contact: Bryan Langley Laura Alexander Director of Finance First Southwest Company City of Denton 777 Main Street, Suite 1200 215 E. McKinney Street or Fort Worth, Texas 76102 Denton, Texas 76201 (817) 332-9710 (940) 349-8224 4 CITY OFFICIALS, STAFF AND CONSULTANTS ELECTED OFFICIALS Term City Council Expires Mark Burroughs May, 2010 Mayor Pete Kamp May, 2010 Mayor Pro Tem, At Large Place 5 Joe Mulroy May, 2010 Councilmember, At Large Place 6 Charlye Heggins May, 2011 Councilmember, District 1 Dalton Gregory May, 2011 Councilmember, District 2 Jim Engelbrecht May, 2011 Councilmember, District 3 Chris Watts May, 2011 Councilmember, District 4 SELECTED ADMINISTRATIVE STAFF Name Position George C. Campbell City Manager Howard Martin Assistant City Manager Jon Fortune Assistant City Manager Fred Greene Assi stant C ity M anager Bryan Langley Director of Finance Jennifer K. Walters City Secretary Anita Burgess City Attorney CONSULTANTS AND ADVISORS Auditors Weaver, LLP Dallas, Texas Bond Counsel McCall, Parkhurst & Horton L.L.P. Dallas, Texas Financial Advisor First Southwest Company Fort Worth, Texas 5 THIS PAGE LEFT BLANK INTENTIONALLY 6 PRELIMINARY OFFICIAL STATEMENT RELATING TO ~59,480,000* CITY OF DENTON, TEXAS COMBINATION TAX AND REVENUE REFUNDING BONDS, SERIES 2010 INTRODUCTION This Preliminary Official Statement, which includes the Schedule and Appendices hereto, provides certain information regarding the issuance of $59,480,000 City of Denton, Texas, Combination Tax and Revenue Refunding Bonds, Series 2010 (the "Bonds"). Capitalized terms used in this Preliminary Official Statement have the same meanings assigned to such terms in the Bond Ordinance except as otherwise indicated herein. In the Ordinance adopted on February 16, 2010, as permitted by the provisions of Chapter 1207, Texas Government Code, as amended (the "Act"), the City Council delegated the authority to certain City officials to establish the terms and details of the Bonds and to effect the sale of the Bonds pursuant to the Pricing Certificate. There follows in this Preliminary Official Statement descriptions of the Bonds and certain information regarding the City and its finances. All descriptions of documents contained herein are only summaries and are qualified in their entirety by reference to each such document. Copies of such documents may be obtained from the City's Financial Advisor, First Southwest Company, Fort Worth, Texas. DESCRIPTION of TxE CITY ...The City of Denton, Texas (the "City") is a political subdivision located in Denton County operating as a home-rule city under the laws of the State of Texas and a charter approved by the voters in 1959. The City operates under the CounciUManager form of government where the Mayor and six Councilmembers are elected for staggered two-year terms. The City Council formulates operating policy for the City while the City Manager is the chief administrative officer. The City is approximately 88.1 square miles in area. PLAN OF FINANCING The Texas Municipal Power Agency ("TMPA") is a joint powers agency and a political subdivision of the State of Texas and functions solely to generate and transmit electric power to its member cities (the "Member Cities"). The City is a Member City of TMPA and, along with each other Member City, appoints two members to the eight member board of directors of TMPA (the "TMPA Board"). The City and the three other TMPA Member Cities (City of Bryan, Texas, City of Garland, Texas, and City of Greenville, Texas) have entered into identical Power Sales Contracts dated September 1, 1976, as amended (the "TMPA Power Sales Agreement"), under which TMPA is obligated to sell electric energy to the Member Cities, and each Member City is unconditionally obligated to pay a percentage of TMPA's Annual System Costs (as defined in the TMPA Power Sales Agreement), without regard to whether energy is delivered by TMPA to, or used by, a Member City. The Annual System Costs include the payment of the TMPA Debt Service Requirements (as defined in the TMPA Power Sales Agreement). The contractual percentages of each Member City to TMPA are currently as follows: City of Bryan, Texas: 21.7% City of Denton, Texas: 21.3% City of Garland, Texas: 47.0% City of Greenville, Texas: 10.0% See "THE ELECTRIC SYSTEM" and Appendix D - "Description of Senate Bill 7 and the Texas Municipal Power Agency" for more information regarding the TMPA Power Sales Agreement. TMPA and each Member City has executed a Global Compromise and Settlement Agreement, effective as of December 17, 2009 (the "Settlement Agreement"), pertaining to the settlement of various cases, administrative proceedings, and other related matters and disputes among TMPA and the Member Cities (see "OTHER INFORMATION -Litigation" for more information regarding the Settlement Agreement). In anticipation of the execution of the Settlement Agreement, on December 10, 2009, the TMPA Board adopted two resolutions under which TMPA has committed to each Member City that it will apply certain funds received from the Member Cities for two purposes. First, in accordance to TMPA resolution 2009-12-4 (the "Scrubber Resolution"), TMPA has committed to apply certain funds received from the Member Cities to retire $98,500,000 of its Commercial Paper Notes, Series 2005 (the "Refunded TMPA Commercial Paper"), which will create sufficient capacity within the TMPA commercial paper program to fund the capital budget of TMPA for a scrubber refurbishment project (the "Scrubber Project") to control emissions of sulphur dioxide and mercury at the Agency's Gibbons Creek Steam Electric Station. Second, in accordance with TMPA resolution 2009-12-5 (the "Refunding Resolution"), TMPA has committed to apply certain funds received from the Member Cities to redeem an aggregate of $195,655,000 of TMPA's Subordinate Lien Revenue Refunding Bonds, Series 2003, Subordinate Lien Revenue Refunding Bonds, Series 2004 and Subordinate Lien Revenue Refunding Bonds, Series 2004-A, all of which bonds are currently callable at a redemption price of par plus accrued interest (the "TMPA Refunded Bonds"). The Refunding Resolution provides that the TMPA Refunded Bonds represent debt of TMPA associated with TMPA ~ Preliminary, subj ect to change. 7 System (as defined in the TMPA Power Sales Agreement) improvements, other than debt incurred for the construction of electric transmission facilities. The Scrubber Resolution and the Refunding Resolution, as well as the Settlement Agreement, respectively provide that each Member City will provide funds to TMPA in an amount equal to its TMPA Power Sale Contract percentage of (i) the $98,500,000 in aggregate principal amount of the TMPA Refunded Commercial Paper and (ii) the $195,655,000 in aggregate principal amount of the TMPA Refunded Bonds. The City's share of the TMPA Refunded Commercial Paper is $20,980,500, and its share of the TMPA Refunded Bonds is $41,674,515. The Bonds are being issued for the purpose of refinancing a portion of the City's contractual obligations to TMPA under the TMPA Power Sales Agreement, specifically in respect to the TMPA Refunded Commercial Paper and the TMPA Refunded Bonds. The proceeds of the Bonds will be used to satisfy the City's obligation with respect thereto, and to pay costs of issuing the Bonds. TMPA has agreed to fund the accrued interest coming due on the TMPA Refunded Bonds on the redemption date therefor, and the accrued but unpaid interest on the TMPA Refunded Commercial Paper that will be retired with funds provided by the Member Cities. Each Member City has committed to issue refunding bonds on March 30, 2010 (the "Closing Date") in an amount sufficient to meet their respective payment obligations with respect to the Scrubber Project and the TMPA Refunded Bonds. In accordance with the Refunding Resolution, TMPA has entered into an escrow agreement (the "Escrow Agreement") with U.S. Bank National Association, the paying agent/registrar for the TMPA Refunded Bonds (the "Escrow Agent"). In the Escrow Agreement, TMPA has instructed the Escrow Agent to provide irrevocable notices to the holders of the TMPA Refunded Bonds that such bonds will be redeemed on May 6, 2010, at a redemption price of the principal amount thereof and accrued but unpaid interest to the date of redemption. The Escrow Agreement provides that amounts deposited into the escrow fund created by the Escrow Agreement (the "Escrow Fund") will be used to purchase direct obligations of the United States of America (the "Federal Securities"). Under the Escrow Agreement, the Escrow Fund is irrevocably pledged to the payment of the principal of and interest on the TMPA Refunded Bonds. The Escrow Agent has certified that the amounts to be deposited with it by the Member Cities and TMPA on the Closing Date will be sufficient, without regard to investment earnings, to pay the redemption price of the TMPA Refunded Bonds on the date fixed for the redemption thereof. By the deposit of the Federal Securities and cash, if necessary, with the Escrow Agent pursuant to the Escrow Agreement, TMPA will have effected the defeasance of the Refunded TMPA Bonds in accordance with applicable State law. In accordance with the Scrubber Resolution, TMPA has instructed The Bank of New York Mellon Trust Company, N.A., the paying and issuing agent for its tax-exempt commercial paper program (the "CP Paying Agent"), to accept on the Closing Date an amount from each Member City equal to its respective share of the principal amount of the TMPA Refunded Commercial Paper, for deposit into the note payment fund related to such commercial paper. TMPA has arranged for the TMPA Refunded Commercial Paper to mature on April 1, 2010. Upon the closing of the Member City bond issues, including the Bonds, each Member City will wire transfer its share of the TMPA Commercial Paper to the CP Paying Agent for direct deposit to the note payment account established by TMPA with the CP Paying Agent under the TMPA resolution establishing its tax-exempt commercial paper program. The CP Paying Agent will apply the Member City funds and an amount received from TMPA for payment of interest on the TMPA Refunded Commercial Paper to pay the maturing TMPA Commercial Paper on April 1, 2010. In the event that a Member City would fail to deliver its proportionate amount of the TMPA Refunded Commercial Paper or the TMPA Refunded Bonds, that proportionate amount would remain outstanding and, pursuant to the TMPA Power Sales Agreement, all Member Cities would continue to be obligated to pay its proportionate share of the TMPA Debt Service Requirements for such debt. Such a failure by a Member City would, however, be a breach of the Settlement Agreement, and the TMPA, the City and the other non-breaching Member Cities would presumably pursue remedies for breach of the Settlement Agreement. ESTIMATED SOURCES ~ USES of PROCEEDS ...The proceeds from the sale of the Bonds will be applied as follows: Sources ofFunds ParAmount of Bonds $ 59,480,000.00 Minimum Cash Premium Bid 3,417,126.00 Total Sources of Funds $ 62,897,126.00 Uses of Funds Deposit to TMPA Escrow Fund $ 41,674,515.00 Deposit to TMPA Commercial Paper Note Payment Fund 20,980,500.00 Cost ofIssuance 242,111.00 Total Uses of Funds $ 62,897,126.00 ~ Preliminary, subj ect to change. 8 THE BONDS DESCRIPTION OF THE BONDS ...The Bonds are dated March 1, 2010 (the "Dated Date"), and mature on February 15 in each of the years and in the amounts shown on the cover page hereof. Interest will accrue from the Delivery Date, will be computed on the basis of a 360-day year of twelve 30-day months, and will be payable on August 15 and February 15 of each year, commencing February 15, 2011. The definitive Bonds will be issued only in fully registered form in any integral multiple of $5,000 for any one maturity and will be initially registered and delivered only to Cede & Co., the nominee of The Depository Trust Company, New York, New York ("DTC") pursuant to the Book-Entry-Only System described herein. No physical delivery of the Bonds will be made to the beneficial owners thereof. Principal of, premium, if any, and interest on the Bonds will be payable by the Paying AgentlRegistrar to Cede & Co., which will make distribution of the amounts so paid to the participating members of DTC for subsequent payment to the beneficial owners of the Bonds. See "The Bonds -Book-Entry- Only System" herein. AUTHORITY FoR ISSUANCE ...The Bonds are being issued pursuant to the Constitution and general laws of the State of Texas, particularly Chapter 1207, Texas Government Code, as amended, and the Ordinance. SECURITY AND SOURCE OF PAYMENT ...The Bonds constitute direct obligations of the City, payable from the levy and collection of a direct and continuing annual ad valorem tax, within the limits prescribed by law, on all taxable property located within the City, as provided in the Ordinance. Additionally, the Bonds are payable from and secured by a pledge of the net revenues of the City's Utility System remaining after payment of all operation and maintenance expenses thereof, and all debt service, reserve and other requirements in connection with all of the Issuer's revenue obligations (now or hereafter outstanding) that are payable from all or part of said revenues, all as provided in the Ordinance. TAx RAH LIMITATION ...All taxable property within the City is subject to the assessment, levy and collection by the City of a continuing, direct annual ad valorem tax sufficient to provide for the payment of principal of and interest on all ad valorem tax debt, including the Bonds, within the limits prescribed by law. Article XI, Section 5, of the Texas Constitution is applicable to the City, and limits its maximum ad valorem tax rate to $2.50 per $100 Taxable Assessed Valuation for all City purposes. The Home Rule Charter of the City adopts the constitutionally authorized maximum tax rate of $2.50 per $100 Taxable Assessed Valuation. Administratively, the Attorney General of the State of Texas will permit allocation of $1.50 of the $2.50 maximum tax rate for all general obligation debt, based on 90% tax collection factor. OPTIONAIJ REDEMPTION ...The City reserves the right, at its option, to redeem the Bonds having stated maturities on and after February 15, 2020 in whole or in part in principal amounts of $5,000 or any integral multiple thereof, on February 15, 2019 or any date thereafter, at the par value thereof plus accrued interest to the date of redemption. If less than all of the Bonds are to be redeemed, the City may select the maturities of Bonds to be redeemed. If less than all the Bonds of any maturity are to be redeemed, the Paying AgentlRegistrar (or DTC while the Bonds are in Book-Entry-Only form) shall determine by lot the Bonds, or portions thereof, within such maturity to be redeemed. If a Bond (or any portion of the principal sum thereon shall have been called for redemption and notice of such redemption shall have been given, such Bond (or the principal amount thereof to be redeemed) shall become due and payable on such redemption date and interest thereon shall cease to accrue from and after the redemption date, provided funds for the payment of the redemption price and accrued interest thereon are held by the Paying Agent/Registrar on the redemption date. With respect to any optional redemption of the Bonds unless certain prerequisites to such redemption required by the respective Ordinance have been met and money sufficient to pay the principal of and premium, if any, and interest on the Bonds to be redeemed will have been received by the Paying AgentlRegistrar prior to the giving of such notice of redemption, such notice will state that said redemption may, at the option of the City, be conditional upon the satisfaction of such prerequisites and receipt of such money by the Paying AgentlRegistrar on or prior to the date fixed for such redemption or upon any prerequisite set forth in such notice of redemption. If a conditional notice of redemption is given and such prerequisites to the redemption are not fulfilled, such notice will be of no force and effect, the City will not redeem such Bonds and the Paying AgentlRegistrar will give notice in the manner in which the notice of redemption was given, to the effect that the Bonds have not been redeemed. The Paying AgentlRegistrar and the City, so long as a Book-Entry-Only System is used for the Bonds, will send any notice of redemption (with respect to the Bonds), notice of proposed amendment to the Ordinance or other notices only to DTC. Any failure by DTC to advise any DTC participant, or of any DTC participant or indirect participant to notify the beneficial owner, shall not affect the validity of the redemption of the Bonds called for redemption or any other action premised on any such notice. Redemption of portions of the Bonds by the City will reduce the outstanding principal amount of such Bonds held by DTC. In such event, DTC may implement, through its Book-Entry-Only System, a redemption of such Bonds held for the account of DTC participants in accordance with its rules or other agreements with DTC participants and then DTC participants and indirect participants may implement a redemption of such Bonds from the beneficial owners. Any such selection of Bonds to be redeemed will not be governed by the Ordinance and will not be conducted by the City or the Paying AgentlRegistrar. Neither the City nor the Paying AgentlRegistrar will have any responsibility to DTC participants, indirect participants or the persons for whom DTC participants act as nominees, with respect to the payments on the Bonds or the providing of notice to DTC participants, indirect participants, or beneficial owners of the selection of portions of the Bonds for redemption (see "THE BONDS -Book-Entry-Only System"). 9 NOTICE of REDEMPTION ...Not less than 30 days prior to a redemption date for the Bonds, the City shall cause a notice of redemption to be sent by United States mail, first class, postage prepaid, to the registered owners of the Bonds to be redeemed, in whole or in part, at the address of the registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the business day next preceding the date of mailing such notice. ANY NOTICE SO MAILED SHALL BE CONCLUSIVELY PRESUMED TO HAVE BEEN DULY GIVEN WHETHER OR NOT THE REGISTERED OWNER RECEIVES SUCH NOTICE. IF A BOND (OR ANY PORTION OF ITS PRINCIPAL SUM) SHALL HAVE BEEN DULY CALLED FOR REDEMPTION AND NOTICE OF SUCH REDEMPTION DULY GIVEN, THEN UPON THE REDEMPTION DATE SUCH BOND (OR THE PORTION OF ITS PRINCIPAL SUM TO BE REDEEMED) SHALL BECOME DUE AND PAYABLE, AND, IF MONIES FOR THE PAYMENT OF THE REDEMPTION PRICE ARE HELD FOR THE PURPOSE OF SUCH PAYMENT BY THE PAYING AGENT/REGISTRAR AND ALL OTHER CONDITIONS TO REDEMPTION ARE SATISFIED, INTEREST SHALL CEASE TO ACCRUE AND BE PAYABLE FROM AND AFTER THE REDEMPTION DATE ON THE PRINCIPAL AMOUNT REDEEMED. DEFEASANCE ...The Ordinance provides that any Bond and the interest thereon shall be deemed to be paid, retired, and no longer outstanding (a "Defeased Bond") within the meaning of such Ordinance when payment of the principal of such Bond, plus interest thereon to the due date thereof either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for on or before such due date by irrevocably depositing with or making available to the Paying Agent/Registrar for such payment (1) lawful money of the United States of America sufficient to make such payment or (2) Government Obligations which mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to provide for such payment, and when proper arrangements have been made by the City with the Paying Agent/Registrarfnr the payment of its services until all Defeased Bonds shall have become due and payable. At such time as a Bond shall be deemed to be a Defeased Bond hereunder, as aforesaid, such Bond and the interest thereon shall no longer be secured by, payable from, or entitled to the benefits of, the ad valorem taxes herein levied and pledged as provided in the Ordinance or the pledge of the surplus net revenues of the City's Utility System as provided in the Ordinance, and such principal and interest shall be payable solely from such money or Government Obligations. Any moneys so deposited with the Paying Agent/Registrar may at the written direction of the City also be invested in Government Obligations, maturing in the amounts and times as hereinbefore set forth, and all income from such Government Obligations received by the Paying Agent/Registrar which is not required for the payment of the Bonds and interest thereon, with respect to which such money has been so deposited, shall be turned over to the City, or deposited as directed in writing to the City. The City has additionally reserved the right, subject to satisfying the requirements of (1) and (2) above, to substitute other Government Securities for the Government Securities originally deposited, and to withdraw for the benefit of the City moneys in excess of the amount required for such defeasance. The Ordinance provides that "Government Obligations" means (a) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (b) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (c) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. Upon such deposit as described above, such Defeased Bonds shall no longer be regarded to be outstanding and will not be considered debt of the City for any purpose. After firm banking and financial arrangements for the discharge and final payment or redemption of the Bonds have been made as described above, all rights of the City to initiate proceedings to call the Bonds for redemption or take any other action amending the terms of the Bonds are extinguished; provided, however, that the right to call the Bonds for redemption is not extinguished if the City: (i) in the proceedings providing for the firm banking and financial arrangements, expressly reserves the right to call the Bonds for redemption; (ii) gives notice of the reservation of that right to the owners of the Bonds immediately following the making of the firm banking and financial arrangements; (iii) directs that notice of the reservation be included in any redemption notices that it authorize; and (iv) at the time of the redemption, satisfies the conditions of the preceding paragraph with respect to such Bonds as though it was being defeased at the time of the exercise of the option to redeem the Bonds, after taking the redemption into account in determining the sufficiency of the provisions made for the payment of the Bonds. BOOK ENTRY ONLYSYSTEM ...This section describes how ownership of the Bonds is to be transferred and how the principal of, premium, if any, and interest on the Bonds are to be paid to and credited by DTC while the Bonds are registered in its nominee name. The information in this section concerning DTC and the Book-Envy-Only System has been provided by DTC for use in disclosure documents such as this Official Statement. The City believes the source of such information to be reliable, but take no responsibility for the accuracy or completeness thereof. The City cannot and does not give any assurance that (1) DTC will distribute payments of debt service on the Bonds, or redemption or other notices, to DTC Participants, (2) DTC Participants or others will distribute debt service payments paid to DTC or its nominee (as the registered owner of the Bonds), or redemption or other notices, to the Beneficial Owners, or that they will do so on a timely basis, or (3) DTC will serve and act in the manner described in this Official Statement. The current rules applicable to DTC are on file with the Securities and Exchange Commission, and the current procedures of DTC to be followed in dealing with DTC Participants are on file with DTC. 10 DTC will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered certificate will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest securities depository, is alimited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ("Direct Participants") deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation ("DTCC"). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). DTC has Standard & Poor's highest rating: AAA. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.or~. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond ("Beneficial Owner") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Paying AgentlRegistrar and request that copies of notices be provided directly to them. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC's Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Payment of principal and interest payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of funds and corresponding detail information from the City or Paying AgentlRegistrar, on the payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC nor its nominee, Paying AgentlRegistrar, or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or Paying Agent/Registrar, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. 11 DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the City or Paying AgentlRegistrar. Under such circumstances, in the event that a successor depository is not obtained, certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered. Use of Certain Terms in Other Sections of this Official Statement. In reading this Official Statement it should be understood that while the Bonds are in the Book-Entry-Only System, references in other sections of this Official Statement to registered owners should be read to include the person for which the Participant acquires an interest in the Bonds, but (i) all rights of ownership must be exercised through DTC and the Book-Entry-Only System, and (ii) except as described above, notices that are to be given to registered owners under the Ordinance will be given only to DTC. Information concerning DTC and the Book-Entry-Only System has been obtained from DTC and is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation by the City. Effect of Termination of Book-Entry-Only System. In the event the Book-Entry-Only System with respect to the Bonds is discontinued by DTC, or the use of the Book-Entry-Only System with respect to the Bonds is discontinued by the City, printed certificates will be issued to the respective holders of the Bonds, as the case may be, and the respective Bonds will be subject to transfer, exchange, and registration provisions as set forth in the Ordinance, summarized under "The Bonds -Transfer, Exchange, and Registration" below. PAYING AGENTIREGISTRAR ...The initial Paying Agent/Registrar is The Bank of New York Mellon Trust Company, N.A., Dallas, Texas. In the Ordinance the City retains the right to replace the Paying Agent/Registrar. The City covenants to maintain and provide a Paying AgentlRegistrar at all times until the Bonds are duly paid and any successor Paying Agent/Registrar shall be a commercial bank or trust company organized under the laws of the State of Texas or other entity duly qualified and legally authorized to serve as and perform the duties and services of Paying Agent/Registrar for the Bonds. Upon any change in the Paying AgentlRegistrar for the Bonds, the City agrees to promptly cause a written notice thereof to be sent to each registered owner of the Bonds by United States mail, first class, postage prepaid, which notice shall also give the address of the new Paying Agent/Registrar. Principal of the Bonds is payable to the registered holder appearing on the registration books of the Paying AgentlRegistrar (the "Registered Owner") at the designated corporate trust office of the Paying Agent/Registrar upon surrender of the Bonds for payment. Interest on the Bonds is payable to the Register Owners appearing on the registration books of the Paying Agent/Registrar at the close of business on the Record Date (identified below) and such interest shall be paid by the Paying Agent/Registrar by check mailed, first class postage prepaid, to the Register Owner or by such other arrangement, acceptable to the Paying AgentlRegistrar, requested by and at the risk and expense of the Registered Owner. If the date for the payment of the principal of or interest on the Bonds shall be a Saturday, Sunday, a legal holiday, or a day when banking institutions in the city where the designated corporate office of the Paying AgentlRegistrar is located is authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day when banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. TRANSFER, EXCHANGE AND REGISTRATION In the event the Book-Entry-Only System should be discontinued, printed Bonds will be delivered to the registered owners and thereafter the Bonds maybe transferred and exchanged on the registration books of the Paying AgentlRegistrar only upon presentation and surrender of such printed Bonds to the Paying AgentlRegistrar and such transfer or exchange shall be without expense or service charge to the registered owner, except for any tax or other governmental charges required to be paid with respect to such registration, exchange and transfer. Bonds may be assigned by the execution of an assignment form on the Bonds or by other instrument of transfer and assignment acceptable to the Paying AgentlRegistrar. New Bonds will be delivered by the Paying AgentlRegistrar, in lieu of the Bonds being transferred or exchanged, at the designated office of the Paying AgentlRegistrar, or sent by United States mail, first class, postage prepaid, to the new registered owner or his designee. To the extent possible, new Bonds issued in an exchange or transfer of Bonds will be delivered to the registered owner or assignee of the registered owner in not more than three business days after the receipt of the Bonds to be canceled, and the written instrument of transfer or request for exchange duly executed by the registered owner or his duly authorized agent, in form satisfactory to the Paying AgentlRegistrar. New Bonds registered and delivered in an exchange or transfer shall be in any integral multiple of $5,000 for any one maturity and for a like aggregate principal amount as the Bonds surrendered for exchange or transfer. See "The Bonds-Book-Entry-Only System" herein for a description of the system to be utilized initially in regard to ownership and transferability of the Bonds. RECORD DATE FOR INTEREST PAYMENT ...The record date ("Record Date") for the interest payable on the Bonds on any interest payment date means the fifteenth day of the month next preceding such interest payment date. In the event of anon-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying AgentlRegistrar, if and when funds for the payment 12 of such interest have been received from the City. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each Holder of a Bond appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. AMENDMENTS In the Ordinance, the City has reserved the right to amend the Ordinance without the consent of any holder for the purpose of amending or supplementing the Ordinance to (i) cure any ambiguity, defect or omission therein that does not materially adversely affect the interests of the holders, (ii) grant additional rights or security for the benefit of the holders, (iii) add events of default as shall not be inconsistent with the provisions of the Ordinance that do not materially adversely affect the interests of the holders, (iv) qualify the Ordinance under the Trust Indenture Act of 1939, as amended, or corresponding provisions of federal laws from time to time in effect or (v) make such other provisions in regard to matters or questions arising under the Ordinance that are not inconsistent with the provisions thereof and which, in the opinion of Bond Counsel for the City, do not materially adversely affect the interests of the holders. The Ordinance further provides that the holders of the Bonds aggregating in a majority of the principal amount of the outstanding Bonds shall have the right from time to time to approve any amendment not described above to the Ordinance if it is deemed necessary or desirable by the City; provided, however, that without the consent of all of the holders in original principal amount of the then outstanding Bonds, no amendment may be made for the purpose of: (i) making any change in the maturity of any of the outstanding Bonds; (ii) reducing the rate of interest borne by any of the outstanding Bonds; (iii) reducing the amount of the principal of, or redemption premium, if any, payable on any outstanding Bonds; (iv) modifying the terms of payment of principal or of interest or redemption premium on outstanding Bonds, or imposing any condition with respect to such payment; or (v) changing the minimum percentage of the principal amount of the Bonds necessary for consent to such amendment. Reference is made to the Ordinance for further provisions relating to the amendment thereof. BONDHOLDERS' REMEDIES ...The Ordinance establishes specific events of default with respect to the Bonds. If the City defaults in the payment of the principal of or interest on the Bonds when due, or the City defaults in the observance or performance of any of the covenants, conditions, or obligations of the City, the failure to perform which materially adversely affects the rights of the owners, including but not limited to, their prospect or ability to be repaid in accordance with the Ordinance, and the continuation thereof for a period of 60 days after notice of such default is given by any owner to the City, the Ordinance provides that any registered owner is entitled to seek a writ of mandamus from a court of proper jurisdiction requiring the City to make such payment or observe and perform such covenants, obligations, or conditions. The issuance of a writ of mandamus maybe sought if there is no other available remedy at law to compel performance of the Bonds or the Ordinance and the City's obligations are not uncertain or disputed. The issuance of a writ of mandamus is controlled by equitable principles and rests with the discretion of the court, but may not be arbitrarily refused. There is no acceleration of maturity of the Bonds in the event of default and, consequently, the remedy of mandamus may have to be relied upon from year to year. The Ordinance does not provide for the appointment of a trustee to represent the interest of the holders of the Bonds upon any failure of the City to perform in accordance with the terms of the Ordinance, or upon any other condition and accordingly all legal actions to enforce such remedies would have to be undertaken at the initiative of, and be financed by, the registered owners. On June 30, 2006, the Texas Supreme Court ruled in Tooke v. City of Mexia, 197 S.W.3d 325 (Tex. 2006) that a waiver of sovereign immunity in a contractual dispute must be provided for by statute in "clear and unambiguous" language. Because it is unclear whether the Texas legislature has effectively waived the City's sovereign immunity from a suit for money damages, Bondholders may not be able to bring such a suit against the City for breach of the Bonds or Ordinance covenants in the absence of City action. Chapter 1371, Texas Government Code ("Chapter 1371 which pertains to the issuance of public securities by issuers such as the City, permits the City to waive sovereign immunity in the proceedings authorizing its bonds, but in connection with the issuance of the Bonds, the City has not waived sovereign immunity and is not using the legal authority provided by Chapter 1371. Even if a judgment against the City could be obtained, it could not be enforced by direct levy and execution against the City's property. Further, the registered owners cannot themselves foreclose on property within the City or sell property within the City to enforce the tax lien on taxable property to pay the principal of and interest on the Bonds. Furthermore, the City is eligible to seek relief from its creditors under Chapter 9 of the U.S. Bankruptcy Code ("Chapter 9"). Although Chapter 9 provides for the recognition of a security interest represented by a specifically pledged source of revenues, the pledge of ad valorem taxes in support of a general obligation of a bankrupt entity is not specifically recognized as a security interest under Chapter 9 and such provision is subject to judicial construction. Chapter 9 also includes an automatic stay provision that would prohibit, without Bankruptcy Court approval, the prosecution of any other legal action by creditors or Bondholders of an entity which has sought protection under Chapter 9. Therefore, should the City avail itself of Chapter 9 protection from creditors, the ability to enforce would be subject to the approval of the Bankruptcy Court (which could require that the action be heard in Bankruptcy Court instead of other federal or state court); and the Bankruptcy Code provides for broad discretionary powers of a Bankruptcy Court in administering any proceeding brought before it. The opinions of Bond Counsel will note that all opinions relative to the enforceability of the Bonds are qualified with respect to the customary rights of debtors relative to their creditors. 13 TAX INFORMATION A~ VALOREM TAx LAw ...The appraisal of property within the City is the responsibility of the Denton Central Appraisal District (the "Appraisal District"). Excluding agricultural and open-space land, which may be taxed on the basis of productive capacity, the Appraisal District is required under V.T.C.A., Title I, Tax Code, as amended (the "Property Tax Code") to appraise all property within the Appraisal District on the basis of 100% of its market value and is prohibited from applying any assessment ratios. In determining market value of property, different methods of appraisal may be used, including the cost method of appraisal, the income method of appraisal and the market data comparison method of appraisal, and the method considered most appropriate by the chief appraiser is to be used. State law further limits the appraised value of a residence homestead for a tax year to an amount that would not exceed the lesser of (1) the market value of the property for the most recent tax year that the market value was determined by the appraisal office or (2) the sum of (a)10% of the property's appraised value in the preceding tax year, plus (b) the property's appraised value in the preceding tax year, plus (c) the market value of all new improvements to the property. The value placed upon property within the Appraisal District is subject to review by an Appraisal Review Board, consisting of sixteen members appointed by the Board of Directors of the Appraisal District. The Appraisal District is required to review the value of property within the Appraisal District at least every three years. The City may require annual review at its own expense, and is entitled to challenge the determination of appraised value of property within the City by petition filed with the Appraisal Review Board. Reference is made to the Property Tax Code, for identification of property subject to taxation; property exempt or which may be exempted from taxation, if claimed; the appraisal of property for ad valorem taxation purposes; and the procedures and limitations applicable to the levy and collection of ad valorem taxes. Article VIII of the State Constitution ("Article VIII") and State law provide for certain exemptions from property taxes, the valuation of agricultural and open-space lands at productivity value, and the exemption of certain personal property from ad valorem taxation. Under Section 1-b, Article VIII, and State law, the governing body of a political subdivision, at its option, may grant an exemption of not less than $3,000 of the market value of the residence homestead of persons 65 years of age or older and the disabled from all ad valorem taxes thereafter levied by the political subdivision. Once authorized, such exemption may be repealed or decreased or increased in amount (i) by the governing body of the political subdivision or (ii) by a favorable vote of a majority of the qualified voters at an election called by the governing body of the political subdivision, which election must be called upon receipt of a petition signed by at least 20% of the number of qualified voters who voted in the preceding election of the political subdivision. In the case of a decrease, the amount of the exemption may not be reduced to less than $3,000 of the market value. The surviving spouse of an individual who qualifies for the foregoing exemption for the residence homestead of a person 65 or older (but not the disabled) is entitled to an exemption for the same property in an amount equal to that of the exemption for which the deceased spouse qualified if (i) the deceased spouse died in a year in which the deceased spouse qualified for the exemption, (ii) the surviving spouse was at least 55 years of age at the time of the death of the individual's spouse and (iii) the property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse. In addition to any other exemptions provided by the Property Tax Code, the governing body of a political subdivision, at its option, may grant an exemption of up to 20% of the market value of residence homesteads, with a minimum exemption of $5,000. In the case of residence homestead exemptions granted under Section 1-b, Article VIII, ad valorem taxes may continue to be levied against the value of homesteads exempted where ad valorem taxes have previously been pledged for the payment of debt if cessation of the levy would impair the obligation of the contract by which the debt was created. Under Article VIII and State law, the governing body of a county, municipality or junior college district may provide for a freeze on total amount of ad valorem taxes levied on the residence homestead of a disabled person or persons 65 years of age or older above the amount of tax imposed in the year such residence qualified for such exemption. Also, upon receipt of a petition signed by five percent of the registered voters of the county, municipality or junior college district, an election must be held to determine by majority vote whether to establish such a limitation on taxes paid on residence homesteads of persons 65 years of age or who are disabled. Upon providing for such exemption, the total amount of taxes imposed on such homestead cannot be increased except for improvements (other than maintenance, repairs or improvements required to comply with governmental requirements) and such freeze is transferable to a different residence homestead. Also, a surviving spouse of a taxpayer who qualifies for the freeze on ad valorem taxes is entitled to the same exemption so long as the property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse and the spouse was at least 55 years of age at the time of the death of the individual's spouse. Once established such freeze cannot be repealed or rescinded. State law and Section 2, Article VIII, mandate an additional property tax exemption for disabled veterans or the surviving spouse or children of a deceased veteran who died while on active duty in the armed forces; the exemption applies to either real or personal property with the amount of assessed valuation exempted ranging from $5,000 to a maximum of $12,000, dependent upon the degree of disability or whether the exemption is applicable to a surviving spouse or children; provided, however, that beginning in the 2009 tax year, a disabled veteran who receives from the from the United States Department of Veterans Affairs or its successor 100 percent disability compensation due to aservice-connected disability and a rating of 100 percent disabled or of individual unemployability is entitled to an exemption from taxation of the total appraised value of the veteran's residence homestead. 14 Article VIII provides that eligible owners of both agricultural land (Section 1-d) and open-space land (Section 1-d-1), including open-space land devoted to farm or ranch purposes or open-space land devoted to timber production, may elect to have such property appraised for property taxation on the basis of its productive capacity. The same land may not be qualified under both Section 1-d and 1-d- l . Nonbusiness personal property, such as automobiles or light trucks, are exempt from ad valorem taxation unless the governing body of a political subdivision elects to tax this property. Boats owned as nonbusiness property are exempt from ad valorem taxation. Article VIII, Section 1 j, provides for "freeport property" to be exempted from ad valorem taxation. Freeport property is defined as goods detained in Texas for 175 days or less for the purpose of assembly, storage, manufacturing, processing or fabrication. Notwithstanding such exemption, counties, school districts, junior college districts and cities may tax such tangible personal property provided official action to tax the same was taken before April 1, 1990. Decisions to continue to tax maybe reversed in the future; decisions to exempt freeport property are not subject to reversal. Article VIII, Section 1-n of the Texas Constitution provides for the exemption from taxation of "goods-in-transit." "Goods-in- transit" is defined by Section 11.253 of the Property Tax Code, which is effective for tax years 2008 and thereafter, as personal property acquired or imported into Texas and transported to another location in the State or outside of the State within 175 days of the date the property was acquired or imported into Texas. The exemption excludes oil, natural gas, petroleum products, aircraft and special inventory, including motor vehicle, vessel and out-board motor, heavy equipment and manufactured housing inventory. Section 11.253 permits local governmental entities, on a local option basis, to take official action by January 1 of the year preceding a tax year, after holding a public hearing, to tax "goods-in-transit" during the following tax year. A taxpayer may only receive either the freeport exemption or the "goods-in-transit" exemption for items of personal property. The City or Denton County may create one or more tax increment financing districts ("TIF") within the City or Denton County, as applicable, and freeze the taxable values of property in the TIF at the value at the time of its creation. Other overlapping taxing units levying taxes in the TIF may agree to contribute all or part of future ad valorem taxes levied and collected against the value of property in the TIF in excess of the "frozen values" to pay or finance the costs of certain public improvements in the TIF. Taxes levied by the City against the values of real property in the TIF in excess of the "frozen" value are not available for general city use but are restricted to paying or financing "project costs" within the TIF. The City also may enter into tax abatement agreements to encourage economic development. Under the agreements, a property owner agrees to construct certain improvements on its property. The City in turn agrees not to levy a tax on all or part of the increased value attributable to the improvements until the expiration of the agreement. The abatement agreement could last for a period of up to 10 years. The City is also authorized, pursuant to Chapter 380, Texas Local Government Code, as amended ("Chapter 380"), to establish programs to promote state or local economic development and to stimulate business and commercial activity in the City. In accordance with a program established pursuant to Chapter 380, the City may make loans or grants of public funds for economic development purposes, however no obligations secured by ad valorem taxes maybe issued for such purposes unless approved by voters of the City. EFFECTIVE TAX RATE AND ROLLBACK TAX RATE ...Under the current Property Tax Code a governing body of a taxing unit is required to adopt its annual tax rate per $100 taxable value for the unit before the later of September 30 or the 60th day after the date the certified appraisal roll is received by the taxing unit, and a failure to adopt a tax rate by such required date will result in the tax rate for the taxing unit for the tax year to be the lower of the effective tax rate calculated for that tax year or the tax rate adopted by the taxing unit for the preceding tax year. By each September 1 or as soon thereafter as practicable, the City Council adopts a tax rate per $100 taxable value for the current year. The tax rate consists of two components: (1) a rate for funding of maintenance and operation expenditures, and (2) a rate for debt service. Under the Property Tax Code, the City must annually calculate and publicize its "effective tax rate" and "rollback tax rate". The City Council may not adopt a tax rate that exceeds the lower of the effective tax rate or the rollback tax rate until it has held two public hearings on the proposed increase following notice to the taxpayers and otherwise complied with the Property Tax Code. If the adopted tax rate exceeds the rollback tax rate the qualified voters of the City by petition may require that an election be held to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate. "Effective tax rate" means the rate that will produce last year's total tax levy (adjusted) from this year's total taxable values (adjusted). "Adjusted" means lost values are not included in the calculation of last year's taxes and new values are not included in this year's taxable values. "Rollback tax rate" means the rate that will produce last year's maintenance and operation tax levy (adjusted) from this year's values (adjusted) multiplied by 1.08 plus a rate that will produce this year's debt service from this year's values (unadjusted) divided by the anticipated tax collection rate. The Property Tax Code provides that certain cities and counties in the State may submit a proposition to the voters to authorize an additional one-half cent sales tax on retail sales of taxable items. If the additional tax is levied, the effective tax rate and the rollback tax rate calculations are required to be offset by the revenue that will be generated by the sales tax in the current year. Reference is made to the Property Tax Code for definitive requirements for the levy and collection of ad valorem taxes and the calculation of the various defined tax rates. 15 PROPERTY ASSESSMENT AND TAX PAYMENT ...Property within the City is generally assessed as of January 1 of each year. Business inventory may, at the option of the taxpayer, be assessed as of September 1. Oil and gas reserves are assessed on the basis of a valuation process which uses an average of the daily price of oil and gas for the prior year. Taxes become due October 1 of the same year, and become delinquent on February 1 of the following year. Taxpayers 65 years old or older are permitted by State law to pay taxes on homesteads in four installments with the first due on February 1 of each year and the final installment due on August 1. PENALTIES AND INTEREST Charges for penalty and interest on the unpaid balance of delinquent taxes are made as follows: Cumulative Cumulative Month Penalty Interest Total February 6% 1% 7% March 7 2 9 April 8 3 11 May 9 4 13 June 10 5 15 July 12 6 18 After July, penalty remains at 12%, and interest accrues at a rate of one percent (1%) for each month or portion of a month the tax remains unpaid. A delinquent tax continues to incur the penalty interest as long as the tax remains unpaid, regardless of whether a judgment for the delinquent tax has been rendered. The purpose of imposing such interest is to compensate the taxing unit for revenue lost because of the delinquency. In addition, if an account is delinquent in July, an attorney's collection fee of up to 20% may be added to the total tax penalty and interest charge. Under certain circumstances, taxes which become delinquent on the homestead of a taxpayer 65 years old or older incur a penalty of 8% per annum with no additional penalties or interest assessed. In general, property subject to the City's lien may be sold, in whole or in parcels, pursuant to court order to collect the amounts due. Federal law does not allow for the collection of penalty and interest against an estate in bankruptcy. Federal bankruptcy law provides that an automatic stay of action by creditors and other entities, including governmental units, goes into effect with the filing of any petition in bankruptcy. The automatic stay prevents governmental units from foreclosing on property and prevents liens for post-petition taxes from attaching to property and obtaining secured creditor status unless, in either case, an order lifting the stay is obtained from the bankruptcy court. In many cases post-petition taxes are paid as an administrative expense of the estate in bankruptcy or by order of the bankruptcy court. CITY APPLICATION of TAX CODE ...The City grants an exemption to the market value of the residence homestead of persons 65 years of age or older of $30,000 and those who are disabled of $10,000. The City grants an additional one-half of one percent, or a minimum of $5,000 exemption of the market value of residence homesteads. See Table 1 for a listing of the amounts of the exemptions described above. Ad valorem taxes are not levied by the City against the exempt value of residence homesteads for the payment of debt. The City does not tax nonbusiness personal property. Denton County began collecting taxes for the City during the fiscal year 2006-07. The City does not allow split payments, and discounts are not allowed. The City does not tax freeport property. The City collects the additional one-half cent sales tax for reduction of ad valorem taxes. The City does tax "goods-in-transit". The City has not adopted the tax freeze for citizens who are disabled or are 65 years of age or older. The City has approved an increase in the Over-65 exemption in $5,000 increments from $30,000 to $50,000 over the next four years. The City has adopted a tax abatement policy. The City does not participate in any tax increment financing zones. TAx ABATEMENT POLICY ...The City has adopted a tax abatement policy. In 1990, the City council adopted a resolution setting guidelines and criteria for granting abatements in reinvestment zones created within the City. These guidelines 16 specifically note that incentives are limited to companies which create new wealth and do not adversely affect existing businesses operating within the City. The City Council approved the following tax abatement agreements: • In 2001, a 100% tax abatement for a term of ten years was granted to Peterbilt Motors on the incremental value relating to the expansion of their division headquarters. The project was completed and the abatement will expire in 2011. • In 2003, a 35% tax abatement for a term of five years was granted to Flowers Baking Company on the incremental value relating to the expansion and renovation of a vacant facility in Denton. The project was completed and the three- phaseproject abatement will expire in 2011. • In 2004, a 35% tax abatement for a term of five years was granted to Fastenal Company for their 200,000 square foot, $5 million distribution center. The project was delayed but completed in 2008 at an estimated valuation of $15 million. The agreement will terminate in 2013. • In 2007, a 100% tax abatement for a term of up to seven years was granted to Aldi Foods for their 500,000 square foot $52 million distribution center. The abatement amount is based on the cost incurred by Aldi to construct a road to their site. The project was completed in 2009 and the agreement will terminate in 2016. CHAPTER 38O AGREEMENTS ...The City has also entered into Chapter 380 agreements. Each agreement is based on the project's contribution in either sales or property tax revenue. The City Council approved the following Chapter 380 agreements: • In 2001, an agreement was approved for the 450,000 square foot, $50 million Denton Crossing retail center. The grantee receives one-third of the sales tax generated by the project for a maximum of fifteen years as reimbursement for public improvement costs related to the project. The project was completed and the Chapter 380 Grant was initiated in 2004. The agreement will terminate in 2018. • In 2003, an agreement was approved for Sally Beauty Company for their new international headquarters valued at over $29 million. The company receives a grant equal to 40% of the property tax paid on the new facility and equipment for a period of ten years. The agreement will terminate in 2014. • In 2004, an agreement was approved for Teasley Partners for an urban style mixed-use development. The grantee may receive one-third of the sales tax generated by the project for a maximum of fifteen years as reimbursement for public improvement costs related to the project. The project has not been completed. Although a new hotel and some residential units have been completed, no qualifying retail has been constructed. • In 2004, an agreement was approved for Windjammer Ltd for Unicorn Lake, an urban style mixed-use development. The grantee will receive one-third of the sales tax generated by the project for a maximum of fifteen years as reimbursement for public improvement costs related to the project. Although the project is still under development, the grantee has satisfied the thresholds established in the agreement. The grant payments were initiated in December 2009. The agreement will terminate in 2023. • In 2007, an agreement was approved for Allegiance Hillview for the Rayzor Ranch mixed-use development. The 400 acre project will have over one million square feet of retail and will be built in two phases. The agreement provides a varying rate of sales tax reimbursement based on public improvement costs, which include the widening of a state highway that bisects the project. The grantee will receive a maximum of $20 million over a 15 year term for phase one and a maximum of $42 million over a term of 20 years for phase two. Phase one is under construction with major big box retail planned for completion in late 2011 or early 2012. • In 2008, an agreement was approved for the expansion of Jostens. The grant is based on 75% of the new property tax revenue generated by the expansion for a term of seven years. The project was completed and the agreement will terminate in 2015. ANNEXATION PLANS ...The City is currently considering the annexation of 18 areas totalling approximately 9,089 acres. If the City moves forward with the annexation, it will take place in phases and the cost to provide services to the areas as well as any revenues generated from the areas will also occur in phases over a three to five year period. If all 18 areas are annexed, it is estimated that a total of 2,136 residents will be added to the city's population. State law requires the City to prepare a service plan that provides for full municipal services (defined to mean services provided by the City within its full-purpose boundaries, including water and wastewater services but excluding gas or electrical service) to the annexed areas. The City may provide the services by any of the methods by which it extend services to other areas of the City. The City currently estimates that if all 18 areas are annexed, the total aggregate net cost of the annexation (costs of services to the annexed areas over additional ad valorem taxes, sales taxes and other revenues generated from the annexed areas) to the City will be approximately $2,014,000 after five years and approximately $2,625,000 after ten years. The estimate makes a number of assumptions regarding expenditures and revenues over the next few years. The overriding assumption for the analysis is that the fundamental development of the proposed annexation areas does not change. In other words, the annexation cost estimate does not assume that any major developments will take place in the proposed annexation area. This assumption is being made for the cost estimate since additional developments are not known with any certainty. The use of this assumption, however, should not be interpreted to mean that the area is not expected to develop over time. 17 TABLE I -VALUATION, EXEMPTIONS AND GENERAL OBLIGATION DEBT 2009/10 Market Valuation Established by Denton Central Appraisal District $7,099,231,878 Less ExemptionslReductions at 100% Market Value: Residence Homestead Exemptions $ 83,711,284 Over 65 Exemptions 138,378,400 DisabledPersonsExempbons 2,836,433 DisabledVeteransExempbons 11,690,168 Agricultural Land Use Productivity 290,391,229 HistoncaUOther Exemptions 4,988,771 Freeport Exemptions 192,952,696 Abatement Exemptions 9,702,511 Prorated Exempt Property 428,934 Pollution Exemptions 31,297,815 Homestead Cap Adjustment 4,944,615 771,322,856 2009/10 Taxable Assessed Valuation (as of 7-18-09) $ 6,327,909,022 City Funded Debt Payable from Ad Valorem Taxes (1) General ObligationBonds (as of 12-31-09) $ 81,725,000 Certificates ofObligation(as of 12-31-09) 59,855,000 The Bonds 59,480,000 Funded Debt Payable from Ad Valorem Taxes $ 201,060,000 Less S elf Supporting General Obligation Debt (3) Solid Waste System General Obligation Debt $ 15,610,200 Drainage System General Obligation Debt 3,135,000 Utility System General Obligation Debt 59,480,000 (4) 78,225,200 Net Tax Supported Debt Payable from Ad Valorem Taxes $ 122,834,800 Interest and Sinking Fund as of 12-31-09 (unaudited) $ 7,098,474 Ratio Total Funded Debt to Taxable Assessed Valuation 3.18% Ratio Net Funded Debt to Taxable Assessed Valuation . 1.94% 2010 Estimated Population - 121,374 Per Capita Taxable Assessed Valuation - $52,136 Per Capita Total Funded Debt - $1,657 Per Capita Net Funded Debt - $1,012 (1) The above statement of indebtedness does not include $266,705,000 Utility System Revenue Bonds as these bonds are payable solely from the net revenues of the Utility System (the "System"), as defined in the ordinances authorizing such bonds. Does not include the refunded obligations. (2) Preliminary, subject to change. (3) General Obligation debt in the amounts shown for which repayment is provided from revenues of the respective revenue systems. The amount of self supporting debt is based on the percentages of revenue support as shown in Table 9. It is the City's current policy to provide these payments from respective system revenues; this policy is subject to change in the future. (4) Includes the Bonds. Preliminary, subject to change. 18 TABLE Z -TAXABLE ASSESSED VALUATIONS BY CATEGORY (1) Taxable Appraised Value for Fiscal Year Ended September 30, 2010 2009 2008 of % of % of Category Amount Total Amount Total Amount Total Real, Residential, Single Family $3,475,374,687 48.95% $3,397,880,407 48.63% $3,192,783,727 48.35% Real, Residential, Multi-Family 688,298,068 9.70% 638,906,357 9.14% 552,635,146 8.37% Real, VacantLots/Tracts 162,282,464 2.29% 160,766,209 2.30% 135,800,628 2.06% Real, Acreage (Land Only) 356,896,058 5.03% 330,913,400 4.74% 330,570,774 5.01% Real, Farm and Ranch Improvements 33,242,494 0.47% 32,526,580 0.47% 51,987,396 0.79% Real, Commercial and Industrial 1,392,817,179 19.62% 1,416,914,699 20.28% 1,326,705,553 20.09% Real, Oil, Gas, and Other Mineral Reserves 68,616,710 0.97% 51,531,540 0.74% 46,500,010 0.70% Real and Tangible Personal, Utilities 79,577,104 1.12% 84,395,222 L21% 68,372,262 1.04% Tangible Personal, Commercial and Industrial 749,892,931 10.56% 778,403,096 1 L 14% 785,231,437 11.89% Tangible Personal, Other 17,779,752 0.25% 20,656,852 0.30% 19,919,543 0.30% Real and Special Property, Inventory 74,454,431 1.05% 74,539,998 L07% 92,889,789 1.41% Total Appraised Value Before Exemptions $ 7,099,231,878 100.00% $ 6,987,434,360 100.00% $ 6,603,396,265 100.00% Less: Total Exemptions/Reductions (771,322,856) (696,075,248) (671,868,100) Supplements - - 157,971,610 Taxable Assessed Value $6,327,909,022 $ 6,291,359,112 $6,089,499,775 Taxable Appraised Value for Fiscal Year Ended September 30, 2007 2006 %of %of Category Amount Total Amount Total Real, Residential, Single Family $2,927,902,799 50.15% $ 2,630,845,438 50.72% Real, Residential, Multi-Family 454,710,640 7.79% 446,271,900 8.60% Real, VacantLots/Tracts 131,508,053 2.25% 98,411,369 L90% Real, Acreage (Land Only) 277,588,810 4.75% 222,710,266 4.29% Real, Farm and Ranch Improvements 29,732,528 0.51% 23,387,957 0.45% Real, Commercial and Industrial 1,085,722,435 18.60% 1,000,517,019 19.29% Real, Oil, Gas, and Other Mineral Reserves 57,823,640 0.99% 26,722,880 0.52% Real and Tangible Personal, Utilities 62,085,822 1.06% 61,453,659 L 18% Tangible Personal, Commercial and Industrial 737,260,202 12.63% 577,041,159 1 L 12% Tangible Personal, Other 23,654,377 0.41% 26,019,704 0.50% Real Property, Inventory 50,263,276 0.86% 73,514,372 L42% Total Appraised Value Before Exemptions $ 5,838,252,582 100.00% $ 5,186,895,723 100.00% Less: Total Exemptions/Reductions (593,625,675) (493,123,258) Supplements 195,927,794 95,604,346 Taxable Assessed Value $ 5,441,228,909 $ 4,789,376,811 (1) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. For the Fiscal Year ended 2010 the values are as of July 18, 2009. (2) Due to a change in Appraisal District reporting supplements are included in category amounts. 19 TABLE 3 -VALUATION AND GENERAL OBLIGATION DEBT HISTORY Net Ratio Fiscal Taxable Tax Debt Tax Debt Funded Year Taxable Assessed Outstanding to Taxable Debt Ended Estimated Assessed Valuation at End Assessed Per 9/30 Population (1) Valuation (2) Per Capita of Year (4) Valuation Capita 2006 108,381 $ 4,789,376,811 $44,190 $101,054,142 2.11% $ 932 2007 113,800 5,441,228,909 47,814 119,266,729 2.19% 1,048 2008 115,506 6,089,499,775 52,720 129,439,594 2.13% 1,121 2009 118,904 6,291,359,112 52,911 122,835,000 1.95% 1,033 2010 121,374 6,327,909,022 (3) 52,136 113,537,600 (5) 1.79% (s) 935 (5) (1) Source: City Officials. (2) Valuations shown are certified taxable assessed values reported by the Denton Central Appraisal District to the State Comptroller of Public Accounts. Certified values are subject to change throughout the year as contested values are resolved and the Appraisal District updates records. (3) Source: Denton Central Appraisal District as of July 18, 2009. (4) Excludes self supported general obligation debt. (5) Projected, excludes the Bonds. Preliminary, subject to change. TABLE 4 -TAX RATE, LEVY AND COLLECTION HISTORY Fiscal Year Distribution Ended Tax General Interest and % Current % Total 9/30 Rate Fund Sinking Fund Tax Levy (1) Collections Collections 2006 $ 0.60815 $0.42928 $ 0.17887 $29,545,033 98.71% 100.22% 2007 0.62652 0.44765 0.17887 34,273,862 99.83% 100.62% 2008 0.66652 0.44765 0.21887 40,816,256 98.87% 101.08% 2009 0.66652 0.44765 0.21887 43,086,123 98.46% 99.18% 2010 0.66652 0.44765 0.21887 42,176,779 25.34% (2) 25.78% (1) Tax levy for the 2010 year is based on the Certified Value. Prior years represent adjusted values that include supplements. (2) Collections for part year only, through December 31, 2009. TABLE S -TEN LARGEST TAXPAYERS 2009/10 % of Total Taxable Taxable Assessed Assessed Name of Taxpayer Nature of Property Valuation Valuation Columbia Medical Center of Denton HospitaUProfessionalBui1ding $83,900,462 1.33% Inland Western Denton Crossing Ltd PS Real Estate Development 53,041,520 0.84% Paccar Inc. Diesel Truck Manufacturing 52,109,610 0.82% GTE Southwest Inc. DBA Verizon Telephone Utility 32,549,140 0.51% GEL Timberlinks LLCD Residential Multifamily 29,500,000 0.47% Aldi (Texas) LLC Retail Distribution Center 25,554,780 0.40% Denton Education Housing Corp. Residential Multifamily 21,693,000 0.34% SCI Gateway at Denton Fund 25 LLC Commercial Lots/Real, Industrial 20,717,990 0.33% CNL Retirement CRSI Medical Facilities 19,778,423 0.31% Value Family Properties Mixed Use Development 19,776,368 0.31% $358,621,293 5.67% Source: Denton County Tax Office. GENERAL OBLIGATION DEBT LIMITATION No general obligation debt limitation is imposed on the City under current State law or the City's Home Rule Charter (see "The Bonds -Tax Rate Limitation" for a description of the limitations on ad valorem tax rates.). 20 TABLE 6 -ESTIMATED OVERLAPPING TAX DEBT Expenditures of the various taxing entities within the territory of the City are paid out of ad valorem taxes levied by such entities on properties within the City. Such entities are independent of the City and may incur borrowings to finance their expenditures. This statement of direct and estimated overlapping ad valorem tax bonds ("Tax Debt") was developed from information contained in "Texas Municipal Reports" published by the Municipal Advisory Council of Texas. Except for the amounts relating to the City, the City has not independently verified the accuracy or completeness of such information, and no person should rely upon such information as being accurate or complete. Furthermore, certain of the entities listed may have issued additional Tax Debt since the date hereof, and such entities may have programs requiring the issuance of substantial amounts of additional Tax Debt, the amount of which cannot be determined. The following table reflects the estimated share of overlapping Tax Debt of the City. 2009/10 City's Authorized Taxable 2009/10 Total Estimated Overlapping But Unissued Assessed Tax Funded % Funded Debt Debt As Of Taxing Jurisdiction Value Rate Debt Applicable As of 12-31-09 12-31-09 City ofDenton $6,327,909,022 $ 0.66652 $122,834,800 (1) 100.00% $122,834,800 $10,334,000 Denton Independent School District 8,760,564,622 1.49000 626,713,437 64.64% 405,107,566 116,749,713 Denton County 53,341,773,091 024980 374,335,733 11.96% 44,770,554 470,920,625 Argyle Independent School District 981,880,201 1.41005 56,256,194 7.78% 4,376,732 - Aubrey Independent School District 526,694,070 1.54000 53,954,104 0.01% 5,395 - KrumIndependent School District 693,369,703 1.44000 48,030,303 1.94% 931,788 - Pilot Point Independent School District 481,614,548 137000 19,269,576 0.06% 11,562 - PonderIndependentSchoolDistrict 962,239,171 130903 31,695,000 1.12% 354,984 - SangerIndependent School District 665,896,197 136000 29,423,901 011% 32,366 - Total Direct and Overlapping Funded Debt $ 578,425,747 Ratio of Direct and Overlapping Funded Debt to Taxable Assessed Valuation 9.14% Per Capita Overlapping Funded Debt $ 4,765.65 (1) Less self supporting debt. 21 GENERAL OBLIGATION DEBT INFORMATION ~ ~ a a o 0 ~ , ~ a~ Q, o 0 0 a ~ m ~o a~ o N ~ ~ O ~ ~0 l~ v1 00 ~D N o0 ~ Q\ ~ N ~ ~ ~ Q\ Ql a1 ' O ~ ~ ~n N N N ~n O l~ 0~ ~ 00 ~ ~D 0~ N r1 00 N ~ ~n ~ N ~ ~ ~ Q\ ~ ill l~ N ~ ~ O ~ 00 O l~ ~ O O a1 N ~ a; N a\ Q1 00 ~ O ~ ~ N c~ N ~D N ~D O ~D 01 ~n U O V] ~ ~ ~ N ~ O o0 Q1 vl l~ ~D o0 0~ v1 ~ ~ ~ Q1 M M ~ , ~ ~0 N ~ ~ ~D ~ N 00 O ~ c+1 O O l~ N N vl DO M l~ ~ ~ ~ ~ ~ cy1 N ~ r+ ~ O O a1 00 00 ~ v1 Vl ~ c~ N ~ ~n ~ ~ ~ ~ ~ ~ ~ ~ ~ U Q ~ ~ ~ ~ oo ~ ~ 00 o M o ~ ~ c+1 0 0 0 v~, o ~ ~ 0o N ~ m ~n ~ ~n l~ N ~O O ~n v~ ~ O r ~ ~ ~ v 00 ~ ~ ~ O Q1 O N 10 ~ O ~ ~ m O O ~ C/~ i.a r,., (+1 fyl C+'1 fr7 V'1 V7 V'1 ~ V1 C+1 N C+1 fr7 l0 ~D ~D O ~ l~ l~ l~ l~ l~ l~ l~ l~ l~ l~ l~ l~ l~ l~ l~ ~ V] ~ V'1 V1 Vl V1 V1 V1 V1 V1 ~ V"1 ~ V'1 V1 V1 V1 ~D ~ ~ ~ ~ ~ ~ ~ ~ ~ v~ ~n v~ ~n v~ ~n v~ ~n ~n ~n v-~ v~ ~n v~ ~n m .ter ~ ~ ~ ~ ~ ~ G-~ ~ b!1 l~ ~ ~/1 0~ DO vl DO O ~D ' ' ' ' ' ' ' ' ' ' ' r ~ ~ ~ ~ N ~ DO N c+7 O O O ~ ' ~ ~ ~ O N N ~ t'r7 O~ ~ O ~n N ~ ~ ~ . ~ O \0 ~ ~ vi 10 M ~ 00 cn m 0. ~ ~ N ~n ~ ~0 0 00 ~ m ~ ~ ~ Q ~n v~ ~n ~ ~ cn r~ N ~ ~ v~ ~ ~ Q M ~ ~ ~ . 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N m m m m m m m~~~~~ ~n v-~ o, ~ w ~ ~ O ~ d o aq ~ a1 ~ ~ ~ m o0 0o N o~ ~ v~ m ~ o ~ m N ~ ' ~ ~ ~ 00 O N l~ ~ 0~ l~ ~l1 00 V1 N 00 ~ ~ V1 10 O 01 l~ V1 ~ \0 V1 Q~ r+ ~D ~O l~ V1 Q~ a1 ~ M ~ v1 0~ ~D 0~ ~D l0 ~D U N W ~ v-, v~ oa c~i Q; ~i oo vi oo o m o ~ ~ o m oo ~o ~n ~ ~ U V ~ oa O N oo ~n N m 10 ~ ~ ~n l~ 00 ~ ~ ~ ~ l~ ~ N ~ N r o Q, m cy, oo ~ cy, ~n o0 0 0~ ~ ~ ~ cv ~o ~ 00 0 ~ o ~ ~ O i~ t~ r ~o ~ m m N ~ a1 ~ oo ~ ~ vi ~ m m r+ o~ N ~--i ~ ~ ~ ~ ~ ~ ~ W ~ a1 ~ ~ ~ m o0 0o N o~ ~ v~ m ~ o ~ m N ~ ' ~ ~ 00 Q A 00 O N ~ 0~ l~ v'i o0 ~n N *i o0 ~ r+ v> >O O a1 ~ U ~ an ~ ~ ~ Q, ~ ~ ~ r ~ ~ ~ ~ M ~ v-, a~ ~ a~ ~ ~o ~ ~ 00 Cd 'Z , ~ ~ O v~ cn l~ ~ l~ 00 vi m 10 O cf'i O ~D ~ O o0 m ~ ~n ~ m m m ~ ~ Lo ~ ~ o0 0 ~n ~ o N oo t~ oo m m ~ 00 ..r ~ ~ v~ O v~ ~ ~ m 0~ ~n N o0 v~ N ~ 10 ~ N ~ ~ O I-I ~ ~ ~ N N ~ ~ ~ U ~ ~ ~ ~ ~ ~ G~ ~ - 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ~ 'd a ~ o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 o U~~ a~ o~ vi ~ vi o o~~ o 0 0 0 0 o vi o Q 4-+ O ~n ~ Ql o ~ ~ ~ a\ m m o ~ oo ~ a\ ~ oo ~ oo ~ O ~ 00 ~ ~ m N ~ ~ 00 ~ l~ m N v~ N 0~ ~ v~ ~ m ~n ~ N ,Z t~ ~ ~ ~ O Q\ ~ Q\ 00 DO ~ ~ ~ ~ V1 ~ ~ M N ~ ~ ~ V ~ ~ ~ ~ N ~ ~ ~ ~ ~ ~ ~ ~ O O ~ N m ~ ~n ~D ~ 00 0~ O N m ~ ~n 10 l~ 00 ~ ~ 'J W ~ ~ M N N N N N N N N N N a ~ ~ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - ~ I-I r~ W N N N N N N N N N N N N N N N N N N N N ~ ~ N cr1 22 TABLE S -INTEREST AND SINKING FUND BUDGET PROJECTION Tax SupportedDebt Service Requirements, Fiscal Year Ending 9/30/2010 $ 17,985,687 Interest and Sinking Fund Balance as of 9/30/09 $ 2,414,288 Interest and Sinking Fund Tax Levy 13,849,894 Budgeted Transfers 4,552,038 20,816,220 Estimated Balance, 9/30/10 $ 2,830,533 TABLE 9 - COMPUTATION OF SELF-SUPPORTING DEBT Net Revenue from Solid Waste System, Fiscal Year Ended 9-30-09 . $ 4,669,981 Less: Solid Waste System Revenue Bond Requirements, 2010 Fiscal Year - Balance Available for Other Purposes $ 4,669,981 Solid Waste System General Obligation Bond Requirements, 2010 Fiscal Year . 2,804,180 Balance $ 1,865,801 Net Revenue from Drainage System, Fiscal Year Ended 9-30-09 $ 2,014,346 Less: Drainage System Revenue Bond Requirements, 2010 Fiscal Year - Balance Available for Other Purposes $ 2,014,346 Drainage System General Obligation Bond Requirements, 2010 Fiscal Year 520,057 Balance $ 1,494,289 Net Revenue from Utility System, Fiscal Year Ended 9-30-09 $ 49,741,757 Less: Utility System Revenue Bond Requirements, 2010 Fiscal Year 28,202,798 Balance Available for Other Purposes $ 21,538,959 Utility System General Obligation Bond Requirements, 2010 Fiscal Year - Balance $21,538,959 TABLE IO -AUTHORIZED BUT UNISSUED GENERAL OBLIGATION BONDS Amount Date Amount Heretofore Unissued Purpose Authorized Authorized Issued Balance Transportation 2/512005 $ 27,700,000 $19,955,100 $ 7,744,900 Parks 2/5/2005 10,700,000 8,110,900 2,589,100 Buildings 2/5/2005 4,000,000 4,000,000 - $ 42,400,000 $ 32,066,000 $10,334,000 ANTICIPATED ISSUANCE of GENERAL OBLIGATION DEBT ...The City anticipates the issuance of $10-$20 million in additional general obligation debt within the next twelve months. TABLE I I -OTHER OBLIGATIONS The City has entered into capital lease agreements. The following is a schedule of future minimum lease payments under these capital leases and the present value of the net minimum lease payments as of September 30, 2009: Year Annual Ending Lease 30-Sep Payment 2010 $ 2,449,826 2011 1,153,251 2012 1,104,907 2013 758,964 2014 758,963 2015-2017 175,490 Total Minimum Lease Payment $ 6,401,401 Less: Amount Representing Interest 470,181 Present Value of Minimum Future Lease Payments $ 5,931,220 23 PENSION FUND ...The City provides pension benefits for all of its full-time employees (except firefighters) through the Texas Municipal Retirement System ("TMRS"), aState-wide administered pension plan. Employees may retire at ages 60 and above with five or more years of service or with twenty years of service regardless of age, and a member is vested after five years. The City makes annual contributions to the plan equal to the amounts accrued for pension expense. In December 2007, the TMRS Board of Trustees approved changes in the actuarial assumptions and funding methodology for all TMRS plans. These changes resulted in higher required contributions and lower funded ratios, and the changes also caused the City's actuarial accrued liability to increase significantly from 2006 to 2007. As of December 31, 2008, the City's unfunded actuarial accrued liability was $72,579,853 and the funded ratio was 62.8%. Beginning in 2009, the City of Denton elected to "phase in" higher contributions to TMRS over a period of eight years in order to recognize the change to a projected unit credit cost method in the 2007 actuarial valuation. By doing so, the City will contribute less than the actuarially determined Annual Required Contribution (ARC), and as such, will need to accrue a net pension obligation of $1,756,341 in FY 2008-09. In subsequent years, this net pension obligation will continue to increase until the full actuarially determined ARC is paid by the City. The phase in period will last eight years from fiscal year 2009 to fiscal year 2016. For more detailed information concerning the TMRS plan as well as the City's historical unfunded actuarial accrued liability for calendar years 2006-2008, see Appendix B, "Excerpts from the City's Comprehensive Annual Financial Report" -Note V.A., page 49 and Exhibit XII, page 61. FIREMEN'S RELIEF AND RETIREMENT FUND ...The City provides pension benefits for firefighters through the Denton Firemen's Relief and Retirement Fund (the "Firemen's Fund"). Firefighters may retire at ages 50 with twenty or more years of service, and a member is vested after ten years of credited service. As of September 30, 2009, there were (i) 60 retirees and beneficiaries receiving benefits and terminated employees entitled to benefits but not yet receiving them, (ii) 72 current employees who were vested and (iii) 93 employees who were not vested. The City made contributions equal to 12% of member salaries for FY 2007- 08 and 14% for FY 2008-09. Beginning in calendar year 2010, the city will provide contributions into the fund at a rate equal to that of the TMRS plan. As of December 31, 2007, the plan's unfunded actuarial accrued liability was $11,654,893 and the funded ratio was 77.9%. For more detailed information concerning the Firemen's Fund as well as the City's historical unfunded actuarial accrued liability for calendar years 2004-2006, see Appendix B, "Excerpts from the City's Comprehensive Annual Financial Report" -Note V.A., page 52 and Exhibit XII, page 61. IMPLEMENTATION OF NEW ACCOUNTING STANDARDS ...GASB released the Statement of General Accounting Standards No. 45 ("GASB 45"), Accounting by Employers for Other Post-Employment Benefits ("OPEB"), in June 2004. The City implemented GASB 45, for the fiscal year beginning October 1, 2007. GASB 45 sets forth standards for the measurement, recognition, and display of post-employment benefits, other than pensions, such as health and life insurance for current and future retirees. Those subject to this pronouncement are required to: (i) measure the cost of benefits, and recognize other post- employment benefits expense, on the accrual basis of accounting over the working lifetime of the employees; (ii) provide information about the actuarial liabilities for promised benefits associated with past services and whether, or to what extent, the future costs of those benefits have been funded; and provide information useful in assessing potential demands on the employer's future cash flows. The employer's contributions to OPEB costs that are less than an actuarially determined annual required contribution will result in a net OPEB cost, which under GASB 45 will be required to be recorded as a liability in the employer's financial statements. In 2008, the City engaged an actuarial firm to prepare an estimate of the City's GASB 451iability as of October 1, 2007. The 2008 report provides the City with the City's OPEB requirements assuming the City's plan offerings, designs, and cost share approach remain constant. The 2008 report estimates the City's accrued liability at $16.2 million for all funds which represents the present value of all future benefits to be provided by the City to current and future eligible (and electing) retirees, less future normal costs and any pre-funded amounts held in trust. Using this same information, the City's annual required contribution is approximately $879,000 for fiscal year 2009. The City's GASB 45 liability was discussed at length with the Audit/Finance Committee and the City Council. At the conclusion of these discussions, the City Council concurred with the staff recommendation to fund the City's OPEB costs on apay-as-you-go basis. The pay-as-you-go approach has been recommended since 1) this provides the lowest cost approach, 2) the ARC is relatively small in comparison to the City's overall budget, and 3) the pay-as-you-go cost is not forecast to exceed the ARC until approximately 2031. A discussion of the New GASB Statements is set forth in the Management Discussion and Analysis and in various notes to the City's financial statements in Appendix B, "Excerpts from the Comprehensive Annual Financial Report", Note V.B. 24 GENERAL OBLIGATION FINANCIAL INFORMATION TABLE IZ - CHANGES IN NET ASSETS Fiscal Year Ended September 30, Revenues: 2009 2008 2007 2006 2005 Program Revenue: Charges for Services $ 14,924,773 $ 13,917,248 $ 13,876,695 $ 13,965,099 $ 11,998,876 Operating Grants and Contributions 2,281,136 3,306,325 2,991,224 3,712,817 2,995,978 Capital Grants and Contributions 3,641,296 7,308,398 5,399,220 5,536,786 7,426,194 General Revenue: Property Tax 43,187,433 41,499,791 34,756,356 30,000,847 26,678,783 Sales Tax 20,466,772 21,440,839 20,653,932 20,343,413 18,998,057 Other Taxes/Fees 17,270,857 17,909,903 16,784,901 17,914,704 16,628,912 Miscellaneous 5,741,097 7,501,310 6,831,875 5,859,560 4,218,245 Total Revenue $107,513,364 $112,883,814 $101,294,203 $ 97,333,226 $ 88,945,045 Expenditures: General Government $ 27,482,131 $ 26,408,949 $ 22,145,804 $ 22,165,661 $ 26,675,799 Public Safety 45,368,783 43,426,526 42,161,674 36,626,635 33,642,445 Public Works 15,816,065 15,448,473 14,008,867 12,485,281 11,986,881 Parks and Recreation 12,755,037 12,927,020 11,564,247 10,497,241 9,912,996 Interest onLong-TermDebt 5,733,268 5,372,868 4,658,128 4,333,428 4,175,466 Total Expenses $107,155,284 $103,583,836 $ 94,538,720 $ 86,108,246 $ 86,393,587 Increase inNet Assets before Transfers $ 358,080 $ 9,299,978 $ 6,755,483 $ 11,224,980 $ 2,551,458 Transfers 846,119 323,038 (13,475,571) 895,106 864,493 Increase (Decrease) inNetAssets $ 1,204,199 $ 9,623,016 $ (6,720,088) $ 12,120,086 $ 3,415,951 Prior Period Adjustment - - - - - NetAssets at Beginning of Year 141,105,566 131,482,550 138,202,638 126,082,552 122,666,601 Net Assets at End of Year (1) $142,309,765 $141,105,566 $131,482,550 $138,202,638 $126,082,552 (1) Preliminary unrestricted net assets, the part of the net assets that may be used to meet the City's ongoing obligations, were $38,252,078 as of September 30, 2009 (see Appendix B, "Excerpts from the Comprehensive Financial Report",page ll). 25 TABLE iZA -GENERAL FUND REVENUES AND EXPENDITURE HISTORY Fiscal Year Ended September 30, Revenues: 2009 2008 2007 2006 2005 Taxes $ 49,769,861 $49,772,244 $ 45,842,915 $41,906,626 $ 37,179,874 Licenses and Permits 1,265,733 1,080,580 1,097,323 1,383,169 1,235,337 Franchise Fee 15,669,981 16,197,042 15,197,943 16,499,994 14,250,484 Fines and Forfeitures 4,691,420 4,969,102 4,468,692 4,639,922 3,959,476 Fees for Service 5,888,390 5,657,673 4,439,570 3,661,522 5,520,074 Interest Revenue 744,122 1,084,097 1,44199 761,159 621,164 Intergovernmental 718,453 779,158 380,887 541,968 629,259 Miscellaneous 229,599 369,052 529,753 447,200 382,494 Total Revenues $ 78,977,559 $79,908,948 $ 73,398,382 $69,841,560 $63,778,162 Expenditures: General Government $ 21,318,437 $18,925,270 $16,142,835 $16,304,027 $18,214,630 Public Safety 41,999,464 39,619,707 36,776,654 35,073,613 32,252,497 Public Works 6,738,327 6,553,570 5,561,166 4,950,734 5,228,666 Parks and Recreation 10,016,114 10,230,800 7,312,078 6,817,078 6,810,881 Capital0utlay 809,004 854,273 2,409,001 281,258 341,958 Debt Service: Principal Retirement 223,106 202,003 41,301 - - Total Expenditures $ 81,104,452 $76,385,623 $ 68,243,035 $63,426,710 $62,848,632 Excess (Deficiency) of Revenues Over Expenditures $ (2,126,893) $ 3,523,325 $ 5,155,347 $ 6,414,850 $ 929,530 Other Financing Sources (Uses): Capital Leases $ 44,865 $ 69,897 $ 1,108,131 $ - $ - Transfers In 112,022 - 5,278,998 579,878 748,065 Sale of Capital Assets - 193,375 - - - Transfers (Out) (612,532) (968,914) (4,038,781) (1,867,799) (1,365,689) Total Other Financing Sources (Uses) $ (455,645) $ (705,642) $ 2,348,348 $ (1,287,921) $ (617,624) Net Changes in Fund Balances $ (2,582,538) $ 2,817,683 $ 7,503,695 $ 5,126,929 $ 311,906 Fund Balances at Beginning of Year 25,377,493 22,559,810 15,056,115 9,929,186 9,617,280 Fund Balances at End of Year $ 22,794,955 $25,377,493 $ 22,559,810 $15,056,115 $ 9,929,186 26 TABLE I3 -MUNICIPAL SALES TAX HISTORY The City has adopted the Municipal Sales and Use Tax Act, V.T.C.A., Tax Code, Chapter 321, which grants the City the power to impose and levy a 1% Local Sales and Use Tax within the City; the proceeds are credited to the General Fund and are not pledged to the payment of the Bonds. Collections and enforcements are effected through the offices of the Comptroller of Public Accounts, State of Texas, who remits the proceeds of the tax, after deduction of a 2% service fee, to the City monthly. In January 1994, the voters of the City approved the imposition of an additional one-half of one percent (1/2 of 1 for property tax reduction. In September 2003, the voters of the City approved the imposition of an additional one-half of one percent of 1%) for the Denton County Transportation Authority. The implementation of this tax began January 2004, and is allocated directly to the Denton County Transportation Authority. Fiscal Year % of Equivalent of Ended 1 112% Total Ad Valorem Ad Valorem Per 9/30 Collected~l~ Tax Levy Tax Rate Capita 2005 $18,998,057 71.81% $ 0.4342 $184 2006 20,343,413 68.86% 0.4248 188 2007 20,653,934 60.26% 0.3796 181 2008 21,440,839 52.53% 0.3521 186 2009 20,466,772 47.50% 0.3253 172 (1) Source: City of Denton Annual Program of Services. The sales tax breakdown for the City is as follows: Property Tax Relief 0.50¢ Denton County Transportation Authority 0.50¢ City Sales & Use Tax 1.00¢ State Sales & Use Tax 6.25¢ Total 8.25¢ FINANCIAL POLICIES Basis of Accounting ...The accounting policies of the City conform to generally accepted accounting principles of the Governmental Accounting Standards Board and program standards adopted by the Government Finance Officers Association of the United States and Canada. The GFOA has awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Denton for each of the fiscal years ended September 30, 1983 through September 30, 2008. The City's current report will be submitted to GFOA to determine its eligibility for another Certificate. The City has also received the GFOA's award for Distinguished Budget Presentation each year since 1988. The measurement focuses for the Enterprise Funds, Internal Service Funds and Nonexpendable Trust Funds are income determination and cost of service, respectively. Accordingly, the accrual basis, whereby revenues and expenses are identified in the accounting period in which they are earned and incurred and net income, is utilized for these funds. The modified accrual basis, whereby revenues are recognized when they become both measurable and available for use during the year and expenditures are recognized when the related fund liability is incurred, is used for all other funds. Budgetary Procedures As prescribed by City Charter the City Manager, and within the time period required by law, submits to the City Council a proposed budget for the fiscal year beginning the following October 1. The budget includes proposed expenditures and revenues required to fund the expenditures. Following Council considerations, amendments and refinements, a public hearing is ordered and conducted for the purpose of obtaining taxpayer comments. The budget is finally approved and adopted by passage of an ordinance by the City Council prior to the beginning of the fiscal year. The budget is adopted on a basis consistent with generally accepted accounting principles. 27 MANAGEMENT OF THE UTILITY SYSTEM The System includes the City's entire existing electric, light and power system and the existing waterworks and sewer system, together with all future extensions, improvements, enlargements and additions thereto. The Public Utilities Board By City Charter, there has been created a Public Utilities Board (the "Board") composed of seven members, appointed by the City Council with the City Manager and the Assistant City Manager of Utilities serving as ex-officio, non-voting members of the Board. The Board serves the Department of Utilities as a consulting and advisory board. The duties of the Board are summarized as follows: 1. Review of the Annual Utility Operating Budget and 5-year Capital Improvements Plan, and the transmission thereof to the City Council. 2. Review of recommended: a. expansion of, additions to, betterment of, or extensions to the System; b. incurring of debt; c. issuance of bonds and d. establishment of rates and charges. All actions of the Board are subject to final approval of the City Council. Management of the System ...The System is managed by the Assistant City Manager of Utilities, who is responsible to the City Manager. The System is organized into three major services, Electric, Water and Wastewater, and consists of approximately 373 employees. In addition, within Utility Administration, there are various administrative staff and financial administration responsibilities. The Electric Utility is composed of twelve main divisions: 1. Electric Power Supply Administration, 2. Electric Wholesale Power, 3. Electric Operations, 4. Electric Dispatch, 5. Electric Distribution, 6. Electric Substations, 7. Electric General Operations Administration, 8. Electric Engineering, 9. Electric Metering, 10. Electric Administration, 11. Electric Community Relations, and 12. Safety & Training. The Water/Wastewater Utilities are composed of six main functional areas, which are divided into twelve divisions, each of which is headed by a division manager. The six functional areas include: 1. Water Production, 2. Water/Wastewater Field Services, 3. Wastewater Treatment Plant, 4. Municipal Laboratory, 5. Drainage, and 6. Engineering Services. The System utilizes the services of the City's Finance Department for accounting, customer service, purchasing and warehousing. The System also utilizes various administrative departments of the City for its personnel, and information technology needs. UTILITY RATES It is the City's policy to review electric, water and wastewater rates on an annual basis to assure adequacy and equity. Independent consultants are used periodically, with City staff completing the work in house during the interim. Rate recommendations are submitted by the staff to the Board for review and approval, which then forwards a recommendation to the City Council for final approval. To date, the City Council has approved all rate recommendations of the Board. 28 THE ELECTRIC SYSTEM INTRODUCTION ...The City has owned and operated its electric light and power system (the "Electric System") since 1905. In order to secure access to a long-term baseload electric generating facility, the Cities of Bryan, Denton, Garland and Greenville, Texas created the Texas Municipal Power Agency ("TMPA") in 1975. TMPA is a joint power agency without taxing power, and a separate municipal corporation and political subdivision of the State that operates in accordance with Chapter 163, Texas Utilities Code, as amended. (See "The Electric System -The TMPA Power Sale Agreement" below and "Appendix D - Description of Senate Bill 7 and the Texas Municipal Power Agency -Texas Municipal Power Agency.") TMPA owns the Gibbons Creek Steam Electric Station ("Gibbons Creek"), acoal-fired generating plant located in Grimes County, Texas, which has a net generating capacity of 470 megawatts ("MW"). The City's contractual right to TMPA's generation represents approximately 100 MW, or approximately 31% of the City's projected 2010 peak system-wide demand. The City's rights and obligations relative to TMPA are set forth in the TMPA Power Sales Agreement between TMPA and the Member Cities. In June 2001, the City sold its uneconomical generating units, having a capacity of 178 MW, and entered into afive-year power purchase agreement (the "2001 Power Purchase Agreement") with PG&E Energy Trading -Power, L.P. ("PG&E") which was subsequently assigned by PG&E to Constellation Power Source, Inc. Effective November 1, 2004, Constellation Power Source, Inc. became known as Constellation Energy Commodities Group, Inc. ("Constellation Commodities Group"). The 2001 Power Purchase Agreement expired on June 29, 2006. On May 16, 2006, the City Council approved a new 5 year agreement with Constellation Commodities Group (the "2006 Power Purchase Agreement"), the term of which begins on June 30, 2006 and expires on June 30, 2011 unless terminated prior to that date as permitted under certain exceptional circumstances set forth in the 2006 Power Purchase Agreement. See "The Electric System -Electric System Challenges and Responses -Power Purchase Agreements." The Electric System, like all other municipal electric systems in the State, is presently functioning as a traditional electric utility, supplying all aspects of electric service to its customers. Senate Bill 7 adopted by the Texas Legislature (the "Legislature") in 1999 ("Senate Bill 7" or "SB 7") provides for open competition in the provision of retail electric service in the State, which competition commenced on January 1, 2002 in the part of the State that is within the service area of the Electric Reliability Council of Texas ("ERGOT"). The City is located in the ERGOT service area. Under SB 7, municipally-owned utilities ("MOUs"), like the Electric System, are not required to participate in the competitive retail market, although they may "opt in" to retail electric competition. To date, no MOU in ERGOT has opted in to competition, and under the statutory scheme of SB 7 any decision by a MOU to opt in is irrevocable. To date, the City Council has decided not to open the City to retail electric competition based on various technical and financial analyses. The most recent comprehensive assessment of the City's options with respect to retail electric competition was made in January 2004. The assessment described issues that would need to be addressed by the City Council in the event that it or a future Council should be disposed toward opting in to retail competition; certain of the issues would affect all options available to the City, while other issues would apply only in selected scenarios. The report identified a number of risks and uncertainties associated with opting in to retail electric deregulation, but concluded that the largest single issue is the City's ability to pay its TMPA obligations. The City's TMPA contract requires each Member City to approve certain changes affecting the consortium, and the City is contractually obligated to pay its portion of TMPA fixed costs through at least 2018, which provides the prospect of potentially large "stranded costs" for the City (see "The Electric System -The TMPA Power Sale Agreement"). Other factors noted in the report include additional costs that would be borne by the City in connection with technology upgrades needed to accommodate multiple retail energy providers if the Electric System were to opt to remain as the sole transmission and distribution utility in the City, as is permitted by SB 7. Today, the issues surrounding the opt in decision remain the same as those identified in the 2004 report. While SB 7 generally deregulates the retail sale of energy in the State, SB 7 maintains the existing regulated structure with respect to electric transmission and distribution services in the State. The Public Utility Commission of Texas (the "PUG") has approved wholesale electric market design changes in ERGOT that move the ERGOT wholesale power market from a zonal market to a nodal market. Under the nodal market, transmission congestion is addressed by including in the cost of wholesale power a component known as "transmission congestion rent," the result being that the cost of wholesale power delivered to loads located in zones with greater transmission congestion will be higher than the cost of wholesale power in zones having less transmission congestion. The nodal market design thus uses location sensitive, or nodal, cost methodology to address transmission congestion. The new market design is expected to result in a more efficient use of generation and transmission resources as well as provide clearer price signals to generators for locating new power generation plants. Implementation of the nodal market design is slated for December 2010. The move to the nodal market will dramatically alter the wholesale market design in ERGOT. However, for the reasons discussed below, Electric System Management is of the view that the Electric System is positioned to continue to participate in the distribution of energy within the City's service area, which in recent years has experienced strong growth trends, particularly with respect to energy sales to the City's primarily residential customer base. 29 TABLE I4 -HISTORICAL ELECTRIC SYSTEM OPERATING AND FINANCIAL DATA The table below sets forth certain operating and financial data with respect to the Electric System for each of the five most recently completed fiscal years. Average Number of Monthly Year Ended September 30, Customers by Service Classification 2009 2008 2007 2006 2005 Residential 39,895 39,185 38,418 37,148 36,699 Commercial and Industrial 4,771 4,679 4,604 4,490 4,574 Other 487 511 585 548 573 Total 45,153 44,375 43,607 42,186 41,846 Annual Megawatt Hours Sales by Service Classification Residential 496,669 509,980 466,135 478,491 443,400 Commercial and Industrial 760,688 786,121 767,369 770,098 735,225 Other 33,329 33,811 34,633 39,284 39,873 Subtotal 1,290,686 1,329,912 1,268,137 1,287,873 1,218,498 Sales for Resale - - - - - TotalSales 1,290,686 1,329,912 1,268,137 1,287,873 1,218,498 Loss and Unaccounted 56,250 59,198 57,787 54,734 64,231 TotalMWto System 1,346,936 1,389,110 1,325,924 1,342,607 1,282,729 Loss and Unaccounted 4.36% 4.45% 4.39% 4.05% 4.86% Annual Revenue by Service Classification in Thousands) (1) Residential $ 50,248 $ 53,606 $ 47,383 $ 54,005 $ 48,193 Commercial and Industrial 63,791 67,076 62,570 73,612 64,929 Other 4,546 4,625 4,626 5,670 5,307 Total $ 118,585 $ 125,307 $ 114,579 $ 133,287 $ 118,429 Analysis of Electric Billing Residential Customers Avg.MonthlyBillperCustomer $ 125.95 $ 111.93 $ 123.33 $ 145.38 $ 131.32 Avg. Monthly kWh per Customer 1,245 1,007 1,213 1,289 1,208 Avg. Monthly Cents per kWh 10.12 10.34 10.17 11.28 10.87 Commercial and Industrial Customers Avg. Monthly Bill per Customer $ 1,337.07 $ 1,433.56 $ 1,359.03 $ 1,639.46 $ 1,419.52 Avg. Monthly kWh per Customer 15,944 16,801 16,667 17,151 16,074 Avg. Monthly Cents per kWh 8.3 9 8.53 8.15 9.56 8.83 Capacity and Energy Mix (roundedto nearestMW) Capacity Owned Capacity (MW) - - - - - Firm Purchase (MW) - TMPA 100 99 98 98 98 Firm Purchase (MW) -Other 275 262 254 248 242 Total 375 361 352 346 340 Annual PeakDemand 313 307 308 319 299 Energy Owned Capacity (MWH) - - - - - Firm Purchase (MWH) - TMPA 760,345 770,005 729,502 759,484 737,839 Firm Purchase (MWH) -Other 586,591 619,105 596,422 583,123 544,890 Total 1,346,93 6 1,389,110 1,325,924 1,342,607 1,282,729 (1) Changes in revenue from period to period is attributable in large part to change in the cost of fuel during the respective period, and the resulting changes made by the City in the energy cost adjustment ("ECA") factor of the System's electric rate schedules. The ECA is adjusted to recover the cost associated with purchased power. The ECA is a pass through of fuel cost to Electric System Customers. The average ECAs for fiscal years 2005, 2006, 2007, 2008 and 2009 were $0.0465IKWh, $0.0688/KWh, $0.0343/KWh, $0.0423/KWh and $0.397IKWh, respectively. 30 TABLE 1S-CURRENT ELECTRIC RATE SCHEDULES Approximately 97% of the Electric System customers are billed under the rate schedules summarized below. Special rate schedules are available for customers with unique load curves such as city street lighting, etc. Residential Service Rate (Effective October 1, 2009) APPLICATION Applicable to any Customer for all electric service used for residential purposes in an individual private dwelling or an individually metered apartment, supplied at one point of delivery and measured through one meter. This rate is not applicable to resale service in any event, or to temporary, standby, or supplementary service. NET MONTHLY RATE WIN TER SUMMER Billing months of Billing months of November through April May through October (1) Facility Charge Single-Phase $ 8.25/bill $ 8.25/bill Three-Phase $16.50/bill $16.50/bill plus; (2) Energy Charge per billing period First 600 kWh 5.70¢/kWh Additional kWh 3.79¢/kWh All kWh 5.70¢/kWh plus; (3) Energy Cost Adjustment Charge See Schedule ECA See Schedule ECA MINIMUM BILLING For each billing period, the Customer shall be obligated to pay the following charges as a minimum, whether or not any energy was actually used: Single-Phase Facility Charge Three-Phase Facility Charge General Service Small (Effective October 1, 2009) APPLICATION The General Service Small (GSS) rate is applicable to any commercial or industrial customer having a maximum demand of less than 20.9 kW in each of the previous twelve (12) months for all electric service supplied at one point of delivery and measured through one meter. If the demand in any month exceeds 20.9 kW, billing will be made under the Rate Schedule GSM and Customer must remain on the GSM rate for a minimum of twelve (12) billing periods. This rate is not applicable to resale service in any event, or to temporary, standby, or supplementary service. (1) Facility Charge Single-Phase $15.8 0/bill Three Phase $21.10/bill plus; (2) Energy Charge per billing period First 2,500 kWh 7.02¢/kWh Additional kWh 3.67¢/kWh plus; (3) Energy Cost Adjustment Charge See Schedule ECA MINIMUM BILLING For each billing period, the Customer shall be obligated to pay the following charges as a minimum, whether or not any energy was actually used: Single-Phase Facility Charge Three-Phase Facility Charge 31 General Service Medium (Effective October 1, 2009) APPLICATION The General Service Medium (GSM) rate is applicable to any commercial or industrial customer having a maximum demand of at least 21 kW in any one of the previous twelve (12) months but less than 250 kVA in each of the previous twelve (12) months for all electric service supplied at one point of delivery and measured through one meter. This rate is not applicable to resale service in any event, or to temporary, standby, or supplementary service. NET MONTHLY RATE (1) Facility Charge Single-Phase $15.8 0/bill Three Phase $21.10/bill plus; (2) Demand Charge $4.00/kW (all kW) plus; (3) Energy Charge per billing period First 6,000 kWh 4.43¢/kWh Additional kWh 3.66¢/kWh plus; (4) Energy Cost Adjustment Charge See Schedule ECA MINIMUM BILLING For each billing period, the Customer shall be obligated to pay the following charges as a minimum, whether or not any energy was actually used: (1) The Facility Charge plus; (2) The Demand Charge DETERMINATION OF DEMAND The demand used in calculating the Demand Charge for the billing period shall be the greater of: (1) the actual monthly kW demand as measured during the fifteen (15) minute period of maximum use each month; or (2) seventy percent (70%) of the maximum monthly actual demand for any month during the previous billing months of May through October in the twelve (12) months ending with the current month. General Service Lame (Effective October 1, 2009) APPLICATION The General Service Large (GSL) Rate is applicable to any commercial or industrial customer having a minimum actual demand of 250 kVA for all electric service supplied at one point of delivery and measured through one meter. Customers other than commercial and industrial may be allowed service under this rate, subject to the minimum billing provision. Customers who elect to discontinue service under this rate are ineligible for service under this rate for twelve months. This rate is not applicable to resale service in any event, or to temporary, standby, or supplementary service. NET MONTHLY RATE (1) Facility Charge $65.55 /bill plus; (2) Demand Charge $9.33/kVA (Minimum of 250 kVA billed) plus; (3) Energy Charge per billing period First 200,000 kWh 2.14¢/kWh Additional kWh 1.21¢/kWh plus; (4) Energy Cost Adjustment Charge See Schedule ECA 32 MINIMUM BILLING For each billing period, the Customer shall be obligated to pay the following charges as a minimum, whether or not any energy was actually used: (1) The Facility Charge plus; (2) The Demand Charge DETERMINATION OF DEMAND The demand used in calculating the Demand Charge for the billing period shall be the greater of: (1) the actual monthly kVA demand as measured during the fifteen (15) minute period of maximum use each month; or (2) 250 kVA; or (3) seventy percent (70%) of the maximum monthly kVA actual demand for any month during the previous billing months of May through October in the twelve (12) month period ending with the current month. Energy Cost Adjustment (Effective February 2, 2010) The Energy Cost Adjustment (ECA) rate shall be set by the Public Utilities Board. The ECA rate shall be reviewed on a monthly basis and adjusted as defined below to recover the variable cost of energy delivered to customers. Variable energy cost includes the variable cost of Texas Municipal Power Agency (TMPA) energy (excluding the portion of TMPA's energy charge associated with fixed costs), the variable cost of purchased energy (excluding demand payments or fees for services), and fuel costs. ENERGY COST ADJUSTMENT BALANCING ACCOUNT CALCULATION The ECA Balancing Account shall be calculated using the following formula: ECA Balancing Account = (Actual plus Projected ECA revenue) - (Projected Energy Cost) Where: Projected Energy Cost = (Actual plus Projected cumulative cost of fuel) +(Actual plus Projected cumulative variable cost of TMPA energy) + (Actual plus Projected cumulative variable purchased energy cost). The Director of Electric Utilities or his/her designee shall calculate the ECA Balancing Account balance monthly. In the event that the ECA Balancing Account balance calculated during the last month of each fiscal quarter (December, March, June, and September) is greater than or less than zero dollars ($0) by $5,000,000 or more during the next quarter, the Electric Utility Director or his/her designee shall recommend to the Public Utilities Board an ECA rate adjustment sufficient to recover/return any under/over collection, and maintain DME in a financially sound position. The Public Utilities Board shall consider that recommendation and may adjust the ECA rate for the quarter immediately following as necessary to maintain DME in a financially sound position. ENERGY COST ADJUSTMENT CALCULATION ECA =[(Projected Energy Cost) + (ECA Balancing Account)]/(Projected kWh sales) ENERGY COST ADJUSTMENT CHARGE The Energy Cost Adjustment Charge shall be based on actual kWh consumption during the billing period. Energy Cost Adjustment Charge = kWh x ECA rate EXTRAORDINARY CIRCUMSTANCE ECA RATE ADJUSTMENT In the event that the ECA Balancing Account balance calculated for any month is greater than or less than zero dollars ($0) by $10,000,000 or more during the next month, the Electric Utility Director or his/her designee shall recommend to the Public Utilities Board an ECA rate adjustment sufficient to recover/return any under/over collection, and maintain DME in a financially sound position. The Public Utilities Board shall consider that recommendation and may adjust the ECA rate for the month immediately following as necessary to maintain DME in a financially sound position. END OF THE FISCAL YEAR ADJUSTMENT At the end of each fiscal year, if the amount of the ECA Balance exceeds $5,000,000, then the Board shall consider whether or not any amount of the ECA balance over $5,000,000 should be transferred to the Rate Stabilization Fund to be used for customary Rate Stabilization Fund purposes or for paying down the City of Denton's debt related to the TMPA. For Fiscal Year 2009-10, the quarterly ECA rates have been set at $0.300/kWh for the first quarter and, $0.300/kWh for the second quarter. 33 MANAGEMENT OF THE ELECTRIC SYSTEM ...The Board serves the City's Department of Utilities as a consulting and advisory board. All actions of the Board are subject to final approval of the City Council. The General Manager, Denton Municipal Electric manages the Electric System with responsibility for wholesale power supply, distribution, engineering, substations, community relations, metering, planning and safety operations. The staff of the Electric System includes approximately 129 full-time and part-time professional and administrative staff. THE ELECTRIC SYSTEM BUSINESS PLAN Although there are many evolving issues concerning retail electric competition in the State and potential changes from the upcoming nodal market implementation, the Electric System has identified and implemented a business strategy, which is described below, designed to permit the City to accommodate its long-term contractual commitment to purchase energy from TMPA, while positioning the Electric System for flexibility. In accordance with its strategy, the City has taken a number of steps in connection with the changing market, including, in particular, the transactions described under "The Electric System -Electric System Challenges and Responses -Power Purchase Agreements." Due to changes effected by SB 7, as well as the implementation of a nodal market environment, the City's strategies must continue to evolve with new market developments, including the impact on the City's electric customers of increased fuel costs, and regulatory and legal developments that affect the operations of the Electric System and ERGOT market. To the extent permitted by City resources, the City monitors Federal and State legislative and regulatory actions for the purpose of observing and influencing, to the extent possible, developments that could affect the operations of the Electric System and the options of the City relative to the Electric System. The current Electric System business plan generally provides that the electric facilities owned by the City will be transmission and distribution facilities, which provide a return on investment, whether or not the City Council elects to open the City to full retail electric service competition. This Electric System business plan was implemented in anticipation of the restructuring of the Texas energy market that occurred in 2002 in accordance with SB 7 and receives periodic review and revision when necessary. This plan was implemented to provide the City with a relatively safe cash flow from the Electric System transmission and distribution business, which is not subject to competition, even under a retail deregulation scenario, while reducing risk to the City of holding unneeded generation capacity in the event the City Council should elect to open the Electric System's service territory to retail power competition. In addition, it is the City's policy to bond-finance transmission and distribution facilities, which permits the City to amortize the cost of such facilities over a period that approximates the useful life of the facilities. The City anticipates that it will continue tobond-finance such facilities using relatively low-cost tax-exempt debt. See "The Electric System -Capital Improvement Plan and Additional Debt." Principal policy initiatives that have been pursued in light of the enactment of SB 7 include the City's sale of its obsolete generating assets in 2001 and replacement of those assets with capacity and energy through power supply and management contracts. In entering into the 2001 Power Purchase Agreement and the 2006 Power Purchase Agreement (collectively with the 2001 Power Purchase Agreement, the "Power Purchase Agreements"), the City has augmented the energy it is obligated to purchase from TMPA with energy purchased under the agreements, which represents approximately 50% of the City's energy purchases. The 2006 Power Purchase Agreement, together with the energy to be purchased under the TMPA Power Sales Agreement means that the City has established energy supply agreements for all of its requirements through June of 2011, which will extend beyond the inauguration of ERCOT's nodal market. The City anticipates that any increased cost for energy delivered from TMPA as a result of the nodal market will be limited, at least in the short-term, due to (1) the fact that Gibbons Creek is presently located in the same "load zone" as the Electric System, and under the nodal market design charges to loads will be based on the average zone cost and (2) the nodal market protocols adopted by the PUC provide for "preassigned congestion revenue rights" for delivery of Gibbons Creek energy to the City in the event the present zone configuration is changed in a way that places Gibbons Creek in a different zone from the Electric System, which could result in additional congestion costs being borne by the City. Additionally, the 2006 Power Purchase Agreement provides the City greater certainty with respect to energy price and services for its non-TMPA energy purchases due to the fact that the contract terms extend beyond the implementation date of the nodal market. The ERGOT wholesale market, from which all retail energy providers ("REPS") serving retail customers in ERGOT purchase their power, has evolved into a market that is priced largely on the marginal generation cost in ERGOT, which is natural gas fueled combined cycle generation, regardless of the generation source. The Electric System's ability to provide 50% of its customer's energy requirements at actual cost of service from a coal fired plant, with the remaining power supply coming from the same wholesale market that serves deregulated REPS, has helped to offset the fixed cost associated with TMPA debt payments. This resource mix, combined with selective use of a rate stabilization fund, which was established in 1996 (the "Rate Stabilization Fund") to address the TMPA debt and competitive issues, have to date allowed the Electric System to maintain rates that are competitive with the rates available in the deregulated areas of ERGOT, even after base rate increases were implemented by the Electric System in January and October of 2005 (see "The Electric System -Electric System Challenges and Responses -Rate Study and the Rate Stabilization Fund"). Based on these considerations, Electric System Management does not expect that potential competitors would be able to substantially undercut the City's electric service rate to residential or commercial customers, although large load, industrial customers could be aggressively recruited by potential competitors. Presently, the City's customer base is only 11% industriaUcommercial in composition, based upon the number of customer accounts, although for the year ended September 30, 2009, approximately 59% of the City's energy sales were generated by 34 commercial and industrial customers. It is possible that competitors could use factors other than price in efforts to obtain such customers, which generally use significantly more energy than do residential customers. ELECTRIC SYSTEM CHALLENGES AND RESPONSES ...The Electric System is committed to maintaining its electric rates at levels that are competitive with other retail electric providers. In the view of Electric System Management, among the most significant challenges facing the Electric System are those arising from the City's long-term power purchase agreement with TMPA, under which the City is obligated to purchase or pay for 21.3% of TMPA's fixed costs, including debt service, as well as TMPA's variable costs relating to the energy that the City takes from TMPA. Depending upon the relative cost of natural gas and coal, and owing to the relatively high debt service requirements of TMPA, the total TMPA energy cost from time to time may be above market (i. e., a "stranded cost"). Over the past several years, natural gas prices have generally had a sustained upward trend, with increasingly extreme price volatility. As a result, TMPA's coal-generated energy costs have been attractive relative to gas-generated energy in the ERGOT market, particularly during times when demand for energy in ERGOT is high. (See "Appendix D -Description of Senate Bill 7 and the Texas Municipal Power Agency -Texas Municipal Power Agency - Outstanding Debt.") In the event that the City should open its service area to retail competition, the Electric System could and likely would seek to recover any stranded costs represented by the TMPA power purchase agreement through the use of the nonbypassable competitive transition charge that SB 7 allows municipal electric utilities to place on their distribution rates. Other significant challenges confronting the Electric System for the future include issues arising from the continued development of the wholesale and retail energy markets within ERGOT, Competitive Renewable Energy Zones (CREZ) transmission constraints and construction projects that may affect the cost of energy delivered to the City, environmental compliance and political considerations that could affect the City's "opt in" decision. Measures Relating to TMPA. As of December 17, 2009, all of the pending lawsuits involving TMPA and the Member Cities have been settled. The Settlement Agreement, which was approved by the four City Councils of the Member Cities and the Board of TMPA, involves the dismissal with prejudice of three related State District Court cases and seventeen PUC proceedings in the next several months. These dismissals provide for a settlement of all of the parties' claims. Denton has not paid and is not paying any monetary amount to the City of Bryan, Texas or to any other party in the litigation as consideration for the settlement and ultimate dismissal of the various lawsuits and PUC proceedings. The Settlement Agreement will be effected over the next several months by each of the Member Cities by executing dismissal pleadings of the various suits and proceedings, and the issuance of bonds which will be accomplished by each of the four TMPA Member Cities, in order to provide for the refunding of certain TMPA debt obligations in accordance with their respective percentage shares, as are currently stated in the TMPA Power Sales Agreement (see "PLAN OF FINANCING"). The City has determined that the above-referenced litigation is pending fmal disposition and dismissal and that there is no adverse outcome to the City predicted. See "OTHER INFORMATION-Litigation" for additional information regarding the TMPA litigation. TMPA has reduced its operation and maintenance expenses in recent years through certain measures. Electric System Management believes that the variable costs of TMPA energy are likely to be competitive for the foreseeable future. However, the City's share of TMPA's fixed costs, particularly its debt service requirements, could result in the total cost of the City's purchased power from TMPA exceeding the cost of power that is marketed within ERGOT until September, 2018 (See "Appendix D -Description of Senate Bill 7 and the Texas Municipal Power Agency -Texas Municipal Power Agency. The City's plan is to utilize the Rate Stabilization Fund to offset these increased debt service requirements related to TMPA and, if needed, increase base rates until the TMPA debt is paid in September, 2018.As described under "The Electric System -The TMPA Power Sale Agreement," a series of amendments to the TMPA Power Sales Agreement made during 1997 provide flexibility to the Electric System, while at the same time establishing a firm percentage obligation for the Electric System with respect to its TMPA payment obligations. Except as described below under "The TMPA Power Sale Agreement -The Debt Service Guarantee Percentage," under the 1997 amendments to the TMPA Power Sales Agreement, the City has a fixed obligation to pay for 21.3% of TMPA's annual system costs, including the payment of TMPA's debt service requirements and operating and maintenance expenses and, in connection with such obligation, the City is entitled to receive the same percentage of TMPA's available output of energy. The 1997 amendments to the TMPA Power Sales Agreement also repealed provisions of the TMPA Power Sales Agreement that had prohibited the Member Cities from purchasing energy from others or from constructing new generating facilities of their own. Prior to the 1997 amendments, the Member Cities were, in effect, acting as a consortium for all power production and off system energy sales. As described below under "The Electric System -Electric System Challenges and Responses -The 2006 Power Purchase Agreements" and Renewable Energy Purchase Agreement" the Electric System has taken advantage of this flexibility to act independently from the other Member Cities in connection with the sale in 2001 of obsolete generation units and by negotiating the Power Purchase Agreements. As described below under "The Electric System -The TMPA Power Sale Agreement -Rebate of Excess Revenues to the Member Cities," the 1997 amendments also require that TMPA annually rebate to each Member City its proportionate share of TMPA revenues that are in excess of the amount needed by TMPA to pay its operating costs and to meet its debt service requirements. The City has deposited these rebates into the Rate Stabilization Fund. See the discussion of the Rate Stabilization Fund below. 35 The 2006 Power Purchase A ~e._ e~ment.... On May 16, 2006, the City Council approved the 2006 Power Purchase Agreement with Constellation Commodities Group. Under the 2006 Power Purchase Agreement, Constellation Commodities Group is obligated to supply all the capacity and energy requirements of the City above those supplied from the City's existing purchased power agreement with TMPA (see "The Electric System -The TMPA Power Sale Agreement"). All energy resources of the City during the term of the 2006 Power Purchase Agreement, including power supplied to the City under the TMPA Power Sale Agreement, will be delivered to the City in accordance with the terms of the 2006 Power Purchase Agreement at points of delivery located within the City. In addition to supplying the City's energy in excess of the City's TMPA allocation, the 2006 Power Purchase Agreement requires Constellation Commodities Group to perform certain ancillary services for the City that are necessary to permit the City to receive energy from the ERGOT power grid. Such services include scheduling and dispatch of energy. Given the nature of ERGOT as a closed grid with few interconnections with other power grids, energy supplied to the City by Constellation Commodities Group that are in excess of amounts supplied from the City's TMPA power supply agreement must be generated from other resources within ERGOT. The City is obligated to give Constellation Commodities Group notice each day of the City's energy requirements for the next day, which requirements are required to be supplied to the City from a combination of energy taken from TMPA and other energy supplied by Constellation Commodities Group. The cost to the City of energy provided to the City under the 2006 Power Purchase Agreement in excess of that delivered to the City from its TMPA resource is not fixed, but will vary from time to time depending upon a number of factors, including the cost of fuel and energy transmission. The City has the right under the agreement to hedge its natural gas fuel requirements for energy supplied by Constellation Commodities Group. The obligations of Constellation Commodities Group under the 2006 Power Purchase Agreement have been secured and/or guaranteed within certain limits by Constellation Energy Group, Inc. and under certain extraordinary conditions described in the 2006 Power Purchase Agreement, the City is obligated to provide additional collateral to secure its payment obligations. As is the case with the TMPA Power Sales Agreement, the City's payment obligations under the 2006 Power Purchase Agreement will constitute an operating and maintenance expense of the System. Constellation Commodities Group is a Delaware corporation and awholly-owned subsidiary of Constellation Energy Group, Inc., the shares of which trade on the New York Stock Exchange. Constellation Commodities Group is the wholesale energy operation of Constellation Energy, a Fortune 200, integrated energy company. Renewable Ener~y Purchase A e._ e.~.... NextEra Energy Resources, LLC ("NextEra"). NextEra owns and operates the Wolf Ridge Wind Farm located northwest of Muenster, Texas and is the largest generator of wind and solar renewable energy in North America. Beginning May 1, 2009, NextEra began selling green energy (60 Megawatts) to DME to supply its customers' long-term power needs and meet the utility's renewable energy objectives. A portion of the sale proceeds will be directed to NextEra's EarthEra Renewable Energy Trust, where 100 percent of the trust will be used to build new renewable generation facilities. With this purchase, the Electric System will provide more wind energy per capita than any other city in the United States. Rate Study and the Rate Stabilization Fund. In 1996, the City established the Rate Stabilization Fund by transferring approximately $45.1 million from the unreserved fund balances of the Electric System. In general, the Rate Stabilization Fund was created to serve as a reserve that could be drawn upon, at least in part, in lieu of increasing electric rates in the full amount required to provide funding to pay the cost of purchased power from TMPA as the amount of TMPA debt service (and thus the City's contract payments) increases. At September 30, 2009, the City had approximately $55.5 million on deposit in the Rate Stabilization Fund, which included approximately $1.5 million contributed to the Rate Stabilization Fund in Fiscal Year 2009 from Electric System operations. Approximately $7.2 million is expected to be utilized from the Rate Stabilization Fund in 2010. The use of the Rate Stabilization Fund is part of the City's business plan to maintain competitive electric rates after the advent of SB 7. Effective January 1, 2005, the City increased the base rates charged to its residential and general service customer classes. A base rate increase was implemented effective October 1, 2005 for the Government, Temporary Service, Weekend, Athletic Fields, and Lighting customer classes. The City's rates, including the 2005 rate increases, remain competitive with North Texas retail energy providers presently marketing in the Dallas-Fort Worth area. Management Review. Under The City charter, each City utility is required to undergo a management review, conducted by an outside consultant, every ten years. For purposes of the Electric System review, the City contracted with Navigant Consultants Inc. ("NCI") to perform such a review. NCI completed it's report and presented results to the Board and City Council in 2008. While the report did not imply any material weaknesses, based on the NCI recommendations, the City has implemented or in process of implementing improvements in various areas of operations. Marketing. In light of the increased levels of electric market advertising, particularly by retail energy providers, the Electric System has instituted a campaign to raise the awareness of its customers of the services it offers, and to reinforce in the minds of its customers that the City provides the same or better level of service and service options as are available in the deregulated market. To this end, the City initiated a greensense energy program for its customers. A marketing program to effectively solicit new customers, cultivate and reinforce customer loyalty, and improve and expand available services to customers is in place. The marketing program targets key large commercial and industrial customers and promotes various energy efficiency programs across all rate classes. 36 THE TMPA PowER SALE AGREEMENT ...The City's rights and obligations with respect to TMPA are set forth in the TMPA Power Sales Agreement. Under the TMPA Power Sales Agreement, the City is obligated to take or pay for its percentage share of the energy generated by TMPA, and TMPA is obligated to devote its best efforts to the generation and delivery of energy from the generating facilities of TMPA, but the failure of TMPA to provide energy under the TMPA Power Sales Agreement will not relieve any Member City of its obligations under the TMPA Power Sales Agreement, as such obligations are unconditional and absolute. The City's payment obligations under the TMPA Power Sales Agreement are equal to the greater of the "Take or Pay Percentage" (as defined below) and the "Debt Service Guarantee Percentage" (as defined below). For additional information regarding TMPA, see "Appendix D -Description of Senate Bill 7 and the Texas Municipal Power Agency -Texas Municipal Power Agency." The Take or Pay Percenta~. Under the TMPA Power Sales Agreement, each of the Member Cities is unconditionally obligated to pay to TMPA, without offset or counterclaim and without regard to whether energy is delivered by TMPA to the Member Cities, their percentage of TMPA's annual system costs, including the payment of TMPA's debt service requirements and operating and maintenance expenses, as set forth below: City of Bryan, Texas 21.70% City of Denton, Texas 21.30% City of Garland, Texas 47.00% City of Greenville, Texas 10.00% A City may choose to take or not take energy from the TMPA generating assets, as it sees fit (as noted above, while the City's TMPA resources have represented approximately one-third of the City's firm power capacity in recent years, the City has averaged taking approximately 50% of its energy from TMPA in recent years). While the City is obligated to pay its fixed percentage of the annual system costs, it becomes obligated to pay the variable costs of generating energy only to the extent that it actually takes energy from TMPA. The Debt Service Guarantee Percentage. In any instance where TMPA's bond, reserve fund and contingency funds created by the resolutions under which TMPA has issued its outstanding first lien revenue bonds (the "TMPA Prior Lien Resolution") are not funded to the amount then required to be on deposit therein, without giving consideration to transfers made from funds other than TMPA's revenue fund or from proceeds of its bonds (provided that transfers may be made from TMPA's reserve fund to its debt service fund for not more than two (2) consecutive calendar months), the Member Cities are obligated to make their percentage share of a payment to TMPA in the amount that is necessary to establish or reestablish the amount then required, under the terms of the TMPA Prior Lien Resolution, to be on deposit in such funds. The percentage share of the payment to be made by each Member City under the TMPA Power Sales Agreement is determined by calculating the percentage relationship that each Member City's Net Energy for Load (as defined in the TMPA Power Sales Agreement) for the contract year immediately preceding the contract year in which the calculation is being made to the total aggregate Net Energy for Load of all Member Cities for such contract year, and the sum of the adjusted percentages shall equal 100%. Allocation o Enemy TMPA. Each Member City shall be entitled to schedule and receive, each month for its own account, the proportion of the available energy from TMPA's generation facilities equal to the Take or Pay Percentage, as such percentage may be from time to time adjusted in accordance with the provisions of the TMPA Power Sales Agreement. TMPA Power Sales Agreement Term. The contract term of the TMPA Power Sales Agreement isfor aperiod ofthirty-five years from September 1, 1976 or until all bonds and certain other indebtedness of TMPA is paid, whichever occurs later. At present, the final maturity of TMPA's indebtedness is September 1, 2018, although it is possible that TMPA could restructure its debt to shorten the schedule of its debt retirement. The Settlement Agreement generally prohibits the extension of TMPA debt beyond September 1, 2018 without the approval of all the Member Cities (see "Appendix D -Description of Senate Bill 7 and the Texas Municipal Power Agency -Texas Municipal Power Agency"). Construction of New Proms. There are no current plans for TMPA to initiate a new generation project. TMPA is constructing new transmission projects in accordance with transmission system expansion plans developed through the ERGOT regional transmission planning process. TMPA is currently refurbishing a scrubber to control emissions of sulphur dioxide and mercury at its Gibbons Creek Steam Electric Station (see "PLAN OF FINANCE"). Under the terms of the Settlement Agreement, future financing necessary for the operations of TMPA other than certain transmission debt may only be in the form of debt issued by each of the Member Cities in the same manner as for the Scrubber Project and in the amount of each Member City's proportionate share under the TMPA Power Sales Agreement (see "Appendix D -Description of Senate Bill 7 and the Texas Municipal Power Agency -Texas Municipal Power Agency"). A~ency Rates. The TMPA Power Sales Agreement provides that the rates and charges for power, energy and services charged to each Member City by TMPA shall be (1) nondiscriminatory, (2) fair and reasonable and based on the cost of providing the power, energy and services with respect to which the rates or charges are based and (3) an amount sufficient to (i) pay TMPA's annual system costs, (ii) make the deposits to the funds required by the TMPA Prior Lien Resolution and certain other resolutions under which TMPA has issued subordinate lien debt (such resolutions, together with the TMPA Prior Lien Resolution are collectively, the "TMPA Resolution"), (iii) fund the annual capital budget of TMPA, and (iv) with respect to other funds or 37 other accounts established by the board of directors of TMPA (the "TMPA Board of Directors") and not required by the provisions of the TMPA Resolution, fund such funds or accounts in an amount not greater than 3.5% of TMPA's annual system budget, or such greater amount as may be approved by the affirmative vote of at least six members of the TMPA Board of Directors with at least one member of the TMPA Board of Directors appointed by each Member City voting in favor of any such increase. Rebate of Excess Revenues to the Member Cities. Except for funds held for purposes of self insurance, any funds held by TMPA on the last day of each fiscal year (commencing September 30, 1998) over and above the amounts required in connection with subsections (i), (ii), (iii) and (iv) of clause (3) of the preceding paragraph shall be returned to the Member Cities within 120 days of such date in the same percentage as the percentage each City contributed to such amounts. Funds held pursuant to clause subsection (iv) of clause (3) of the preceding paragraph, if approved by the affirmative vote of at least six members of the TMPA Board of Directors with at least one member of the TMPA Board of Directors appointed by each Member City voting in the affirmative, may be used to reduce the debt of TMPA. TMPA Power Sales Agreement Payments Constitute OPeratin~ExPenses o the City. The TMPA Power Sales Agreement provides that all payments by a Member City under the TMPA Power Sales Agreement, including any payments required to be made to TMPA's bond, reserve and contingency funds, shall constitute an operating expense of its electric system payable solely from the revenues and receipts of such electric system. Rate Covenant under the TMPA Power Sales A re.~. Under the TMPA Power Sales Agreement, each Member City has covenanted to establish, maintain and collect rates and charges for the electric service of its electric system which shall produce revenues at least sufficient, together with other revenue available to such electric system and available electric system reserves, to enable it to pay to TMPA, when due, all amounts payable by such city under the TMPA Power Sales Agreement. Sale or Assi n.~of Electric Systems. Under the TMPA Power Sales Agreement and the TMPA Resolution, no sale or other disposition by a Member City of its electric utility distribution system as a whole or substantially as a whole may become effective without the consent of all the Member Cities and TMPA during the term of the TMPA Power Sales Agreement. A Member City may assign its rights under the TMPA Power Sales Agreement but such assignment shall not relieve such Member City of its fmancial obligations under the TMPA Power Sales Agreement during the time any TMPA Revenue Bonds are outstanding. CAPITAL IMPROVEMENT PLAN AND ADDITIONAL DEBT ...Capital projects involve the acquisition or construction of major facilities and equipment. Each year, the City Council adopts a capital budget for the Electric System that differs from the operating budget because it is a "multi-year" process. "Multi-year" means that the project's budget is active until the project is fmished. Due to the multi-year nature of capital projects, budgeted expenditures in these plans consist of carryover projects from previous years and new projects being initiated in the current year. Due to its nature as a planning tool, a capital budget, while identifying and prioritizing capital expenditures, is subject to revision as circumstances change, including changes in the economy and in the need for various governmental services and the placement of such services within the City. Consequently, the inclusion of an expenditure in a capital budget is not a firm commitment to a project, particularly as the planning horizon extends into the future. The Electric System's current capital improvement plan (the "Electric CIP") identifies projects for five-year period ending September 30, 2014. The Electric CIP identifies approximately $116 million in transmission and distribution projects, of which approximately 99% are projected to be bond-financed, including the use of funds from prior bond issues. The current Electric CIP indicates the total level of bond funded expenditures (including the use of both bond funds available from previous bond issues and bond funds from new issues) for Electric System improvements in the following amounts: Total Fiscal Bond Funded Year Expenditures 2009-10 $28.0 million 2010-ll 20.0 million 2011-12 17.0 million 2012-13 18.2 million 2013-14 23.2 million ELECTRIC SYSTEM'S SERVICE AREA AND SERVICE AREA COMPOSITION In 1976, the Public Utility Commission of Texas (the "PUC") issued the City a Certificate of Convenience and Necessity ("CCN") to serve electricity to an area encompassing the City's then boundaries, plus its extraterritorial jurisdiction area ("ETJ"). SB 7 provided that the City may file with the PUC to single certificate areas within its municipal boundaries as they existed on February 1, 1999. With the exception of two existing subdivisions being served by Oncor and CoServ Electric ("CoServ"), the City was granted single certification of these areas in April of 2002. The territory now single-certified for electric service for the City is approximately 60 square miles in area. Dual and occasional triple certification presently exist in the ETJ. Approximately 49% of the City's electric service area is multiple- 38 certified, representing an area of approximately 53 square miles. While the City's electric service customers in the multiple- certified service area will not be open to new competitors unless the City Council "opts in" to retail competition, the Electric System competes for new customers that move into the multi-certified service area against the other utilities that have been certified in the past to provide service in that area. For the year ended September 30, 2009, the Electric System provided electric service to a monthly average of 45,153 customers located in the certified service territory of the Electric System. For the year ended September 30, 2009, the customer base that was served by the Electric System measured by number of accounts is approximately 88% residential and approximately ll% commercial and industrial in composition, although commercial and industrial accounts provided approximately 59% of the energy sold. For the year ended September 30, 2009, the top ten customers of the Electric System provided 24% of the tarriffed rate revenues of the Electric System and purchased 25% of the energy sold by the Electric System. Two State institutions of higher education, the University of North Texas ("UNT") and Texas Woman's University ("TWU" and collectively with UNT, the "Universities"), were included in the top ten customers of the Electric System for each of the five most recently completed fiscal years. For the year ended September 30, 2009, the Universities provided 9% of the tarriffed rate revenues of the Electric System and purchased ll% of the energy sold by the Electric System. A provision of SB 7 provided that utilities that provide electric service to State facilities, consisting of four-year state universities, upper level institutions, Texas State Technical Colleges, or college educational institutions, must do so in accordance with rate tariffs that are equal to the utilities' established base rate for the customer class applicable to such State educational institutions, less an additional 20% discount (the "State University and Colleges Discount Tariff'). As a result of the State University and Colleges Discount Tariff, the Universities' cost of energy has been less than the costs incurred by the Electric System for providing such energy, although the City is lawfully permitted to recover the amount of the State University and Colleges Discount Tariff from its other rate paying customers, and it has done so. The City has interpreted SB 7 to provide for the expiration of the State University and Colleges Discount Tariff on August 31, 2007. In light of the assumed expiration of that tariff, the City engaged in discussions with both Universities prior to August 31, 2007 in an attempt to reach agreement regarding the billing for energy, and as a result, TWU agreed to pay the invoiced cost of energy to the City after September 1, 2007, but issued a protest letter to preserve its rights to a potential refund. The City was unable to reach any agreement with UNT, and on February 8, 2008, the City filed suit in the 158th Judicial District Court in Denton County against UNT seeking a declaratory judgment with respect to the question of whether the State University and Colleges Discount Tariff has in fact expired by its own terms. For City electricity invoices after August 31, 2007, UNT has made payment to the City based upon an estimate of its electricity costs without regard to the expiration of the tariff. The District Court has ruled in favor of the City and an agreement has been approved by UNT and the City that has resulted in UNT paying their full invoiced amount beginning May, 2009, and defined the terms of settlement as a result of the appeal process that UNT has indicated they will pursue. The City is optimistic of prevailing in the case. The Electric System has competed successfully for customers with Oncor and CoServ in multiple-certified areas since 1976. According to records of the Electric System, approximately 100% of the new residential subdivisions and large industrial accounts in the multiple-certified service area have become customers of the City during the last five fiscal years. LoAU REQUIREMENTS ...The City's capacity requirements are calculated based upon the City's peak summer demand. For the year ending September 30, 2009, the City's peak capacity requirement was 313 MW, which occurred in June. The City has forecasted a maximum load of 321 MW for 2010. INTERCONNECTIONS ...The City is interconnected with a TMPA 345 kilovolt ("kV"), two TMPA 138 kV lines and one Brazos Electric Cooperative 138 kV transmission line. The TMPA transmission system serves the City via a 138 kV loop around the City. TMPA furnishes energy to the loop via a 345 kV transmission system and two 138 kV ties also interconnected with the Oncor transmission system. Over the last five years, the City has completed approximately $55 million of electric system improvements; a significant portion has been for transmission and distribution facility improvements. The transmission improvements are part of the ERGOT planned transmission system upgrades. The Electric System receives Transmission Cost Of Service payments from the ERGOT "postage stamp" transmission system structure that covers the cost of investment in and maintenance of its transmission system. CONTRIBUTIONS TO THE CITY OF DENTON ...The Electric System enterprise fund annually transfers an amount to the General Fund of the City to reimburse for the Electric System's share of administrative overhead of the City. The Electric System also makes an annual Franchise Fee transfer to the General Fund equal to 5% of the Electric System's revenues. In addition, the City Charter provides that the City shall be entitled to receive an annual return on its net investment from excess revenues, if any, of the Electric System. In satisfaction of this Charter requirement, the Electric System annually makes an additional transfer to the General Fund of the City in an amount calculated at 3.5% of revenues. For calculation of both the Franchise Fee payment and the "return on investment" payment calculations the portion of the ECA revenues that is included in the calculation of revenues subject to transfer is capped at 3.0 cents per kWh. The amount transferred to the General Fund for administrative overhead is an operating expense of the Electric System, while amounts transferred in lieu of a franchise tax and as a return on investment are made after the Electric System has provided for the payment of operating expenses and debt service requirements. 39 THE WATER SYSTEM The water system provides retail water service to all customers located within the City limits, as well as wholesale treated and raw water service to the Upper Trinity Regional Water District ("UTRWD") for its use and for resale to two of its customer cities. The water distribution system consists of 2 water treatment plants, 520 miles of water mains, 14 million gallons of ground storage, and 4.36 million gallons of elevated storage. The City continues to operate the water system in compliance with all State and Federal water quality requirements. Water Supply ...The present municipal supplies are obtained from surface sources. The City has conservation storage rights in Lewisville Reservoir, which was constructed by the U.S. Corps of Engineers. This Reservoir has a maximum conservation storage area of 436,000 acre feet of water. The City holds the rights to 21,000 acre feet of storage, with the balance being held by the City of Dallas ("Dallas"). Based on the safe yield of 90.20 MGD, the City receives 4.34 million gallons per day ("MGD") in water rights from Lewisville Reservoir. The City also has 207,896 acre feet of annual withdrawal rights from the Ray Roberts Reservoir (799,600 acre feet) located on the Elm Fork of the Trinity River nine miles upstream from the Lewisville Reservoir. The City and Dallas have determined and agreed by contract that the safe yield of Ray Roberts Reservoir is 76 MGD, and that the City's share is 26% or 19.786 MGD, and Dallas' share is 74% or 56.24 MGD. The City projects that the combined 24.62 MGD of currently available surface water volume from Lewisville Reservoir (the City has rights to 4.86 MGD in Lewisville Reservoir, including wastewater effluent returns) and Ray Roberts Lake (the City's rights in Ray Roberts total 19.76 MGD) will be sufficient to serve the City's needs for approximately eight years. The City's retail and wholesale treated water volume during 2009 averaged approximately 17.0 MGD. The City has a raw water supply contract with Dallas, dated August 7,1985, that has a 30 year term, provided that the City can, upon five years' notice to Dallas, reduce or cease taking water under the contract. The contract obligates the City to purchase at least 500,000 gallons per day from Dallas. This is a minimum contract volume that the City maintains in order to keep open a long term option to purchase additional raw water from Dallas in the future that may be provided from existing or new water resources developed by Dallas. The water contract with Dallas is similar to the contracts for retail and/or wholesale water that Dallas supplies to 23 other North Texas municipalities. As regional water provider, Dallas is actively exploring prospects for obtaining additional water resources to serve its customer cities. The City's wholesale water purchase price from Dallas is currently 0.3954 cents per 1,000 gallons. State legislation has been enacted in recent years to organize similarly-situated water use areas into water planning groups. The City is working with Dallas and the other water users of the State's seventeen-county Region C Water Planning Group, which are conducting along-range water supply study to determine the water requirements and supply alternatives for the region through 2050. Given its raw water contract with Dallas, the City is of the view that it has the flexibility to work with Dallas at least through the remaining term of the agreement, but that it could also become a participant or a customer of other regional water suppliers that are investigating additional water supplies for the Region C Water Planning Group. The City has adopted a drought contingency plan, designed to help reduce water system demands in the event of a reduced water supply due to extended drought conditions or a temporary loss of critical facilities. Since the City shares two water supply reservoirs with Dallas, the drought contingency plan of the City shares common "trigger points" with the Dallas with respect to water that may be taken from the shared water supply reservoirs, although the City may implement its drought contingency plan for water treatment and/or distribution system limitations even if Dallas has not implemented its drought contingency plan. Water Treatment Plants ...The City's water treatment plants are capable of treating and pumping 48.75 MGD. The maximum volume pumped to date was 32.78 MGD in 2006. In June 2003, the operations began at the City's second water treatment plant, which has a capacity of 20 MGD. Upper Trinity Regional Water District On August 15, 1989, the City, in cooperation with 32 other Denton County cities, towns and water supply entities, effected the creation of the UTRWD in accordance with enabling State Legislation. The UTRWD's purpose is to provide future raw water supplies, wholesale water and wastewater services to entities primarily in, but not limited to, Denton County. UTRWD is controlled by a Board of Directors representing the cities in the region. The UTRWD is also authorized to plan, acquire or develop future raw water supplies or reservoirs for its participating members. The City began selling raw water to UTRWD in 1994 from the surplus capacity of the Lewisville Reservoir. During the 2004 Fiscal Year, a raw water pipeline from a new reservoir in east Texas was completed, which allows UTRWD to pass raw water through Lewisville Reservoir to a treatment plant in which it has an ownership interest. Although the UTRWD has completed the waterline into the Lewisville Reservoir, the line does not supply 100% of their water needs. Therefore, the City is continuing to sell wholesale raw water to the UTRWD. The pricing of the water sold to UTRWD by the City is at a wholesale, untreated rate. Because the raw water sales fluctuate the revenue is not a component of the water rate models. The City's contract with UTRWD provides for treated water sales to the UTRWD for resale to the City of Sanger, a municipality with a population of approximately 5,950 ("Sanger"). Sanger's water purchases are currently based on a demand charge for .5 MGD, plus a volume charge based upon actual water taken. In 2009, treated water sales by the City for resale to the City of Sanger averaged 20,932 40 gallons per day. In 2004, the City contracted with UTRWD to deliver City treated water to UTRWD for resale to the City of Krum, a municipality of about 3,250 people ("Krum"). The City began selling water to Krum through the UTRWD in April 2005, and it is expected that the water sales to Krum will continue for a term of eight years (to 2013). Like the Sanger water contract, the Krum water contract also includes demand and use components. For 2010, Krum has designated to take .2 MGD of water under its contract with the City. In 2009, treated water sales to Krum averaged 9,753.42 gallons per day. The City's contract with UTRWD will expire in July 2012, unless it is extended by mutual agreement. TABLE 16 -WATER USAGE (GALLONS Average Maximum Year Day (Sales) Day 2005 15,156,884 30,090,000 2006 19,444,940 32,783,000 2007 15,537,326 29,487,000 2008 18,033,290 33,051,000 2009 17,014,992 31,006,000 TABLE I7 -TOP TEN WATER CUSTOMERS 2009 Annual Consumption Name of Customer (Gallons) Revenue University of North Texas 286,310,810 $1,000,915 CityofDenton 117,728,398 479,584 Texas Woman's University 114,365,139 410,365 Links Construction 110,131,940 342,814 Denton Independent School District 106,057,430 409,768 Range Resources 92,841,700 337,460 Value Family Properties 85,293,900 269,920 Denton County 80,144,920 262,865 Peterbilt 40,595,800 128,735 The Ridge at North Texas 36,148,300 117,770 1,069,618,337 $3,760,195 TABLE IS -WATER RATES EFFECTIVE OCTOBER 1, 2009) Residential Inside City Limits Outside City Limits Facility Charge 314" meter $10.05 per month $11.55 per month 1" meter 13.10 per month 15.05 per month 1112" meter 16.80 per month 19.30 per month 2" meter 19.15 per month 22.00 per month Volume Charge Summer Winter Inside City Limits (May-October) (November-April) 0-15,000 gallons $2.75 per 1,000 gallons $2.75 per 1,000 gallons 15,001-30,000 gallons 4.00 per 1,000 gallons 2.75 per 1,000 gallons 30,001-50,000 gallons 5.00 per 1,000 gallons 2.75 per 1,000 gallons Over 50,000 gallons 6.00 per 1,000 gallons 2.75 per 1,000 gallons Outside City Limits 0-15,000 gallons $3.15 per 1,000 gallons $3.15 per 1,000 gallons 15,001-30,000 gallons 4.60 per 1,000 gallons 3.15 per 1,000 gallons 30,001-50,000 gallons 5.75 per 1,000 gallons 3.15 per 1,000 gallons Over 50,000 gallons 6.90 per 1,000 gallons 3.15 per 1,000 gallons 41 Commercial and Industrial (Inside City Limits) Facility Charge 314" meter $18.40 per month 1" meter 21.95 per month 1112" meter 26.05 per month 2" meter 33.60 per month Volume Charge 3.05 per 1,000 gallons Residential Irrigation Rate Summer Winter (May-October) (November-April) 0-15,000 gallons $4.00 per 1,000 gallons $2.75 per 1,000 gallons 15,001-30,000 gallons 5.00 per 1,000 gallons 2.75 per 1,000 gallons 30,001-50,000 gallons 6.00 per 1,000 gallons 2.75 per 1,000 gallons Over 50,000 gallons 7.00 per 1,000 gallons 2.75 per 1,000 gallons Commercial Irrigation Rate Summer Winter (May-October) (November-April) All Volumes $3.70 per 1,000 gallons $3.05 per 1,000 gallons THE WASTEWATER SYSTEM The wastewater system provides retail wastewater collection and treatment service to City citizens, as well as the City's four wholesale wastewater customers. The collection system consists of approximately 459 miles of gravity wastewater lines, 21 miles of force mains, and 27 lift stations. Wastewater Reclamation Plant In 1994 the City completed an expansion of its wastewater reclamation plant, which has an operating permit for treatment of up to 15 MGD. A 6 MGD expansion was completed at the reclamation plant in December 2003, bringing total permitted treatment capacity to 21 MGD, which the City projects will meet its needs through 2016. The City's treated wastewater effluent volume averaged 12.97 MGD in 2009. The wastewater system is subject to, and is presently operated and maintained in compliance with, applicable State and Federal laws, regulations and effluent discharge permits. The City's discharge permit for the wastewater reclamation plant imposes stringent limitations on the removal of ammonia, dechlorination, and sludge conditioning and treatment. Wholesale Customers ...The City has contracts to treat wholesale wastewater for the Cities of Corinth, Krum, Argyle and the Lake City Municipal Utility Authority. In 2009, the wholesale treatment volume averaged approximately 0.6 MGD. Compost and Effluent Programs ...Use of wastewater byproducts and recycled yard waste to make compost material has provided an additional means of sludge disposal for the City, and has produced a new revenue source through sale of the compost product. The City has seven acres of roller-compacted concrete surface at its wastewater reclamation plant that is used for the City's compost program. All sludge from the reclamation plant is composted by the City. The City has also implemented a reuse system for treated effluent. The City is expanding its reuse water program for sale to major irrigation users in the City. The effluent waterline project was completed in March 2004. In 2009, the City received $138,430 in revenues from the sale of effluent to the local electric generating plant and to irrigation customers. TABLE I9 -WASTEWATER RATES (EFFECTIVE OCTOBER I, 2OO9) Residential CommerciaUIndustrial Facility Charge $7.45 per month Facility Charge $19.47 per month Volume Charge 2.85 per 1,000 gallons Volume Charge 3.70 per 1,000 gallons (Based on 98% of average water consumption billed during (Based on 85% of monthly water consumption) December through February; volumes are capped at 18,000 (Industrial surcharge based on concentration of biochemical gallons/bill) oxygen demand and total suspended solids of effluent) Residential Customer Outside City Limits Facility Charge $8.60 per month Volume Charge $3.29 per 1,000 gallons Rate Regulation ...Within its boundaries, the City has exclusive jurisdiction over the water and wastewater system rates. Rate Management For a discussion of the City's wastewater system rate structure, see "Water and Wastewater Rate Management." 42 WATER AND WASTEWATER RATE MANAGEMENT Since the late 1990's, the City has financed substantial amounts of new water and wastewater infrastructure improvements to meet increased demands for service. No new infrastructure was financed in the years 2004, 2005 and 2006. The City funded $9.5 million for water facilities in 2007 and $4 million for water facilities in 2008, and is funding $13 million in 2010 for water and $4.5 million in wastewater. No new infrastructure was financed in 2009. Prior to the 2003 fiscal year the City had not increased water or wastewater rates since fiscal year 1996. The City increased wastewater rates by 4%, 9% and 6% in 2004, 2005 and 2006, respectively. The City proposes an increase in wastewater rates in 2011 by 2%, and in 2012 by 1%. Water rates were increased by 2% in 2007, 3% in 2008, and 3% in 2009 and no rate increase in 2010. The ability of the City to maintain relatively low water rate increases is attributable to several factors, including a comparatively stable cost for raw water. In addition, the City has benefited from a decline in interest rates that has permitted it to borrow and refinance System debt at favorable rates. Another significant factor in the City's management of water and wastewater rates include the implementation of water and wastewater impact fees that occurred in 1998. The water and wastewater impact fees were updated and increased in 2003 and in 2008. The 2008 update of the water impact fees established two water service area zones for assessing impact fees. The water impact fee for Zone 1 is $3,400, and Zone 2 is $4,000. Wastewater maintained the two service area zones previously established in 2003. The current impact fee for wastewater service area Zone 1 is $1,700 and Zone 2 is $1,760. These fees are assessed to offset the additional infrastructure costs associated with service to new development areas. Impact fees allow the City to meet new development requirements without the need to recover costs from existing customers through higher utility or tax rates. As shown under "DEBTINFORMATION -Anticipated Issuance of Revenue Bonds," the City is projecting that it will issue more debt over the next five years for water system projects. As a result, and to maintain relatively level water cost for its customers while meeting increases in costs of labor and supplies, the City is projecting water rate increases in 2011 by 4%, in 2012 by 4%, and in 2013 by 4%. The City's current water and wastewater rates are comparable, though slightly higher, than rates charged in nearby municipalities of similar size, though the City's rates are somewhat lower than other water suppliers operating in the immediate area adjoining the City. The City has identified significant water and wastewater infrastructure that it anticipates will be funded through a mix of currently-generated funds, the use of financial reserves and System debt over the next five years (see "Debt Information - Anticipated Issuance of Revenue Bonds"). The increasing capital expenditures and growth in debt service associated with the capital expenditures, particularly for the wastewater system, are significant contributors to the increased wastewater rates, discussed above. In addition, the wastewater increases reflect a financial goal for both the water and wastewater systems to (i) generate net revenues each year in amounts equal to the System's debt service coverage ratio of 1.25 times debt service, after payment of operating expenses of each system, with each component of the System meeting the rate covenant on a stand-alone basis, and (ii) with each system building toward the accumulation of reserves equal to 60 days of working capital and an unreserved fund balance of 15% of budgeted expenses. In fiscal year 2009, the City reached these goals. Reserve funds, including rate stabilization accounts, that were established to address future capital and contingency requirements and to provide financial flexibility are being used to minimize rate increases. Through the use of such reserves, the City can meet budget demands during cycles of wet weather, that reduce the cash flow of the water system. The use of rate stabilization funds also permits the City to temporarily absorb increases in variable operating costs. In accordance with the terms of the Ordinance, the City Council may pledge all or part of the amounts in one or more of the rate stabilization funds to secure the Parity Bonds, in which event, such pledged amounts become "Pledged Revenues" that may betaken into account by the City for purposes of satisfying the debt service coverage covenant described in the preceding paragraph. The City's fiscal year 2010 budget includes a beginning balance of approximately $12 million in the water rate stabilization fund and $5.0 million in the wastewater rate stabilization fund. The City Charter provides that the City shall be entitled to receive annually on the net investment from excess revenues of its utility enterprise funds, if any, of not more than 6 percent of the net investment of such funds in each year. In satisfaction of this "rate of return" transfer provision, the City annually makes transfers from the water and wastewater system (except for amounts attributable to drainage operations, as described below) to the City's General Fund that equal to 3.5% of the rate revenue of each fund. In addition, there is an annual transfer of 5% of rate revenue as a payment in lieu of franchise taxes. Since February 2002, when the City implemented its drainage fee, drainage projects have been funded by such fee, which is administered through the wastewater system budget. During the 2003 Texas legislative session, legislation was approved that exempted State agencies, including State institutions of higher education, from paying drainage fees. As a result of this change in the law, prior year projections of drainage revenues were reduced by $252,000 each year. To address the loss of such funds, commencing with fiscal year 2006, the City has determined that no transfers will be made to the General Fund from drainage revenues that are comparable to the rate of return or payment in lieu of franchise taxes made to the General Fund from the water system and other rate revenues of the wastewater system. The City will also cease making a transfer to the wastewater system equivalent to the drainage fee. The net result is expected to be an approximately $200,000 benefit for drainage operations. 43 UTILITY SYSTEM DEBT INFORMATION TABLE 2O -UTILITY SYSTEM DEBT SERVICE REQUIREMENTS (1) Fiscal Year % of Ended Outstanding Revenue Bond Debt Service Principal 9/30 Principal Interest Total Retired 2 $ 15,935,000 $ 12,267,798 $ 28,202,798 2011 14,845,000 11,486,258 26,331,258 2012 15,495,000 10,748,188 26,243,188 2013 16,195,000 9,997,321 26,192,321 2014 16,965,000 9,216,259 26,181,259 29.78% 2015 17,480,000 8,402,559 25,882,559 2016 17,555,000 7,563,865 25,118,865 2017 18,445,000 6,688,227 25,133,227 2018 19,170,000 5,786,925 24,956,925 2019 19,795,000 4,873,291 24,668,291 64.45% 2020 20,805,000 3,921,344 24,726,344 2021 17,655,000 3,018,077 20,673,077 2022 14,580,000 2,251,422 16,831,422 2023 9,435,000 1,682,559 11,117,559 2024 6,850,000 1,307,650 8,157,650 90.44% 2025 7,195,000 979,838 8,174,838 2026 5,075,000 695,653 5,770,653 2027 4,635,000 477,594 5,112,594 2028 3,535,000 294,538 3,829,538 2029 2,475,000 162,456 2,637,456 99.03% 2030 2,585,000 54,931 2,639,931 100.00% $ 266,705,000 $ 101,876,754 $ 368,581,754 (1) Does not include the Bonds being offered herein. VOTED BUT UNISSUED REVENUE BONDS ...The City has no voted but unissued revenue bonds and as a general matter, revenue bonds may be issued by the City without voter approval. ANTICIPATED ISSUANCE of REVENUE BONDS ...The City has developed a five year capital improvement plan for the System (the "CIP"). The CIP includes improvements that will be funded with revenues of the System as well as through the issuance of Additional Bonds. The CIP is a planning tool and the City is not obligated to fund the CIP. The funding of the CIP will be dependent in part on continued demand for services, economic conditions in the City and the financial ability of the System to support the funding of the CIP, among other factors. The FY 2009-10 Adopted Five-Year CIP includes total capital expenditures for the System of approximately $268 million, of which, approximately $202 million are planned to be funded from proceeds of System debt (a portion of such expenditures will be made from prior issues of System debt). The current plan for issuance of revenue debt, as of December 31, 2009, is shown in the following table. Projected Revenue Bond Sales (000's) (1) 2009-10 2010-11 2011-12 2012-13 2013-14 Electric Utilities $ 28,000 $10,000 $10,000 $10,000 $12,000 Water Utilities 13,000 16,500 12,000 2,000 0 Wastewater/Drainage Utilities 4,500 7,000 12,500 10,000 7,000 $ 45,500 $ 33,500 $ 34,500 $ 22,000 $19,000 (1) The Electric System will revise its bond issuance plans in September 2010 for the five year period shown in the table. Does not include the Bonds being offered herein. 44 UTILITY SYSTEM FINANCIAL INFORMATION TABLE ZI -COMPARABLE CALCULATION OF UTILITY SYSTEM NET REVENUES AVAILABLE FOR DEBT SERVICE The table below provides comparable calculations of Net Revenues available for debt service for the periods shown. Such calculations include all operating revenues plus interest income, less operating expenses. For purposes of the calculation, depreciation, amortization, franchise fees, and payments in lieu of taxes are excluded from operating expenses. Fiscal Year Ended September30, Gross Revenues 2009 (1) 2008 (1) 2007 (1) 2006 (1) 2005 (1) Electric Service $124,832,582 $134,936,624 $124,727,137 $142,984,230 $127,207,343 Water Service 23,491,148 23,414,168 20,624,118 25,708,728 20,899,624 Wastewater Service 20,167,968 20,310,137 20,103,918 21,045,736 18,261,962 Other Fees 7,972,659 7,213,521 8,424,540 11,231,866 4,081,191 Interest Income 4,886,982 7,389,313 8,679,400 6,340,498 5,141,512 Impact Fees 4,456,827 6,620,938 5,558,985 5,556,349 4,206,630 Total Revenues $185,808,166 $199,884,701 $188,118,098 $212,867,407 $179,798,262 Expenses Electric System Fuel and Purchased Power $ 91,247,961 $107,081,728 $ 95,390,443 $113,375,234 $103,375,311 Other Operating and Administrative Expenses 17,740,416 14,967,253 12,824,900 15,042,972 14,393,426 $108,988,377 $122,048,981 $108,215,343 $128,418,206 $117,768,737 Water System Fuel and Purchased Power $ 1,178,508 $ 1,380,659 $ 1,060,570 $ 1,533,389 $ 1,190,957 Water Purchased 69,736 70,111 52,974 73,269 66,779 Other Operating and Administrative Expenses 14,614,065 12,212,405 12,489,693 12,600,682 9,528,608 $ 15,862,309 $ 13,663,175 $ 13,603,237 $ 14,207,340 $ 10,786,344 Wastewater System Fuel and Purchased Power $ 775,561 $ 742,852 $ 733,864 $ 1,004,980 $ 880,197 Other Operating and Administrative Expenses 10,440,162 9,928,726 9,054,512 10,068,157 10,191,287 $ 11,215,723 $ 10,671,578 $ 9,788,376 $ 11,073,137 $ 11,071,484 Total Expenses $136,066,409 $146,383,734 $131,606,956 $153,698,683 $139,626,565 Net Revenue Available for Debt Service and Other Lawful Purposes $ 49,741,757 $ 53,500,967 $ 56,511,142 $ 59,168,724 $ 40,171,697 Contribution to Net Revenue s Available Electric System 44.11% 37.76% 44.28% 40.50% 35.20% Water System 32.04% 36.87% 30.41% 36.30% 39.50% Wastewater System 23.85% 25.37% 25.31% 23.20% 25.30% Electric Customers 45,153 44,375 43,607 42,186 41,846 Water Customers 30,388 29,679 29,783 28,805 27,584 Wastewater Customers 28,647 28,019 28,020 26,951 25,695 (1) Data is derived from financial statements of the City that are audited. (2) Expenses do not include ROI and Franchise fees paid to General Fund. 45 TABLE ZZ -COVERAGE AND FUND BALANCES (1) Average Annual Principal and Interest Requirements, 2010-2030 $ 17,551,512 Coverage of Average Requirements by 9-30-09 Net Available for Debt Service 2.83 Times Maximum Principal and Interest Requirements, 2010 $ 28,202,798 Coverage of Maximum Requirements by 9-30-09 Net Available for Debt Service 1.76 Times Utility SystemRevenue Bonds Outstanding as of 12-31-09 $250,770,000 Interest and Sinking Fund, as of 12-31-09 $ 0 Aggregate of All Rate Stablization Funds $ 72,659,018 Revenue Bond Debt Service Reserve Fund, as of 12-31-09 $ 18,788,996 Emergency Fund, as of 12-31-09 $ 273,286 Extension and Replacement Fund, as of 12-31-09 $ 7,691,999 (1) Does not include the Bonds being offered herein. [The Remainder Of This Page Left Blank Intentionally] 46 INVESTMENTS The City invests its investable funds in investments authorized by Texas law in accordance with investment policies approved by the City Council. Both Texas law and the City's investment policies are subject to change. LEGAL INVESTMENTS ...Under Texas law, the City is authorized to invest in (1) obligations, including letter of credit, of the United States or its agencies and instrumentalities, (2) direct obligations of the State of Texas or its agencies and instrumentalities; (3) collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States; (4) other obligations, the principal and interest of which is guaranteed or insured by or backed by the full faith and credit of, the State of Texas or the United States or their respective agencies and instrumentalities; (5) obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent; (6) bonds issued, assumed or guaranteed by the State of Israel; (7) certificates of deposit and share certificates meeting the requirements of the Texas Public Funds Investment Act (Chapter 2256, Texas Government Code, as amended (the "PFIA")) that are issued by or through an institution that either has its main office or a branch office in Texas, and are guaranteed or insured by the Federal Deposit Insurance Corporation or the National Credit Union Share Insurance Fund, or are secured as to principal by obligations described in clauses (1) through (6) or in any other manner and amount provided by law for City deposits, or are invested by the City through a depository institution that has its main office or a branch office in the State of Texas and otherwise meet the requirements of the PFIA, (8) fully collateralized repurchase agreements that have a defined termination date, are fully secured by obligations described in clause (1), and are placed through a primary government securities dealer or a financial institution doing business in the State of Texas, (9) certain bankers' acceptances with the remaining term of 270 days or less, if the short-term obligations of the accepting bank or its parent are rated atleast A-1 or P-1 or the equivalent by at least one nationally recognized credit rating agency, (10) commercial paper with a stated maturity of 270 days or less that is rated at least A-1 or P-1 or the equivalent by either (a) two nationally recognized credit rating agencies or (b) one nationally recognized credit rating agency if the paper is fully secured by an irrevocable letter of credit issued by a U.S. or state bank, (11) no-load money market mutual funds registered with and regulated by the Securities and Exchange Commission that have a dollar weighted average stated maturity of 90 days or less and include in their investment objectives the maintenance of a stable net asset value of $1 for each share, and (12) no-load mutual funds registered with the Securities and Exchange Commission that have an average weighted maturity of less than two years, invest exclusively in obligations described in the this paragraph, and are continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than AAA or its equivalent. If specifically authorized in the authorizing document, bond proceeds may be invested in guaranteed investment contracts that have a defined termination date and are secured by obligations of the United States or its agencies and instrumentalities in an amount at least equal to the amount of bond proceeds invested under such contract, other than the prohibited obligations described in the next succeeding paragraph. The City may invest in such obligations directly or through government investment pools that invest solely in such obligations provided that the pools are rated no lower than AAA or AAA-m or an equivalent by atleast one nationally recognized rating service. The City may also contract with an investment management firm registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities Board to provide for the investment and management of its public funds or other funds under its control for a term up to two years, but the City retains ultimate responsibility as fiduciary of its assets. In order to renew or extend such a contract, the City must do so by order, ordinance, or resolution. The City is specifically prohibited from investing in: (1) obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal; (2) obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security and bears no interest; (3) collateralized mortgage obligations that have a stated final maturity of greater than 10 years; and (4) collateralized mortgage obligations the interest rate of which is determined by an index that adjusts opposite to the changes in a market index. Political subdivisions such as the City are authorized to implement securities lending programs if (i) the securities loaned under the program are 100% collateralized, aloan made under the program allows for termination at any time and a loan made under the program is either secured by (a) obligations that are described in clauses (1) through (6) of the first paragraph under this subcaption, (b) irrevocable letters of credit issued by a state or national bank that is continuously rated by a nationally recognized investment rating firm not less than "A" or its equivalent, or (c) cash invested in obligations that are described in clauses (1) through (6) and (10) through (12) of the first paragraph under this subcaption, or an authorized investment pool; (ii) securities held as collateral under a loan are pledged to the governmental body, held in the name of the governmental body and deposited at the time the investment is made with the City or a third party designated by the City; (iii) a loan made under the program is placed through either a primary government securities dealer or a financial institution doing business in the State of Texas; and (iv) the agreement to lend securities has a term of one year or less. INVESTMENT POLICIES ...Under Texas law, the City is required to invest its funds under written investment policies that primarily emphasize safety of principal and liquidity; that address investment diversification, yield, maturity, and the quality and capability of investment management; and that includes a list of authorized investments for City funds, maximum allowable stated maturity of any individual investment and the maximum average dollar-weighted maturity allowed for pooled fund groups. All City funds must be invested consistent with a formally adopted "Investment Strategy Statement" that specifically addresses each funds' investment. Each Investment Strategy Statement will describe its objectives concerning. (1) suitability of investment type, (2) preservation and safety of principal, (3) liquidity, (4) marketability of each investment, (5) diversification of the portfolio, and (6) yield. 47 Under Texas law, City investments must be made "with judgment and care, under prevailing circumstances, that a person of prudence, discretion, and intelligence would exercise in the management of the person's own affairs, not for speculation, but for investment, considering the probable safety of capital and the probable income to be derived." At least quarterly the investment officers of the City shall submit an investment report detailing: (1) the investment position of the City, (2) that all investment officers jointly prepared and signed the report, (3) the beginning market value, any additions and changes to market value and the ending value of each pooled fund group, (4) the book value and market value of each separately listed asset at the beginning and end of the reporting period, (5) the maturity date of each separately invested asset, (6) the account or fund or pooled fund group for which each individual investment was acquired, and (7) the compliance of the investment portfolio as it relates to: (a) adopted investment strategy statements and (b) state law. No person may invest City funds without express written authority from the City Council. ADDITIONAL PROVISIONS ...Under Texas law the City is additionally required to: (1) annually review its adopted policies and strategies; (2) adopt a rule, order, ordinance or resolution stating that it has reviewed its investment policy and investment strategies and records any changes made to either its investment policy or investment strategy in the respective rule, order, ordinance or resolution; (3) require any investment officers' with personal business relationships or relatives with firms seeking to sell securities to the entity to disclose the relationship and file a statement with the Texas Ethics Commission and the City Council; (4) require the registered principal of firms seeking to sell securities to the City to: (a) receive and review the City's investment policy, (b) acknowledge that reasonable controls and procedures have been implemented to preclude investment transactions conducted between the City and the business organization that are not authorized by the City's investment policy (except to the extent that this authorization is dependent on an analysis of the makeup of the City's entire portfolio or requires an interpretation of subjective investment standards), and (c) deliver a written statement attesting to these requirements; (5) perform an annual audit of the management controls on investments and adherence to the City's investment policy; (6) provide specific investment training for the Treasurer, Chief Financial Officer and investment officers; (7) restrict reverse repurchase agreements to not more than 90 days and restrict the investment of reverse repurchase agreement funds to no greater than the term of the reverse repurchase agreement; (8) restrict the investment in no-load mutual funds in the aggregate to no more than 15% of the entity's monthly average fund balance, excluding bond proceeds and reserves and other funds held for debt service; (9) require local government investment pools to conform to the new disclosure, rating, net asset value, yield calculation, and advisory board requirements; and (10) at least annually review, revise, and adopt a list of qualified brokers that are authorized to engage in investment transactions with the City. TABLE Z3-CURRENT INVESTMENTS As of December 31, 2009, the City's investable funds were invested in the following categories: Market Value Book Market Description Percent Value Value U.S. Federal Agency Coupons 44.74% $118,304,500 $118,941,723 U.S. Federal Agency Callables 5.31% 14,113,426 14,113,437 U.S. Treasury Securities 18.04% 47,962,259 47,957,052 Pools 10.80% 28,708,000 28,708,000 Certificates ofDeposit (1) 21.11% 56,110,000 56,110,000 100.00% $265,198,185 $265,830,212 (1) CDARS CDs are fully insured by FDIC Insurance. No funds of the City are invested in derivative securities, i.e., securities whose rate of return is determined by reference to some other instrument, index or commodity. 48 TAX MATTERS OPINION On the date of initial delivery of the Bonds, McCall, Parkhurst & Horton L.L.P., Dallas, Texas, Bond Counsel to the City, will render its opinion that, in accordance with statutes, regulations, published rulings and court decisions existing on the date thereof ("Existing Law"), for federal income tax purposes, interest on the Bonds (i) will be excludable from the "gross income" of the holders thereof and (ii) will not be includable in the owner's alternative minimum taxable income under section 55 of the Internal Revenue Code of 1986 (the "Code"). Except as stated above, Bond Counsel to the City will express no opinion as to any other federal, state or local tax consequences of the purchase, ownership or disposition of the Bonds. See Appendix C - -Form of Opinion of Bond Counsel. In rendering its opinion, Bond Counsel to the City will rely upon (a) certain information and representations of the City, including information and representations contained in the City's federal tax certificate, and (b) covenants of the City contained in the Bond documents relating to certain matters, including arbitrage and the use of the proceeds of the Bonds and the property financed or refinanced therewith. Failure by the City to observe the aforementioned representations or covenants could cause the interest on the Bonds to become taxable retroactively to the date of issuance. The Code and the regulations promulgated thereunder contain a number of requirements that must be satisfied subsequent to the issuance of the Bonds in order for interest on the Bonds to be, and to remain, excludable from gross income for federal income tax purposes. Failure to comply with such requirements may cause interest on the Bonds to be included in gross income retroactively to the date of issuance of the Bonds. The opinion of Bond Counsel to the City is conditioned on compliance by the City with such requirements, and Bond Counsel to the City has not been retained to monitor compliance with these requirements subsequent to the issuance of the Bonds. Bond Counsel's opinion represents its legal judgment based upon its review of Existing Law and the reliance on the aforementioned information, representations and covenants. Bond Counsel's opinion is not a guarantee of a result. Existing Law is subject to change by the Congress and to subsequent judicial and administrative interpretation by the courts and the Department of the Treasury. There can be no assurance that Existing Law or the interpretation thereof will not be changed in a manner which would adversely affect the tax treatment of the purchase, ownership or disposition of the Bonds. A ruling was not sought from the Internal Revenue Service by the City with respect to the Bonds or the property financed or refinanced with proceeds of the Bonds. No assurances can be given as to whether the Internal Revenue Service will commence an audit of the Bonds. Bond Counsel's opinion is not binding on the Internal Revenue Service. If an Internal Revenue Service audit is commenced, under current procedures the Internal Revenue Service is likely to treat the City as the taxpayer and the Bondholders may have no right to participate in such procedure. No additional interest will be paid upon any determination of taxability. FEDERAL INCOME TAX ACCOUNTING TREATMENT OF ORIGINAL ISSUE DISCOUNT ...The initial public offering price to be paid for one or more maturities of the Bonds may be less than the principal amount thereof or one or more periods for the payment of interest on the bonds may not be equal to the accrual period or be in excess of one year (the "Original Issue Discount Bonds"). In such event, the difference between (i) the "stated redemption price at maturity" of each Original Issue Discount Bond, and (ii) the initial offering price to the public of such Original Issue Discount Bond would constitute original issue discount. The "stated redemption price at maturity" means the sum of all payments to be made on the bonds less the amount of all periodic interest payments. Periodic interest payments are payments which are made during equal accrual periods (or during any unequal period if it is the initial or final period) and which are made during accrual periods which do not exceed one year. Under existing law, any owner who has purchased such Original Issue Discount Bond in the initial public offering is entitled to exclude from gross income (as defined in section 61 of the Code) an amount of income with respect to such Original Issue Discount Bond equal to that portion of the amount of such original issue discount allocable to the accrual period. For a discussion of certain collateral federal tax consequences, see discussion set forth below. In the event of the redemption, sale or other taxable disposition of such Original Issue Discount Bond prior to stated maturity, however, the amount realized by such owner in excess of the basis of such Original Issue Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Original Issue Discount Bond was held by such initial owner) is includable in gross income. Under existing law, the original issue discount on each Original Issue Discount Bond is accrued daily to the stated maturity thereof (in amounts calculated as described below for each six-month period ending on the date before the semiannual anniversary dates of the date of the Bonds and ratably within each such six-month period) and the accrued amount is added to an initial owner's basis for such Original Issue Discount Bond for purposes of determining the amount of gain or loss recognized by such owner upon the redemption, sale or other disposition thereof. The amount to be added to basis for each accrual period is equal to (a) the sum of the issue price and the amount of original issue discount accrued in prior periods multiplied by the yield to stated maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (b) the amounts payable as current interest during such accrual period on such Original Issue Discount Bond. 49 The federal income tax consequences of the purchase, ownership, redemption, sale or other disposition of Original Issue Discount Bonds which are not purchased in the initial offering at the initial offering price may be determined according to rules which differ from those described above. All owners of Original Issue Discount Bonds should consult their own tax advisors with respect to the determination for federal, state and local income tax purposes of the treatment of interest accrued upon redemption, sale or other disposition of such Original Issue Discount Bonds and with respect to the federal, state, local and foreign tax consequences of the purchase, ownership, redemption, sale or other disposition of such Original Issue Discount Bonds. COLLATERAL FEDERAL INCOME TAX CONSEQUENCES ...The following discussion is a summary of certain collateral federal income tax consequences resulting from the purchase, ownership or disposition of the Bonds. This discussion is based on existing statutes, regulations, published rulings and court decisions, all of which are subject to change or modification, retroactively. The following discussion is applicable to investors, other than those who are subject to special provisions of the Code, such as financial institutions, property and casualty insurance companies, life insurance companies, individual recipients of Social Security or Railroad Retirement benefits, individuals allowed an earned income credit, certain S corporations with accumulated earnings and profits and excess passive investment income, foreign corporations subject to the branch profits tax and taxpayers who maybe deemed to have incurred or continued indebtedness to purchase tax-exempt obligations. THE DISCUSSION CONTAINED HEREIN MAY NOT BE EXHAUSTIVE. INVESTORS, INCLUDING THOSE WHO ARE SUBJECT TO SPECIAL PROVISIONS OF THE CODE, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX TREATMENT WHICH MAY BE ANTICIPATED TO RESULT FROM THE PURCHASE, OWNERSHIP AND DISPOSITION OF TAX-EXEMPT OBLIGATIONS BEFORE DETERMINING WHETHER TO PURCHASE THE BONDS. Under section 6012 of the Code, holders of tax-exempt obligations, such as the Bonds, may be required to disclose interest received or accrued during each taxable year on their returns of federal income taxation. Section 1276 of the Code provides for ordinary income tax treatment of gain recognized upon the disposition of atax-exempt obligation, such as the Bonds, if such obligation was acquired at a "market discount" and if the fixed maturity of such obligation is equal to, or exceeds, one year from the date of issue. Such treatment applies to "market discount bonds" to the extent such gain does not exceed the accrued market discount of such bonds; although for this purpose, a de minimis amount of market discount is ignored. A "market discount bond" is one which is acquired by the holder at a purchase price which is less than the stated redemption price at maturity or, in the case of a bond issued at an original issue discount, the "revised issue price" (i.e., the issue price plus accrued original issue discount). The "accrued market discount" is the amount which bears the same ratio to the market discount as the number of days during which the holder holds the obligation bears to the number of days between the acquisition date and the final maturity date. STAR, LOCAL AND FOREIGN TAXES ...Investors should consult their own tax advisors concerning the tax implications of the purchase, ownership or disposition of the Bonds under applicable state or local laws. Foreign investors should also consult their own tax advisors regarding the tax consequences unique to investors who are not United States persons. OTHER INFORMATION RATINGS The Bonds and the outstanding tax supported debt of the City are rated " " by Moody's and " " by S&P. An explanation of the significance of such ratings may be obtained from the company furnishing the rating. The ratings reflect only the respective views of such organizations and the City makes no representation as to the appropriateness of the ratings. There is no assurance that such ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by either or both of such rating companies, if in the judgment of either or both companies, circumstances so warrant. Any such downward revision or withdrawal of such ratings, by either of them, may have an adverse effect on the market price of the Bonds. LITIGATION It is the opinion of the City Attorney and City Staff that there is no pending litigation against the City that would have a material adverse financial impact upon the City or its operations. For information concerning certain litigation involving the City, including the settlement of various cases, administrative proceedings and other related matters involving TMPA, the City and the other Member Cities, see Note V.F. in Appendix B, "Excerpts from the Comprehensive Annual Financial Report". 50 REGISTRATION AND QUALIFICATION OF BONDS FOR SALE The sale of the Bonds has not been registered under the Federal Securities Act of 1933, as amended, in reliance upon the exemption provided thereunder by Section 3(a)(2); and the Bonds have not been qualified under the Securities Act of Texas in reliance upon various exemptions contained therein; nor have the Bonds been qualified under the securities acts of any jurisdiction. The City assumes no responsibility for qualification of the Bonds under the securities laws of any jurisdiction in which the Bonds may be sold, assigned, pledged, hypothecated or otherwise transferred. This disclaimer of responsibility for qualification for sale or other disposition of the Bonds shall not be construed as an interpretation of any kind with regard to the availability of any exemption from securities registration provisions. LEGAL INVESTMENTS AND ELIGIBILITY TO SECURE PUBLIC FUNDS IN TEXAS Section 1201.041 of the Public Security Procedures Act (Chapter 1201, Texas Government Code) provides that the Bonds are negotiable instruments, investment securities governed by Chapter 8, Texas Business and Commerce Code, and are legal and authorized investments for insurance companies, fiduciaries, and trustees, and for the sinking funds of municipalities or other political subdivisions or public agencies of the State of Texas. With respect to investment in the Bonds by municipalities or other political subdivisions or public agencies of the State of Texas, the Public Funds Investment Act, Chapter 2256, Texas Government Code, requires that the Bonds be assigned a rating of at least "A" or its equivalent as to investment quality by a national rating agency. See "Other Information -Ratings" herein. In addition, various provisions of the Texas Finance Code provide that, subject to a prudent investor standard, the Bonds are legal investments for state banks, savings banks, trust companies with capital of one million dollars or more, and savings and loan associations. The Bonds are eligible to secure deposits of any public funds of the State, its agencies, and its political subdivisions, and are legal security for those deposits to the extent of their market value. No review by the City has been made of the laws in other states to determine whether the Bonds are legal investments for various institutions in those states. No representation is made that the Bonds will be acceptable to public entities to secure their deposits or acceptable to such institutions for investment purposes. The City made no investigation of other laws, rules, regulations or investment criteria which might apply to such institutions or entities or which might limit the suitability of the Bonds for any of the foregoing purposes or limit the authority of such institutions or entities to purchase or invest in the Bonds for such purposes. LEGAL OPINIONS The City will furnish a complete transcript of proceedings had incident to the authorization and issuance of the Bonds, including the unqualified approving legal opinion of the Attorney General of Texas approving the Initial Bond and to the effect that the Bonds are valid and legally binding obligations of the City, and based upon examination of such transcript of proceedings, the approving legal opinions of Bond Counsel, to like effect and to the effect that the interest on the Bonds will be excludable from gross income for federal income tax purposes under Section 103(a) of the Code, subject to the matters described under "Tax Matters" herein, including the alternative minimum tax consequences. The customary closing papers, including a certificate to the effect that no litigation of any nature has been filed or is then pending to restrain the issuance and delivery of the Bonds or which would affect the provision made for their payment or security, or in any manner questioning the validity of said Bonds will also be furnished. In its capacity as Bond Counsel, McCall, Parkhurst & Horton L.L.P. has reviewed the information describing the Bonds in the Official Statement to verify that such description conforms to the provisions of the Ordinance. In connection with the issuance of the Bonds, McCall, Parkhurst & Horton L.L.P. represents only the City. The legal fee to be paid Bond Counsel for services rendered in connection with the issuance of the Bonds is contingent on the sale and delivery of the Bonds. The legal opinion will accompany the Bonds deposited with DTC or will be printed on the Bonds in the event of the discontinuance of the Book-Entry-Only System. The various legal opinions to be delivered concurrently with the delivery of the Bonds express the professional judgment of the attorneys rendering the opinions as to the legal issues explicitly addressed therein. In rendering a legal opinion, the attorney does not become an insurer or guarantor of the expression of professional judgment, of the transaction opined upon, or of the future performance of the parties to the transaction, nor does the rendering of an opinion guarantee the outcome of any legal dispute that may arise out of the transaction. CONTINUING DISCLOSURE OF INFORMATION In the Ordinance the City has made the following agreement for the benefit of the holders and beneficial owners of the respective series of Bonds. The City is required to observe each agreement while it remains obligated to advance funds to pay such Bonds. Under each agreement, the City will be obligated to provide certain updated financial information and operating data annually, and the timely notice of specified material events to the Municipal Securities Rulemaking Board ("MSRB"). This information will be available free of charge from the MSRB via the Electronic Municipal Market Access ("EMMA") system at www.emma.msrb.or~. 51 ANNUAL REPORTS ...The City will provide certain updated financial information and operating data to the MSRB annually. The information to be updated includes all quantitative financial information and operating data with respect to the City of the general type included in this Official Statement under Tables numbered 1 through 5 and 7 through 23 and in Appendix B. The City will update and provide this information within six months after the end of each fiscal year ending in or after 2010. The City will provide the updated information to the MSRB. The financial information and operating data to be provided may be set forth in full in one or more documents or may be included by specific reference to any document available to the public on the MSRB's Internet Web site or filed with the Securities and Exchange Commission (the "SEC") as permitted by SEC Rule 15c2-12. The updated information will include audited financial statements, if the City commissions an audit and it is completed by the required time. If audited financial statements are not available by the required time, the City will provide unaudited financial statements by the required time and audited financial statements when and if such audited financial statements become available. Any such financial statements will be prepared in accordance with the accounting principles described in Appendix B or such other accounting principles as the City maybe required to employ from time to time pursuant to State law or regulation. The City's current fiscal year end is September 30. Accordingly, it must provide updated information by March 31 in each year, unless the City changes its fiscal year. If the City changes its fiscal year, it will notify the MSRB of the change. MATERIAL EVENT NOTICES ...The City will also provide timely notices of certain events to the MSRB. The City will provide notice of any of the following events with respect to the Bonds, if such event is material to a decision to purchase or sell Bonds: (1) principal and interest payment delinquencies; (2) non-payment related defaults; (3) unscheduled draws on debt service reserves reflecting financial difficulties; (4) unscheduled draws on credit enhancements reflecting financial difficulties; (5) substitution of credit or liquidity providers, or their failure to perform; (6) adverse tax opinions or events affecting the tax- exempt status of the Bonds; (7) modifications to rights of holders of the Bonds; (8) Bond calls; (9) defeasances; (10) release, substitution, or sale of property securing repayment of the Bonds; and (11) rating changes (neither the Bonds nor the Ordinance make any provisions for debt service reserves, credit enhancement or liquidity enhancement). In addition, the City will provide timely notice of any failure by the City to provide information, data, or financial statements in accordance with its agreement described above under "Annual Reports." The City will provide each notice described in this paragraph to the MSRB. AVAILABILITY of INFORMATION ...Effective July 1, 2009 (the "EMMA Effective Date"), the SEC implemented amendments to the Rule which approved the establishment by the MSRB of EMMA, which is now the sole successor to the nationally recognized municipal securities information repositories with respect to filings made in connection with undertakings made under the Rule after the EMMA Effective Date. In connection with its continuing disclosure agreement entered into with respect to the Bonds, the City will file all required information and documentation with the MSRB in electronic format in accordance with MSRB guidelines. Access to such filings will be provided, without charge to the general public, by the MSRB. The City will continue to make information filings, including material event notices, with the Texas State Information Depository (the "SID") so long as it is required to do so pursuant to the terms of any undertakings made under the Rule prior to the EMMA Effective Date. The Municipal Advisory Council of Texas (the "MAC") has been designated by the State and approved by the SEC staff as a qualified SID. The address of the MAC is 600 West 8th Street, P.O. Box 2177, Austin, Texas 78768-2177, and its telephone number is 5121476-6947. LIMITATIONS AND AMENDMENTS The City has agreed to update information and to provide notices of material events only as described above. The City has not agreed to provide other information that may be relevant or material to a complete presentation of its financial results of operations, condition, or prospects or agreed to update any information that is provided, except as described above. The City makes no representation or warranty concerning such information or concerning its usefulness to a decision to invest in or sell Bonds at any future date. The City disclaims any contractual or tort liability for damages resulting in whole or in part from any breach of its continuing disclosure agreement or from any statement made pursuant to its agreement, although holders of Bonds may seek a writ of mandamus to compel the City to comply with its agreement. The City's continuing disclosure agreements for the Bonds may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions, as so amended, would have permitted an underwriter to purchase or sell the Bonds in the primary offering of such Bonds in compliance with the Rule, taking into account any amendments or interpretations of the Rule since such offering as well as such changed circumstances and (2) either (a) the registered owners of a majority in aggregate principal amount (or any greater amount required by any other provision of the respective Ordinance that authorizes such an amendment) of the outstanding Bonds consent to such amendment or (b) a person that is unaffiliated with the City (such as nationally recognized Bond Counsel) determines that such amendment will not materially impair the interest of the registered owners and beneficial owners of such Bonds. The City may also amend or repeal the provisions of the continuing disclosure agreements if the SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would not 52 prevent an underwriter from lawfully purchasing or selling the Bonds in the primary offering of such Bonds. If the City amends its agreements, it must include with the next financial information and operating data provided in accordance with its agreement described above under "Annual Reports" an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of information and data provided. COMPLIANCE WITH PRIOR UNDERTAKINGS... During the last five years, the City has complied in all material respects with all continuing disclosure agreements made by it in accordance with SEC Rule 15c2-12. FINANCIAL ADVISOR First Southwest Company is employed as Financial Advisor to the City in connection with the issuance of the Bonds. The Financial Advisor's fee for services rendered with respect to the sale of the Bonds is contingent upon the issuance and delivery of the Bonds. First Southwest Company, in its capacity as Financial Advisor, has relied on the opinion of Bond Counsel and has not verified and does not assume any responsibility for the information, covenants and representations contained in any of the legal documents with respect to the federal income tax status of the Bonds, or the possible impact of any present, pending or future actions taken by any legislative or judicial bodies. In the normal course of business, the Financial Advisor may also from time to time sell investment securities to the City for the investment of bond proceeds or other funds of the City upon the request of the City. The Financial Advisor to the City has provided the following sentence for inclusion in this Official Statement. The Financial Advisor has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to the City and, as applicable, to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Financial Advisor does not guarantee the accuracy or completeness of such information. AUTHENTICITY OF FINANCIAL DATA AND OTHER INFORMATION The financial data and other information contained herein have been obtained from City records, audited financial statements and other sources which are believed to be reliable. There is no guarantee that any of the assumptions or estimates contained herein will be realized. All of the summaries of the statutes, documents and resolutions contained in this Preliminary Official Statement are made subject to all of the provisions of such statutes, documents and resolutions. These summaries do not purport to be complete statements of such provisions and reference is made to such documents for further information. Reference is made to original documents in all respects. INITIAL PURCHASER After requesting competitive bids for the Bonds, the City accepted the bid of (the "Initial Purchaser of the Bonds") to purchase the Bonds at the interest rates shown on the cover page of the Official Statement at a price of par plus a cash premium of $ .The Initial Purchaser of the Bonds can give no assurance that any trading market will be developed for the Bonds after their sale by the City to the Initial Purchaser of the Bonds. The City has no control over the price at which the Bonds are subsequently sold and the initial yield at which the Bonds will be priced and reoffered will be established by and will be the responsibility of the Initial Purchaser of the Bonds. FORWARD-LOOKING STATEMENTS DISCLAIMER The statements contained in this Official Statement, and in any other information provided by the City, that are not purely historical, are forward-looking statements, including statements regarding the City's expectations, hopes, intentions, or strategies regarding the future. Readers should not place undue reliance on forward-looking statements. All forward-looking statements included in this Official Statement are based on information available to the City on the date hereof, and the City assumes no obligation to update any such forward-looking statements. The City's actual results could differ materially from those discussed in such forward-looking statements. The forward-looking statements included herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal, and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers, business partners and competitors, and legislative, judicial, and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive, and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond the control of the City. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward-looking statements included in this Official Statement will prove to be accurate. 53 CERTIFICATION OF THE OFFICIAL STATEMENT At the time of payment for and delivery of the Bonds, the City will furnish a certificate, executed by proper officers, acting in their official capacity, to the effect that to the best of their knowledge and belief: (a) the descriptions and statements of or pertaining to the City contained in its Official Statement, and any addenda, supplement or amendment thereto, on the date of such Official Statement, on the date of sale of said Bonds and the acceptance of the best bid therefor, and on the date of the delivery, were and are true and correct in all material respects; (b) insofar as the City and its affairs, including its financial affairs, are concerned, such Official Statement did not and does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (c) insofar as the descriptions and statements, including financial data, of or pertaining to entities, other than the City, and their activities contained in such Official Statement are concerned, such statements and data have been obtained from sources which the City believes to be reliable and the City has no reason to believe that they are untrue in any material respect; and (d) there has been no material adverse change in the financial condition of the City since the date of the last audited financial statements of the City. The Ordinance authorizing the issuance of the Bonds will also approve the form and content of this Official Statement, and any addenda, supplement or amendment thereto, and authorize its further use in the reoffering of the Bonds by the Initial Purchasers. /s/ MARK BURROUGHS Mayor City of Denton, Texas ATTEST: /s/ JENNIFER K. WALTERS City Secretary 54 APPENDIX A GENERAL INFORMATION REGARDING THE CITY LOCATION ...The City of Denton is located in the northern portion of the Dallas/Fort Worth Consolidated Statistical Area (CSMA). The City is a part of the DallaslFort Worth Metroplex, and is situated at the apex of a triangle based by Dallas (38 miles to the southeast) and Fort Worth (36 miles to the southwest). The City has excellent access to and from all parts of the area. ECONOMIC FUTURE ...The fiscal year 2008-2009 brought exciting news in economic development. Listed below are just a few of the highlights. MAJOR EMPLOYER ~ IND USTRIAL NEWS • Aldi Foods completed construction of their 500,000 square feet distribution center. The company also improved Westcourt Road as part of their project and a condition of their tax abatement. The Denton distribution center will employ approximately 100 and will service more than 25 Aldi grocery stores in the North Texas area. The $50 million project is scheduled to be fully operational February 2010. • Fastenal Company completed its 200,000 square feet distribution center in November 2008. Fastenal is an industrial fastener and supply company. The Denton facility will employ approximately 200 when in full operation and will serve as the company's regional headquarters and training center. The company estimates their investment at $16 million. • Pratt Industries continued construction on their 40,000 square feet Materials Recycling Facility (MRF) at the City's landfill. The project is a partnership program with the City of Denton to provide recycling services to the community. • Tetra Point Fuels completed phase one construction of their ethanol fuel plant at the City's landfill. The project will locate Tetra Point Fuels adjacent to the future Pratt Industrials recycling facility. Tetra Point Fuels will recycle all containers for their source materials. In addition, the company is working with the University of North Texas on a wetlands rehabilitation program. DEVELOPMENT AT DENTON MUNICIPAL AIRPORT The arrival of the Denton Municipal Airport's new air traffic control tower in May of 2004 precipitated a reclassification of air space from Class G to Class D during daily operation hours of 8 a.m. and 8 p.m. and increased our corporate jet traffic. • Denton Municipal Airport opened a new $1.2 million terminal and completed realignment of a taxiway providing a secondary emergency runway in 2008. The airport's control tower supports corporate jet traffic by providing Class D airspace from 8 a.m. to 8 p.m. daily. In February 2010, the tower's operating hours are scheduled to expand from 6 a.m. to 10 p.m. daily. In 2009, airport business operators completed a total of $5 million in office, hangar, and maintenance facility construction totaling over 100,000 square feet. A construction grant for $1.2 million (95%, TXDOT and 5%, City of Denton) has received approval to construct 2,035 feet of new taxiway that will open up an additional 22 acres for airport master plan development. TXDOT will additionally fund an $8.5 million runway expansion from 6,000 to 7,000 feet in 2010, enhancing existing business fleet operating capacity. Once approved, a pending Foreign Trade Zone application that includes the airport, surrounding businesses and the University of North Texas Discovery Park research facility will leverage additional future airport business investment. RETAIL NEWS ~ Construction of the mixed-use development known as Unicorn Lake continues. The master-planned center incorporates the urban style development of residential over retail along the lake. Construction of the Villas of Tuscan Hills, a 106 lot residential community that overlooks the lake, is currently underway with luxury homes selling from $400,000- $700,000. Dogwood Estates, an independent living community, the Brick House Gym, Cinemark, Pour House Grill, Washington Federal Savings and Loan, and Towne Center Bank represent some of the businesses that have located in the development. Cafe China, Beth Marie's Ice Cream, Curves and other retail occupy a new 20,000 square feet retail center. In addition, the Hilton Homewood Suites and several new medical offices opened in 2008-09. A-1 • The Rayzor Ranch Market Place is nearing completion of the construction of Highway 380 in order to complete the road improvements prior to the opening of the retail center. WalMart and Sam's received their building permits and began construction in 2009. Allegiance Hillview Development also began construction of two retail buildings totaling approximately 30,000 square feet on the property. Several restaurants and local banks have also received building permits. • The Rayzor Ranch Towne Center development experienced additional medical related activity. Cook's Children's Hospital purchased a tract at the southern portion of the property and began the development process in 2009 for a treatment facility. Select Medical opened their 52-bed brain trauma and spinal injury hospital. The estimated project value of both the Market Place and Towne Center phases is estimated at $1 billion. • Three new restaurants were built in 2008-09: Red Lobster located near The Olive Garden, On The Border and Texas Roadhouse. Cafe China, and Cafe Deluxe located in the Unicorn Lake development. HEALTHCARE INDENTON The medical sector continues to grow in Denton with thirteen medical-related facilities being built with an estimated valuation of $6.3 million. Two new pharmacies, The Prescription Shop and Walgreens, opened in 2008-09 valued at approximately $1.8 million. OTHER DEVELOPMENTS • LA Fitness completed construction of their 45,000 square feet fitness center. Office/warehouse activity occurred in three separate business parks, with a total of more than $5 million in estimated valuation. • A surge of hotel activity occurred in 2008-09. Holiday Inn, Candlewood Suites and LaQuinta Inn obtained building permits with combined estimated valuation of $17.8 million. Best Western, Hilton Homewood Suites, and the Courtyard by Marriott opened during the same period with combined estimated valuation of $22.5 million. [The Remainder of This Page Left Blank Intentionally] A-2 INDUSTRY AND BUSINESS Major Employers Approximate Number of Employer Description Employees University of North Texas Higher Education 7,949 Denton Independent School District Education 2,600 Denton State School Mental Healthcare 1,533 Peterbilt Headquarters and Plant Diesel Trucks 1,450 Denton County Government 1,441 City ofDenton Government 1,319 Texas Woman's University Higher Education 855 DentonRegional Medical Center Hospital/Healthcare 850 Presbyterian Hospital of Denton Hospital/Healthcare 800 Thermadyne Industries-Victor Equipment/Tweco Welding Equipment 600 Sally Beauty Company Intemational Headquarters Beauty Supply Distributor 450 Anderson Merchandisers Distribution 450 Progressive Industries MHMR Government-State Agency 302 FEMA (Regional HQ & Call Center) (1) Government-Federal 300 James Wood Auto Park Car/Truck Sales/Service 280 Senior Care Health and Rehabilitation Center Retirement/Rehabilitation 200 MorrisonMilling Flour Grain Mill 200 United Copper Industries Copper Wire 196 DentonRehabilitationanl Nursing Center Retirement/Rehabilitation 180 Wells Fargo Financial Institution 175 Austin Baker Industries Automotive Air Conditioning Parts 170 Jostens Class Ring Manufacturer 167 Tetra Pack Aseptic Packaging 165 Safety Kleen Systems Chemical Recycling 164 Skyview Living Center of Denton ICF/MR Residential Care Facility 150 DeCrane Aerospace Precision Pattern Interiors Jet Interior Manufacturing 150 Russell Newman Ltd Textiles 150 DATCU Financial Institution 15 0 The Vintage Retirement/Nursing Home 140 Mayhill Hospital Hospital/Healthcare 130 Lake Forest Good Samaritan Village Retirement Center 130 Denton Good Samaritan Village Retirement Center 126 General Telemarketing International Call Center 120 Denton Publishing Company Newspaper 106 Ben E. Keith Beers Distribution 103 Integrated Alliance, LP Call Center 100 North Texas Hospital Hospital/Healthcare 100 Bill Utter Ford Car/Truck Sales/Service 100 Hulcher Services Railroad Emergency Response 100 Starlite Sign Sign Manufacturer 100 Mayday Manufacturing/Tailwind Technologies Aerospace MachinedParts 100 (1) Up to 1,100 during a disaster relief event. Source: City of Denton and Denton Chamber of Commerce Economic Development Offices. Denton is proud to be home to nearly 41 companies and institutions that employ 100 or more people, several of them representing corporate, regional and international headquarters. Well over 100 companies that produce, manufacture, and distribute goods all over the world call Denton home. More than 4,500 companies choose to do business in Denton. With small, medium, and large businesses operating in a variety of industries, diversity is strength in Denton. Statistics show most of these workers are skilled and receive their training right here in Denton. A-3 ECONOMIC A~ POPULATION GAINS ...Historical population totals from U.S. Census depict Denton's consistent population increases commensurate with Denton's steady economic growth. 1940 Census -11,192 1950 Census - 21,345 1960 Census - 26,844 1970 Census - 39,874 1980 Census - 49,079 1990 Census - 66,270 2000 Census - 80,537 estimated 2010 Population is 121,374 (1) estimated 2010 Population is 124,746 (1) City of Denton Population Estimate updated March 30,2009 (2) University of North Texas' Center for Economic Development and Research The City's ascension toward a top economic position in Texas is attributable to the steady influence of governmental activity that include the annual expansion of the two state-supported universities, and due to several desirable environmental factors. Denton is located in a rich agricultural, oil and gas production region; is part of the Dallas/Fort Worth Metroplex; has proximity to three of Texas' largest reservoirs (Lake Texoma is only 40 miles from Denton); a mild climate; and the influential aspects of social, cultural and educational advantages have prompted professional workers to select Denton as their residence. ECONOMIC RANII~NNG ...The following data were taken from the U.S. Census Bureau's 2008 American Community Survey. of Population Whose Age is: 0-19 25.2% 20-34 35.8% 35-54 22.7% 55-64 8.0% 65 and over 8.4% Number of Households 36,711 City of Denton Median Household Income $46,424 City of Denton Household Income $250,000 + 2.2% $100,000-$199,999 15.0% $50,000-$99,999 29.6% $35,000-$49,000 15.8% $25,000-34,999 11.9% Less than or equal to $24,999 25.5% City of Denton Population by Occupation Agriculture, forestry, fishing and hunting, and mining 0.7% Construction 7.9% Manufacturing 7.4% Wholesale Trade 2.5% Retail trade 15.3% Transportation, warehousing, and utilities 3.8% Information 2.0% Finance and insurance, real estate rental and leasing 4.6% Professional, scientific, and management, and administrative and waste management services 6.7% Educational Services, and health care and social assistance 30.2% Arts, entertainment, and recreation, and accommodation, and food services 11.7% Other services, except public administration 4.9% Public Administration 2.1% Source: U. S. Census Bureau, 2008 American Community Survey. A-4 EMPLOYMENTILABOR FORCE ...According to the Texas Workforce Commission, the November 2009 available workforce in Denton is 63,857. Additionally, Denton is fortunate to draw workers from the Dallas and Fort Worth MSA's representing 6.7 million people, according to the Census 2008 American Community Survey, as well as north to southern Oklahoma. EDUCATION Denton is home to the University of North Texas, founded in 1890, and Texas Woman's University, founded in 1901. North Central Texas College, established in 1924, built an extension campus just outside Denton's extraterritorial jurisdiction (ETJ) in adjacent city, Corinth. The two universities and community college have a combined enrollment of more than 53,438 students and total employment of approximately 8,800 total employees.. With an enrollment of over 36,206, the University of North Texas exceeds the combined enrollment of Southern Methodist University in Dallas, Texas Christian University in Fort Worth and Rice University in Houston. Texas Woman's University has an approximate enrollment of 10,932 in Denton with an additiona12,426 students attending in Dallas and Houston. The University of North Texas (UNT) campus comprises a land area of more than 875 acres that includes Discovery Park, UNT's 285-acre research park. The University encompasses nine colleges and schools of study and offers Bachelor's degrees in 97 fields, Master's degrees in 101 areas and Doctoral programs in 49 disciplines. UNT maintains a low 20:1 student-faculty ratio more prevalent among private rather than public institutions. Named one of America's 100 Best College Buys for 14 consecutive years, UNT is additionally listed among America's 100 Most Wired Colleges. Texas Woman's University (TWU), a major state-supported teaching and research institution, it's the nation's largest public university attended primarily by women, who comprise 90% of attending students. Through its seven schools and colleges, TWU offers 59 programs leading to a Bachelor's degree, 67 Master's degree fields, and Doctoral degrees in 24 specialization areas. TWU experienced a 7 percent growth in enrollment from 2008 to 2009 and was ranked among the nation's top 20 universities with the most diverse student populations by U.S. News and World Report in 2009. TWU's graduate programs in occupational therapy and physical therapy were ranked among the nation's best (U.S. News and World Reports 2009 Best Graduate Schools). In 2008, TWU's Executive MBA program was ranked largest in the state by the Executive MBA Council, and in 2009, the American Association of Colleges of Nursing ranked TWU's doctoral nursing program the largest in the country. The Center for Measuring University Performance ranked TWU among the top 115 public universities nationwide in the number of doctoral degrees awarded. North Central Texas College (NCTC), established in 1924, offers Associate Degrees in a number of fields and core college requirements for students transferring to UNT and TWU to complete their Bachelor's degrees. The student population of NCTC's campus in the adjacent city of Corinth is just over 6,300. The administration anticipates the student population to increase to 12,000 in the next few years. NCTC serves the citizens of Denton with quality education by offering a broad scope of educational choices and offers the local business community educational options as well. The competitive need to keep employees current with modern technology and methodology is easier due to NCTC's customized training which teaches curriculum developed closely with business management to ensure individual company needs are met. In 2007 the college collaborated with regional gas drilling production companies experiencing a critical shortage in trained professionals to develop and launch NCTC's newest Associates Degree program in Gas Energy Production Management. Denton Independent School District (DISD) encompasses almost 180 square miles and continues to be one of north Texas' fastest-growing school districts. Over 22,850 students enrolled for the 2009-2010 school year in the district's 34 schools that include 21 elementary schools (grades K-5), six middle schools (6-8), three high schools (9-12), one advanced technology complex (ll-12), one early childhood center, and two alternative schools. A second early childhood center will open in August 2010. Voters approved a November 2007 bond package for $282M to fund two new elementary schools, one new middle school, design plans fora 4th comprehensive high school, additional science labs and prep rooms, and safety and security technology enhancements in all district schools. The district's "student centered" approach supports strong individualized instruction and smaller school size. DISD offers classes at each school for students who experience learning disabilities or handicaps. Counselors, speech and language specialists, psychologists and reading and diagnostic consultants are available for all grade levels. DISD offers a number of advanced placement credit classes and dual high schooUcollege credit classes and its students routinely place among top recipients in state and national academic, fine arts, career technology, and athletic competitive events. The district's LaGrone Advanced Technology Complex offers state-of the-art facilities and training in nine advanced disciplines and serves as a model for the region and surrounding states. Denton State Supported Living Center (formerly Denton State School) is one of the country's most modern and progressive educational institutions for mentally-disabled Texas residents. This state-supported facility is located on a 200-acre site paid for by Denton citizens. Present facilities include residences that accommodate 580 students, more than 20 buildings for physically handicapped individuals, and a 32 bed acute hospital with supporting facilities such as X-ray, laboratory, dental, and pharmaceutical. Additional buildings include a modern administration building, an academic building, laundry facility, chapel, maintenance shop and a warehouse. The school has a staff of 1,535 with an annual budget of over $71M. A-5 Denton Universities Expand ...Texas Woman's University (TWU) has grown dramatically. Student enrollment at the University's home campus in Denton increased 68% from 2001-2009 to just over 13,330 students. Almost half of TWU students (41%) are graduate students. Similar growth at the University's Dallas and Houston satellite nursing campuses necessitated recent construction projects. A $40M TWU Institute of Health Sciences-Houston facility opened in August 2006 and a $56M TWU Institute of Health Sciences-Dallas facility broke ground in 2009. TWU leads as a provider of critically needed health care professionals, boasting the nation's 1 lth largest College of Nursing, and largest nursing doctoral program. TWU is proud of its diversity; minority students comprise 43% of students. TWU is one of only 16 U.S. universities, and the only Texas university selected to participate in the American Democracy Project Civic Agency initiative focused on encouraging students to be civic leaders in their communities. University of North Texas (UNT) -Among the nation's top 50 schools for Hispanic and African American students, UNT has the largest residential campus in the North Texas Region and is the largest provider of online credit courses among Texas public universities. UNT's Discovery Park, a 285-acre, 553,000 square foot facility is home to UNT's Engineering School and Center for Advanced Research and Technology (CART), one of the nation's premier materials science and engineering research facilities. CART has been the recipient of almost $16 million in defense funding the past five years and provides researchers with a unique grouping of microscopes for nanotechnology research and for other critical advancement fields. Bachelor and Master degree programs in Mechanical and Energy Engineering were added in 2007 to UNT's existing College of Engineering programs in electrical engineering, materials science, computer science, and engineering technology. Anew $33.2M Life Sciences Building featuring open research laboratories that promote collaborative and interdisciplinary research will complete in May 2010. In 2009 UNT broke ground on two projects: a $60 million Gold LEED Certified Business Leadership Complex, focused on global economic and business disciplines, and a $78M, 30,000 seat stadium; both due to complete in 2011. AGRICULTURE ...Northwestern Denton County is one of the more diversified agricultural areas in Texas. With soil types ranging from rich black to sandy loam, and good, soft artesian water, it is ideal for diversified farming and livestock. Principal crops are corn, wheat, oats, hay, grain sorghums and peanuts. Beef cattle, sheep, chickens and turkeys contribute a substantial and steady income annually to the farmers and ranchers of the County. Avery significant concentration of valuable world champion horse farms east of the City's corporate boundaries provide a prosperous economic resource for the area. Products significant to the economy are horses, beef, eggs, wheat, grain sorghums, hay, and nursery crops. TRANSPORTATION ...Denton is located only 20 miles northeast of the Dallas-Fort Worth International Airport which began operations in January 1974. In addition, Dallas' Love Field Airport and Fort Worth's Meacham International Airport are inclose proximity to Denton. Alliance Airport, located about 20 miles southwest of Denton, is the only purely industrial airport in the world. Accompanying the Alliance Airport are five business parks. Together, Alliance's access to highway, rail and air transportation offers an excellent opportunity for future industrial growth. Denton County Transportation Authority's (DCTA) priority project for the future is the construction of a regional passenger rail line which connects Carrollton and Denton. The DCTA Rail will meet growing transportation demands in eastern Denton County. The project will also provide a logical extension of the Dallas Area Rapid Transit (DART) Northwest Corridor line. Service is expected to be operational in summer 2011. The Kansas City Southern Railroad and the Union Pacific Railroad provide daily service to Denton. Full switching is available, providing direct access to all major markets across the nation. GreyhoundlTrailways serves Denton through Dallas and Oklahoma City. Motor freight in Denton is included in the D/FW commercial trade zone and is served by major freight carriers. BANI~NNG ...There are 25 banks in Denton: Access First Capital, Bank of America, N.A., Chase, Compass Bank, Wells Fargo Bank, N.A., Farmers and Merchants State Bank, First Convenience, First State Bank, Provident Bank, Point Bank, First National Bank, Guaranty Bank, M and T Bank, Margbank, Meridian Bank, State Bank and Trust, Inwood National Bank, Synergy, Washington Mutual, Denton's only locally-owned bank, Northstar Bank, Washington Federal Savings, Wachovia, Towne Center Bank, DATCU Credit Union, and First United Bank with Denton's first "Banco" branch specializing in serving Denton's Hispanic community. A-6 GROWTH INDICES City State Fiscal Building Values (millions) (1) Water Sewer Electric Unemployment Unemployment Year Commercial Residential Total Customers Customers Customers Rates Rates (2) 2005 $ 69 $ 260 $ 329 27,584 25,695 41,846 3.83% 5.39% 2006 61 214 275 28,805 26,951 42,186 3.97% 4.94% 2007 64 219 283 29,783 28,020 43,607 3.84% 4.35% 2008 131 157 288 29,679 28,019 44,375 4.03% 4.84% 2009 132 131 263 30,288 28,674 45,153 5.96% 7.88% (1) New Construction Only, Includes Multi-Family as Commercial and Duplexes as Residential (2) Source: Texas Workforce Commission. MEDICAL ...Denton has become a regional medical destination serving north Texas and southern Oklahoma. Denton Regional Medical Center is a 208-bed community hospital that serves the growing population of Denton, Wise, Cooke, and Montague Counties. The hospital offers afull-spectrum of healthcare including advanced open-heart surgery and neurosurgery programs. Denton Regional became the first hospital in Denton County to earn the prestigious Level II Chest Pain Center accreditation by the international non-profit Society of Chest Pain Centers and is pursuing the Level III Trauma Center designation. Since 2005, the hospital has opened a new $7 million, 13,500 square-foot day surgery center and a new hospital floor housing a 29-bed, $19M progressive care unit. Denton Regional's Center for Cancer and Blood Disorders, a comprehensive cancer diagnostic and treatment center integrating education, nutrition, and rehabilitation services opened in 2008. Texas Health Presbyterian Hospital of Denton (formerly Denton Community Hospital) celebrated the grand opening of its 272,538 square-foot, 255-bed facility and an 80,000 square-foot medical office building in 2005. The hospital expanded its Women's Center services in 2006 with the opening of a Level III Neonatal Intensive Care Unit serving Denton and its surrounding communities. North Texas Hospital opened a 60,000 square foot specialty hospital featuring eight surgical suites and 16 inpatient beds in 2005. In 2007, North Texas Hospital became one of only four hospitals in the Dallas-Fort Worth region to offer patients improved surgical outcomes by utilizing the $1M, state-of the-art DaVinci robotic surgical suite. Other new hospitals gaining Denton its reputation as a regional medical destination include Mayhill Hospital, a 40,000 square-foot facility featuring physical rehabilitation and a behavioral health services hospital that opened in 2005 and Integrity Transitional Hospital, a 38,500 square foot, $16 million dollar long-term acute care hospital that opened in 2007. Denton's rapid medical growth continued in 2008, adding more than 123,000 square feet of new medical offices and treatment facilities; most notably the new 44,000 square foot, $20 million Select Medical Rehabilitation Hospital, modeled after the renowned Kessler institute for Rehabilitation. RECREATION ...Lake Ray Roberts, located approximately 8 miles northeast of the City's corporate boundary on the Elm Fork of the Trinity River, is a major water conservation and flood control facility of more than 799,600 acre-feet of storage that allows for an abundance of parks and other water and outdoor related recreational facilities. The nine mile Greenbelt HikeBikelEquestrian Trail, located between Lake Ray Roberts and Lake Lewisville, is a cooperative project made possible by the Army Corps of Engineers and the Cities of Denton and Dallas. Nearby Lake Lewisville, one of North Texas' largest lakes is one of Texas' most popular recreation areas. Lake Lewisville has a shoreline of 183 miles located entirely in Denton County. Lake Lewisville attracts over 3,000,000 visitors to its shores annually. The upper reaches of the lake are only about 3 miles east of the Denton City Limits, while the dam is 15 miles from downtown Denton. Grapevine Lake, another large body of water created by the U.S. Army Corps of Engineers, is located in Denton and Tarrant Counties. The dam is 23 miles from Denton. Parks and recreational areas abound on the shores of Lake Ray Roberts, Lake Lewisville, and Grapevine Lake. Boating fishing, hunting, swimming and all water sports are the favorite recreational pastimes, which, because of this area's favorable climate, are in use the year round. The City of Denton Parks and Recreation Department and the Denton Independent School District have created a partnership to produce a signature water recreation attraction. The $12.16 million Waterworks Park opened in 2003 and features four water slides, a children's play pool, a 600 ft. long continuous flow tubing river, outdoor amphitheater, pavilions, a sand volleyball court and two indoor pools. Other recently completed CIP projects include the renovation and expansion of the Denton Civic Center, construction of Denton's first skate park "Skate Works", the installation of a new water slide at Civic Center Pool, construction of Lake Forest Park and a dog park named "Wiggly Field", replacement of the playground at Avondale Park to maintain compliance with national playground safety guidelines and the installation of a bridge to enhance access to the park and continue the expansion of the department's pedestrian trail system. The Parks and Recreation Department is also looking to the future with the purchase of a 196 acre park site that will eventually become the home of athletic fields, walking trails, and a large multi- generationalrecreation and fitness center. A-7 APPENDIX B EXCERPTS FROM THE CITY OF DENTON, TEXAS COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended September 30, 2009 The information contained in this Appendix consists of excerpts from the City of Denton, Texas Comprehensive Annual Financial Report for the Year Ended September 30, 2009, and is not intended to be a complete statement of the City's financial condition. Reference is made to the complete Report for further information. APPENDIX C FORM OF BOND COUNSEL'S OPINION APPENDIX D DESCRIPTION OF SENATE BILL 7 AND THE TEXAS MUNICIPAL POWER AGENCY TEXAS MUNICIPAL POWER AGENCY ...TMPA is governed by a Board of Directors made up of two representatives from each Member City and is empowered to plan, finance, acquire, construct, own, operate and maintain facilities to be used in the business of generation, transmission and sale of electric energy to the Member Cities. The TMPA Power Sales Agreement requires TMPA to prepare annual budgets, projecting its Annual System Costs for the succeeding year, including debt service requirements on its bonds, and to submit the same to the Member Cities. Based on these and other budgetary facts and estimates, TMPA sets the rates and charges to be paid by the Cities for the ensuing year. TMPA's Generation Unit. TMPA's power supply source consists of the Gibbons Creek Steam Electric Station located in Grimes County, Texas, and includes a single net 470 megawatt ("MW") Wyoming Powder River Basin coal fueled steam electric plant, reservoir, railroad spur, associated transmission facilities, an adjacent surface mine no longer in use and related properties and equipment ("Gibbons Creek"). Gibbons Creek began commercial operation on October 1,1983. Gibbons Creek was designed to burn lignite mined at a mine located on approximately 18,000 acres adjacent to the facility ("Gibbons Creek Mine") and owned by TMPA. In 1996, TMPA commenced various modifications to Gibbons Creek, including the conversion of the plant to burn western coal mined in the Wyoming Powder River Basin. The modifications included the installation of an advanced design steam path turbine and the installation of additional superheat sections. These modifications have increased the generation capacity and the operating efficiency of the plant. The modifications made to Gibbons Creek relating to the fuel conversion were completed in the summer of 1997. Mining operations were halted by TMPA at the Gibbons Creek Mine in February 1996. The modifications to the plant and the change in fuel were made with the expectation that they would provide fuel cost savings in comparison with the operation of the Gibbons Creek Mine for fuel, to reduce the planned outage cycle at Gibbons Creek and to allow TMPA to achieve compliance with the federal Clean Air Act ("FCAA") without the need for additional sulfur dioxide ("S02") allowances based on current regulations. In 2000 and 2005, TMPA commissioned separate plant life assessment studies of Gibbons Creek to help assess the impact of the fuel switch on the expected life of Gibbons Creek. Based on capital projects completed at the plant and improved maintenance practices, the 2005 assessment projected that the life expectancy of Gibbons Creek as a base load unit would be 2035. TMPA's Transmission Facilities. TMPA-owned transmission system consists of 345-kV and 138-kV switchyard facilities and transmission line facilities in the vicinity of the Gibbons Creek Station, as well as additional 345-kV and 138-kV lines and substation facilities in Brazos, Collin, Dallas, Denton, Grimes, Hunt, Montague, Robertson, Rockwall, and Wise counties of Texas. These facilities provide 345-kV ties to Oncor Electric Delivery and CenterPoint Energy at several points throughout the ERGOT system. These facilities provide ties to the Member Cities, TXU Energy, CenterPoint Energy, Cap Rock Energy Corporation and Brazos Electric Power Cooperative, Inc. at a number of points in the ERGOT system. TABLE D1-OUTSTANDING DEBT (1) Fiscal Total Total Year Taxable Tax-Exempt Less Ending Outstanding Fixed Rate Debt Commercial Commercial Reserve Total Net Debt Service 9/30 Principal Interest Total Paper (3) Paper (4) Fund (5) Principal Interest Total 2010 $ 53,481,394 $ 38,521,053 $ 92,002,448 $ 2,199,071 $ 3,970,562 $ - $ 55,498,644 $ 42,673,436 $ 98,172,080 2011 26,174,662 31,797,315 57,971,977 2,334,967 7,320,616 - 28,191,912 39,435,648 67,627,560 2012 26,605,218 31,458,972 58,064,190 2,229,061 8,366,418 - 28,622,468 40,037,201 68,659,669 2013 41,294,852 75,751,918 117,046,770 2,123,156 8,366,418 - 43,312,102 84,224,241 127,536,343 2014 41,497,390 84,955,435 126,452,825 - 8,366,418 - 41,497,390 93,321,853 134,819,243 2015 40,834,054 92,846,186 133,680,240 - 8,366,418 - 40,834,054 101,212,604 142,046,658 2016 39,412,133 94,269,388 133,681,520 - 8,366,418 - 39,412,133 102,635,805 142,047,938 2017 74,955,020 95,568,000 170,523,020 - 86,366,418 104,000,000 48,955,020 103,934,418 152,889,438 2018 10,670,000 490,820 11,160,820 - 131,314,448 - 136,781,363 5,693,905 142,475,268 $ 354,924,723 $ 545,659,087 $900,583,810 $ 8,886,254 $270,804,132 $104,000,000 $ 463,105,086 $ 613,169,111 $1,076,274,197 (1) Source: TMPA. (2) Less TMPA Refunded Bonds. (3) Includes $204.111 million of tax-exempt commercial paper budgeted to be repaid in 2017 and 2018. Estimated interest rates range from 1.90% to 4.00%. (4) Includes $8.069 million of taxable commercial paper budgeted to be repaid annually from 2010 and 2013. Estimated interest rates range from 2.25% to 5.25%. (5) Includes the impact of using $104 million of currently held Reserve Fund Cash to reduce the principal payment in 2017. D-1 In accordance with the TMPA Power Sales Agreement, the City is responsible for a proportion of the costs of TMPA, including debt service, as described above. All payments by the City under the TMPA Power Sales Agreement, including any payments required to be made for TMPA's debt service, constitute an operating expense of the Electric System payable solely from the revenues and receipts of the Electric System. Under the Settlement Agreement, TMPA and the Member Cities have agreed that, unless approved by all of the Member Cities (i) TMPA's existing generation-related debt will be retired as presently scheduled, i.e. by September 1, 2018, (ii) any refinancing of the debt may only be for interest rate savings and may not extend the debt beyond September 1, 2018, (iii) any future financing necessary for the operations of TMPA other than certain transmission debt may only be in the form of debt issued by each of the Member Cities in the same manner as for the Scrubber Project and in the amount of each Member City's proportionate share under the TMPA Power Sales Agreement, and (iv) no debt may be issued by TMPA, nor any other action taken, that would extend the term of the TMPA Power Sales Agreement beyond September 1, 2018 The TMPA Resolution provides that TMPA shall fund certain funds and accounts, including a bond reserve fund, and shall annually maintain rates to produce net revenues equal to at least 1.25 times the debt service on the Revenue Bonds. Amounts collected by TMPA from the Member Cities over and above its requirements for the expenses of operations and maintenance, the payment of debt service and maintaining the funds and accounts relating thereto are rebated back to each Member City as described under "The Electric System -The TMPA Power Sales Contract." SB 7, TMPA ~ TxE MEMBER CITIES ...Several provisions in SB 7 pertain to TMPA and its Member Cities. One of these provisions (the "Debt Retirement Provision") provides that TMPA shall "set as an objective the extinguishment of the agency's debt by September 1, 2000," and further provides that, in the event the objective is not met, TMPA must "provide detailed reasons to the electric utility restructuring legislative oversight committee by November 1, 2000, why the agency was not able to meet this objective." The Debt Retirement Provision goes on to state that each municipal power agency "shall extinguish the agency's indebtedness by sale of the electric facility to one or more purchasers, by way of a sale through the issuance of taxable or tax-exempt debt to the member cities, or by any other method." The Debt Retirement Provision does not provide for any penalty or remedial action to be taken against a municipal power agency for the failure to meet the objective of extinguishing its debt by September 1, 2000. In July 1999, the Board of Directors of TMPA established a Debt Retirement Committee to study and to recommend options for achieving the objective of extinguishing TMPA's debt. Based on the work of the Committee, in October 2000, TMPA submitted to the Joint Committee on Oversight of Electric Utility Restructuring (i.e. the electric utility restructuring legislative oversight committee referred to in SB 7) the report required by the Debt Retirement Provision. The report, in addition to explaining the reasons why TMPA was not able to extinguish all of its debt by September 1, 2000, identified the options explored by the Committee and available to TMPA to reduce TMPA's debt service requirements in the future. The options that are available to TMPA may be affected, and possibly limited, by certain provisions of the TMPA Power Sales Agreement that pertain to asset sales and provisions of the TMPA Resolution that require it to comply with federal requirements that govern the use of facilities that have been financed with proceeds oftax-exempt bonds, among other factors. In addition, SB 7 provides that TMPA may, at its option, use the rate of return method for calculating its transmission cost of service. If the rate of return method is used, the return component for the transmission cost of service ("TCOS") revenue requirement shall be sufficient to meet the transmission function's pro rata share of levelized debt service and debt service coverage ratio and other annual debt obligations; provided that the total levelized debt service may not exceed the total debt service under TMPA's current payment schedule. Any additional revenue generated by this methodology must be applied to reduce TMPA's outstanding indebtedness. This provision of SB 7 allows TMPA to take into account in determining the transmission revenue requirement a portion of the transmission system's share of TMPA debt service as if such debt service was level instead of increasing over time, which accelerates the recovery of that portion of debt service vis-a-vis actual debt requirements. Pursuant to this provision of SB 7, TMPA applied for, and, on February 16, 2001, received from the PUC an order revising and levelizing TMPA's TCOS. On August 1, 2001, the PUC approved a plan for the use of the additional revenues resulting from the levelized TCOS for the reduction of TMPA's debt. The major components for the plan are determination of the transmission portion of TMPA's debt service; calculation of TCOS revenues based on levelized and actual debt service, and identification of the indebtedness instruments that would maximize reduction of debt service. In addition, TMPA has established a debt retirement reserve for purpose of accounting for the additional revenues. As additional revenues are used to retire outstanding indebtedness identified in the PUC approved plan, the debt retirement reserve will be relieved. In accordance with the TMPA plan, which was approved by the PUC, the leveling of TMPA's TCOS produced additional revenues of approximately $18.3 million dollars during the years 2001 through 2006, which have been invested under escrow agreements and used to pay down approximately $28.3 million in TMPA debt due for payment in the years 2007 through 2017. SB 7 also provides that the PUC, if requested by a Member City of TMPA, shall examine all areas within the Member City's service area that are also certificated to one or more other retail electric utilities and, after notice and hearing, the PUC may amend the retail electric utilities' CCNs so that only one retail electric utility is certificated to provide distribution services in the area, provided that an application is filed with the PUC prior to September 1, 2000 and is limited to single certification of the area within the Member City's boundaries as of February 1,1999 and that the right of an electric utility or an electric cooperative to serve its existing customers, including any property owned or leased by any customer, is preserved. See "The Electric System -Electric System's Service Area and Service Area Composition" for a discussion of actions that have been taken by the City under this provision of SB 7. D-2 ESCROW AGREEMENT THIS ESCROW AGREEMENT, dated as of , 2010 (herein, together with any amendments or supplements hereto, called the "Agreement") is entered into by and between the Texas Municipal Power Agency (herein called the "Agency") and U.S. Bank National Association, Dallas, Texas, as escrow agent (herein in that capacity, together with any successor in such capacity, called the "Escrow Agent"). The addresses of the Agency and the Escrow Agent are shown on Exhibit "A" attached hereto and made a part hereof. WITNESSETH: WHEREAS, the Agency heretofore has issued and there presently remain outstanding the obligations described in Exhibit "B" attached hereto (the "Defeased Obligations"); and WHEREAS, the Defeased Obligations are scheduled to mature in such years, bear interest at such rates, and be payable at such times and in such amounts as are set forth in Exhibit "C" attached hereto and made a part hereof; and WHEREAS, in accordance with the provisions of subchapter C of Chapter 1207, V.T.C.A., Government Code, as amended, the Agency is authorized and empowered to deposit available funds directly with any place of payment ("Paying Agent") for any of the Defeased Obligations in an amount sufficient to provide for the full payment thereof, and such deposit, if made on or before the payment date for such obligations, shall constitute the making of firm banking and financial arrangements for the discharge and final payment of the obligations being paid; and WHEREAS, when firm banking arrangements have been made for the payment of principal and interest to the maturity or redemption dates of the Defeased Obligations, then the Defeased Obligations shall no longer be regarded as outstanding except for the purpose of receiving payment from the funds provided for such purpose; and WHEREAS, Chapter 1207 further authorizes the Agency to enter into an escrow agreement with any such paying agent for any of the Defeased Obligations, with respect to the safekeeping, investment, administration and disposition of any such deposit, upon such terms and conditions as the Agency and such paying agent, trust company or commercial bank may agree, provided that such deposits may be invested only in direct obligations of the United States of America, including obligations the principal of and interest on which are unconditionally guaranteed by the United States of America, and which may be in book entry form, and that mature and/or bear interest payable at such times and in such amounts as will be sufficient to provide for the scheduled payment of principal and interest on the Defeased Obligations when due (the "Escrowed Securities"); and WHEREAS, the Escrow Agent is a commercial bank that currently acts as the paying agent/registrar for the Defeased Obligations (hereinafter, the term "Paying Agent" shall refer to U. S. Bank National Association acting in the capacity of paying agent/registrar for the Defeased Obligations); and WHEREAS, this Agreement constitutes an escrow agreement of the kind authorized and required by said Chapter 1207; and WHEREAS, Chapter 1207 makes it the duty of the Escrow Agent to comply with the terms of this Agreement and timely make available to the other places of payment, if any, for the Defeased Obligations the amounts required to provide for the payment of the principal of and interest on such obligations when due, and in accordance with their terms, but solely from the funds, in the manner, and to the extent provided in this Agreement; and WHEREAS, the Defeased Obligations have been called for redemption, and the redemption price and the interest thereon to the date of redemption is payable on the date and in the manner set forth in Exhibit "C" attached hereto and incorporated herein by reference as a part of this Agreement for all purposes; and WHEREAS, on March 30, 2010, the Agency will cause funds to be deposited to the credit of the Escrow Fund in an amount sufficient to purchase Escrowed Securities listed and identified in Exhibit "D" attached hereto and incorporated by reference as a part of this Agreement for all purposes; and WHEREAS, the Escrowed Securities shall mature and the interest thereon shall be payable at such times and in such amounts so as to provide moneys which, together with cash balances from time to time on deposit in the Escrow Fund (hereinafter defined), will be sufficient to pay interest and the principal of the Defeased Obligations on the date fixed for redemption thereof; and WHEREAS, to facilitate the receipt and transfer of proceeds of the Escrowed Securities, particularly those in book entry form, the Agency desires to establish the Escrow Fund with the Escrow Agent; and WHEREAS, by execution of this Agreement the paying agent for the Defeased Obligations, U.S. Bank National Association (the "Paying Agent")has acknowledged receipt of this Agreement and its acceptance of the terms and provisions of this Agreement in such capacity. NOW, THEREFORE, in consideration of the mutual undertakings, promises and agreements herein contained, the sufficiency of which hereby are acknowledged, and to secure the full and timely payment of principal of and the interest on the Defeased Obligations, the Agency and the Escrow Agent mutually undertake, promise, and agree for themselves and their respective representatives and successors, as follows: 2 ARTICLE I DEFINITIONS AND INTERPRETATIONS Section 1.01. Definitions. Unless the context clearly indicates otherwise, the following terms shall have the meanings assigned to them below when they are used in this Agreement: "Code" means the Internal Revenue Code of 1986, as amended, or to the extent applicable the Internal Revenue Code of 1954, together with any other applicable provisions of any successor federal income tax laws. "Escrow Fund" means the fund created by this Agreement to be administered by the Escrow Agent pursuant to the provisions of this Agreement. Section 1.02. Other Definitions. The terms "Agency", "Agreement", "Defeased Obligations", "Escrow Agent", "Escrowed Securities" and "Paying Agent", when they are used in this Agreement, shall have the meanings assigned to them in the preamble to this Agreement. Section 1.03. Interpretations. The titles and headings of the articles and sections of this Agreement have been inserted for convenience and reference only and are not to be considered a part hereof and shall not in any way modify or restrict the terms hereof. This Agreement and all of the terms and provisions hereof shall be liberally construed to effectuate the purposes set forth herein and to achieve the intended purpose of providing for the defeasance and discharge of the Defeased Obligations in accordance with applicable law. ARTICLE II DEPOSIT OF FUNDS AND ESCROWED SECURITIES Section 2.01. Deposits in the Escrow Fund. Immediately upon receipt of the funds hereunder, the Escrow Agent shall take delivery of and provide payment for the Escrowed Securities described in Exhibit "D" attached hereto, which shall have been subscribed for by the Agency. Such Escrow Securities shall be deposited into the Escrow Fund and the Escrow Agent shall, upon the receipt thereof, acknowledge such receipt to the Agency in writing. ARTICLE III CREATION AND OPERATION OF ESCROW FUND Section 3.01. Escrow Fund. The Escrow Agent has created on its books a special trust fund and irrevocable escrow to be known as the Texas Municipal Power Agency Series 2003, Series 2004 and Series 2004A Escrow Fund (the "Escrow Fund"). The Escrow Agent hereby agrees that upon receipt thereof it will irrevocably deposit to the credit of the Escrow Fund the funds and the 3 Escrowed Securities described in Exhibit "D"attached hereto. Such deposit, all proceeds therefrom, and all cash balances from time to time on deposit therein (a) shall be the property of the Escrow Fund, (b) shall be applied only in strict conformity with the terms and conditions of this Agreement, and (c) are hereby irrevocably pledged to the payment of the principal of and interest on the Defeased Obligations, which payment shall be made by timely transfers of such amounts at such times as are provided for in Section 3.02 hereof. When the final transfers have been made for the payment of such principal of and interest on the Defeased Obligations, any balance then remaining in the Escrow Fund shall be transferred to the Agency, and the Escrow Agent shall thereupon be discharged from any further duties hereunder. Section 3.02. Payment of Principal and Interest. The Escrow Agent is hereby irrevocably instructed to transfer from the cash balances from time to time on deposit in the Escrow Fund, the amounts required to pay the principal of the Defeased Obligations at their respective maturity dates and interest thereon to such maturity dates in the amounts and at the times shown in Exhibit "C" attached hereto. Section 3.03. Sufficiency of Escrow Fund. The Agency represents, and the Paying Agent agrees, with such agreement evidenced by the completion of the sufficiency certificate of the Paying Agent attached hereto as Exhibit "H",that the amounts deposited into the Escrow Fund, and without regard to the receipts of investment earnings on the Escrowed Securities will assure that the cash balance on deposit from time to time in the Escrow Fund will be at all times sufficient to provide moneys for transfer to the Paying Agent at the times and in the amounts required to pay the interest on the Defeased Obligations as such interest comes due and the principal of the Defeased Obligations as the Defeased Obligations mature, all as more fully set forth in Exhibit "E" attached hereto. If, for any reason, at any time, the cash balances on deposit or scheduled to be on deposit in the Escrow Fund shall be insufficient to transfer the amounts required by each place of payment (paying agent) for the Defeased Obligations to make the payments set forth in Section 3.02 hereof, the Agency shall timely deposit in the Escrow Fund, from any funds that are lawfully available therefor, additional funds in the amounts required to make such payments. Notice of any such insufficiency shall be given as promptly as practicable as hereinafter provided, but the Escrow Agent shall not in any manner be responsible for any insufficiency of funds in the Escrow Fund or the Agency's failure to make additional deposits thereto. Section 3.04. Trust Fund. The Escrow Agent shall hold at all times the Escrow Fund, the Escrowed Securities and all other assets of the Escrow Fund, wholly segregated from all other funds and securities on deposit with the Escrow Agent; it shall never allow the Escrowed Securities or any other assets of the Escrow Fund to be commingled with any other funds or securities of the Escrow Agent; and it shall hold and dispose of the assets of the Escrow Fund only as set forth herein. The Escrowed Securities and other assets of the Escrow Fund shall always be maintained by the Escrow Agent as trust funds for the benefit of the owners of the Defeased Obligations; and a special account thereof shall at all times be maintained on the books of the Escrow Agent. The owners of the Defeased Obligations shall be entitled to the same preferred claim and first lien upon the Escrowed Securities, the proceeds thereof, and all other assets of the Escrow Fund to which they are entitled as owners of the Defeased Obligations. The amounts received by the Escrow Agent under this 4 Agreement shall not be considered as a banking deposit by the Agency, and the Escrow Agent shall have no right to title with respect thereto except as an Escrow Agent under the terms of this Agreement. The amounts received by the Escrow Agent under this Agreement shall not be subject to warrants, drafts or checks drawn by the Agency or, except to the extent expressly herein provided, by the Paying Agent. Section 3.05. Security for Cash Balances. Cash balances from time to time on deposit in the Escrow Fund shall, to the extent not insured by the Federal Deposit Insurance Corporation or its successor, be continuously secured by a pledge of direct obligations of, or obligations unconditionally guaranteed by, the United States of America, having a market value at least equal to such cash balances. ARTICLE IV LIMITATION ON INVESTMENTS Section 4.01. Except as provided in Sections 4.02, 4.03 and 4.04 hereof, the Escrow Agent shall not have any power or duty to invest or reinvest any money held hereunder, or to make substitutions of the Escrowed Securities, or to sell, transfer or otherwise dispose of the Escrowed Securities. Section 4.02. Reinvestment of Certain Cash Balances in Escrow by Escrow A e~nt. In addition to the Escrowed Securities listed in Exhibit "D" hereto, the Escrow Agent shall reinvest cash balances shown in Exhibit "F" attached hereto in zero (0) interest rate United States Treasury Obligations -State and Local Government Series to the extent such Obligations are available from the Department of the Treasury. All such reinvestments shall be made only from the portion of cash balances derived from the maturing principal of and interest on Escrowed Securities that are United States Treasury Certificates of Indebtedness, Notes orBonds -State and Local Government Series. All such reinvestments shall be acquired on and shall mature on the dates shown on Exhibit "F" attached hereto. Section 4.03. Substitutions and Reinvestments. At the discretion of the Agency, the Escrow Agent shall reinvest cash balances representing receipts from the Escrowed Securities, make substitutions of the Escrowed Securities or redeem the Escrowed Securities and reinvest the proceeds thereof or hold such proceeds as cash, together with other moneys or securities held in the Escrow Fund provided that the Agency delivers to the Escrow Agent the following: (1) an opinion by an independent certified public accountant that after such substitution or reinvestment the principal amount of the securities in the Escrow Fund (which shall be noncallable, nonprepayable direct obligations of the United States of America), together with the interest thereon and other available moneys, will be sufficient to pay, without further investment or reinvestment, as the same become due in accordance with Exhibit "C", the principal of, interest on and premium, if any, on the Defeased Obligations which have not previously been paid, and 5 (2) an unqualified opinion of nationally recognized municipal bond counsel to the effect that (a) such substitution or reinvestment will not cause the Defeased Obligations to be "arbitrage bonds" within the meaning of Section 103 of the Code or the regulations thereunder in effect on the date of such substitution or reinvestment, or otherwise make the interest on the Defeased Obligations subject to federal income taxation, and (b) such substitution or reinvestment complies with the Constitution and laws of the State of Texas and with all relevant documents relating to the issuance of the Defeased Obligations. The Escrow Agent shall have no responsibility or liability for loss or otherwise with respect to investments made at the direction of the Agency. Section 4.04. Substitution for Escrowed Securities. Concurrently with the initial deposit by the Agency with the Escrow Agent, but not thereafter, the Agency, at its option, may substitute cash ornon-interest bearing direct noncallable obligations of the United States Treasury (i.e., Treasury obligations which mature and are payable in a stated amount on the maturity date thereof, and for which there are no payments other than the payment made on the maturity date) (the "Substitute Obligations") for non-interest bearing Escrowed Securities, if any, but only if such Substitute Obligations (a) are in an amount, and/or mature in an amount, which is equal to or greater than the amount payable on the maturity date of the obligation listed in Exhibit "D" for which such Substitute Obligation is substituted, (b) mature on or before the maturity date of the obligation listed in Exhibit "D" for which such Substitute Obligation is substituted, and (c) produce the amount necessary to pay the interest on and principal of the Defeased Obligations, as set forth in Exhibit "E" hereto, as verified by a certified public accountant or a firm of certified public accountants. If, concurrently with the initial deposit by the Agency with the Escrow Agent, any such Substitute Obligations are so substituted for any Escrowed Securities, the Agency may, at any time thereafter, substitute for such Substitute Obligations the same Escrowed Securities for which such Substitute Obligations originally were substituted. Section 4.05. Arbitra e. The Agency hereby covenants and agrees that it shall never request the Escrow Agent to exercise any power hereunder or permit any part of the money in the Escrow Fund or proceeds from the sale of Escrowed Securities to be used directly or indirectly to acquire any securities or obligations if the exercise of such power or the acquisition of such securities or obligations would cause any Defeased Obligation to be an "arbitrage bond" within the meaning of the Code. 6 ARTICLE V APPLICATION OF CASH BALANCES Section 5.01. In General. Except as provided in Sections 3.02, 4.02, 4.03 and 4.04 hereof, no withdrawals, transfers, or reinvestment shall be made of cash balances in the Escrow Fund. Following the payment of all amounts with respect to the Defeased Obligations that are secured hereby, any excess held in the Escrow Fund shall be promptly remitted to the Agency. ARTICLE VI RECORDS AND REPORTS Section 6.01. Records. The Escrow Agent will keep books of record and account in which complete and correct entries shall be made of all transactions relating to the receipts, disbursements, allocations and application of the money and Escrowed Securities deposited to the Escrow Fund and all proceeds thereof, and such books shall be available for inspection at reasonable hours and under reasonable conditions by the Agency and the owners of the Defeased Obligations. Section 6.02. Reports. While this Agreement remains in effect, the Escrow Agent annually shall prepare and send to the Agency a written report summarizing all transactions relating to the Escrow Fund during the preceding year, including, without limitation, credits to the Escrow Fund as a result of interest payments on or maturities of the Escrowed Securities and transfers from the Escrow Fund for payments on the Defeased Obligations or otherwise, together with a detailed statement of all Escrowed Securities and the cash balance on deposit in the Escrow Fund as of the end of such period. ARTICLE VII CONCERNING THE PAYING AGENTS AND ESCROW AGENT Section 7.01. Representations. The Escrow Agent hereby represents that it has all necessary power and authority to enter into this Agreement and undertake the obligations and responsibilities imposed upon it herein, and that it will carry out all of its obligations hereunder. Section 7.02. Limitation on Liability. The liability of the Escrow Agent to transfer funds for the payment of the principal of and interest on the Defeased Obligations shall be limited to the proceeds of the Escrowed Securities and the cash balances from time to time on deposit in the Escrow Fund. Notwithstanding any provision contained herein to the contrary, neither the Escrow Agent nor the Paying Agent shall have any liability whatsoever for the insufficiency of funds from time to time in the Escrow Fund or any failure of the obligors of the Escrowed Securities to make timely payment thereon, except for the obligation to notify the Agency as promptly as practicable of any such occurrence. 7 The recitals herein shall be taken as the statements of the Agency and shall not be considered as made by, or imposing any obligation or liability upon, the Escrow Agent. The Escrow Agent is not a party to the proceedings authorizing the Defeased Obligations and is not responsible for nor bound by any of the provisions thereof (except as Paying Agent therefor). In its capacity as Escrow Agent, it is agreed that the Escrow Agent need look only to the terms and provisions of this Agreement. The Escrow Agent makes no representations as to the value, conditions or sufficiency of the Escrow Fund, or any part thereof, or as to the title of the Agency thereto, or as to the security afforded thereby or hereby, and the Escrow Agent shall not incur any liability or responsibility in respect to any of such matters. It is the intention of the parties hereto that the Escrow Agent shall never be required to use or advance its own funds or otherwise incur personal financial liability in the performance of any of its duties or the exercise of any of its rights and powers hereunder. The Escrow Agent shall not be liable for any action taken or neglected to be taken by it in good faith in any exercise of reasonable care and believed by it to be within the discretion or power conferred upon it by this Agreement, nor shall the Escrow Agent be responsible for the consequences of any error of judgment; and the Escrow Agent shall not be answerable except for its own action, neglect or default, nor for any loss unless the same shall have been through its negligence or willful misconduct. Unless it is specifically otherwise provided herein, the Escrow Agent has no duty to determine or inquire into the happening or occurrence of any event or contingency or the performance or failure of performance of the Agency with respect to arrangements or contracts with others, with the Escrow Agent's sole duty hereunder being to safeguard the Escrow Fund, to dispose of and deliver the same in accordance with this Agreement. If, however, the Escrow Agent is called upon by the terms of this Agreement to determine the occurrence of any event or contingency, the Escrow Agent shall be obligated, in making such determination, only to exercise reasonable care and diligence, and in event of error in making such determination the Escrow Agent shall be liable only for its own willful misconduct or its negligence. In determining the occurrence of any such event or contingency the Escrow Agent may request from the Agency or any other person such reasonable additional evidence as the Escrow Agent in its discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency, and in this connection may make inquiries of, and consult with, among others, the Agency at any time. Section 7.03. Compensation. (a) Concurrently with the deposit of the moneys to the Escrow Fund as provided herein, the Agency shall pay to the Escrow Agent, as a fee for performing the services hereunder and for all expenses incurred or to be incurred by the Escrow Agent in the administration of this Agreement, the amount set forth in Exhibit "G" attached hereto, the suffi- ciency ofwhich ishereby acknowledged by the Escrow Agent. In the event that the Escrow Agent is requested to perform any extraordinary services hereunder, the Agency hereby agrees to pay reasonable fees to the Escrow Agent for such extraordinary services and to reimburse the Escrow 8 Agent for all expenses incurred by the Escrow Agent in performing such extraordinary services, and the Escrow Agent hereby agrees to look only to the Agency for the payment of such fees and reimbursement of such expenses. The Escrow Agent hereby agrees that in no event shall it ever assert any claim or lien against the Escrow Fund for any fees for its services, whether regular or extraordinary, as Escrow Agent, or in any other capacity, or for reimbursement for any of its expenses. (b) The Agency covenants to timely pay for all future paying agency services of the Paying Agent for the Defeased Obligations in accordance with the paying agent fee schedule now in effect through the final payment of the Defeased Obligations, the sufficiency of which is hereby acknowledged by the Paying Agent. Additionally, the Paying Agent has agreed to look only to the Agency for the payment of such fees and reimbursement of such expenses, and for the benefit of the registered owners of the Defeased Obligations, to perform the services as Paying Agent without regard to the future payment of such fees and expenses. The Paying Agent has shall in no event assert any claim or lien against the Escrow Fund for any fees for its services, whether regular or extraordinary, as Paying Agent, or in any other capacity, or for reimbursement for any of its expenses. (C) TO THE EXTENT PERMITTED BY LAW, THE AGENCY AGREES TO INDEMNIFY THE ESCROW AGENT FOR, AND HOLD IT HARMLESS AGAINST, ANY LOSS, LIABILITY, OR EXPENSE INCURRED WITHOUT NEGLIGENCE OR BAD FAITH ON ITS PART, ARISING OUT OF OR IN CONNECTION WITH ITS ACCEPTANCE OR ADMINISTRATION OF ITS DUTIES HEREUNDER, INCLUDING THE COST AND EXPENSE AGAINST ANY CLAIM OR LIABILITY IN CONNECTION WITH THE EXERCISE OR PERFORMANCE OF ANY OF ITS POWERS OR DUTIES UNDER THIS AGREEMENT. Section 7.04. Notice of Redemption; Selection of Defeased Obli atg ions. (a) The Paying Agent is hereby authorized and directed to cause notice of defeasance and redemption of the Defeased Obligations to be given in the form attached hereto as Exhibit "I" promptly following the deposit of funds to the Escrow Fund as provided herein, but in all events at the time and in the form and manner prescribed in the proceedings that authorized the issuance of the Defeased Obligations (the "Defeased Obligation Resolutions"). (b) As provided in Exhibit "I"hereto, the redemption of the Defeased Obligations results in the partial defeasance of each maturity of the Defeased Obligations, and the Paying Agent shall designate at random and by lot which of the Defeased Obligations of each applicable maturity will remain payable and secured in accordance with the security provided in the Defeased Obligation Resolutions, and which of the Defeased Obligations of each applicable maturity shall be secured by the cash, if any, and Escrowed Securities. For purposes of such determination and designation, all Defeased Obligations registered in denominations greater than $5,000 shall be considered to be registered in separate $5,000 denominations. The Paying Agent shall notify by first-class mail all registered owners of all affected bonds of such maturities that: (i) a portion of such bonds have been defeased and are secured until final maturity solely with cash and investments maintained by the Escrow Agent in the Escrow Fund, (ii) the principal amount of all affected bonds of such maturities registered in the name of such registered owner that have been defeased and are payable solely from 9 cash and investments in the Escrow Fund and the remaining principal amount of all affected bonds of such maturities registered in the name of such registered owner, if any, have not been defeased and are payable and secured solely from the sources provided therefor in the in the Defeased Obligation Resolutions, (iii) the registered owner is required to submit his or her Defeased Obligations to the Paying Agent for the purposes of re-registering such registered owner's bonds and assigning new CUSIP numbers in order to distinguish the source of payment for the principal and interest on such bonds, and (iv) payment of principal of and interest on such bonds may, in some circumstances, be delayed until such bonds have been re-registered and new CUSIP numbers have been assigned as required by (iii) above. Section 7.05. Acknowledgment of Notice of Redemption. The Escrow Agent, by its execution hereof, as paying agent/registrar for the Defeased Obligations, acknowledges receipt of written notice of the redemption of the Defeased Obligations, as required by the proceedings that authorized the issuance of the Defeased Obligations, and agrees to provide or cause to be provided notice of defeasance and redemption of such Defeased Obligations as required by the proceedings that authorized the issuance of such Defeased Obligations. Section 7.06. Successor Escrow A e~nts. If at any time the Escrow Agent or its legal successor or successors should become unable, through operation or law or otherwise, to act as escrow agent hereunder, or if its property and affairs shall be taken under the control of any state or federal court or administrative body because of insolvency or bankruptcy or for any other reason, a vacancy shall forthwith exist in the office of Escrow Agent hereunder. In such event the Agency, by appropriate action, promptly shall appoint an Escrow Agent to fill such vacancy. If no successor Escrow Agent shall have been appointed by the Agency within 60 days, a successor may be appointed by the owners of a maj ority in principal amount of the Defeased Obligations then outstanding by an instrument or instruments in writing filed with the Agency, signed by such owners or by their duly authorized attorneys-in-fact. If, in a proper case, no appointment of a successor Escrow Agent shall be made pursuant to the foregoing provisions of this section within three months after a vacancy shall have occurred, the Escrow Agent or the owner of any Defeased Obligation may apply to any court of competent jurisdiction to appoint a successor Escrow Agent. Such court may thereupon, after such notice, if any, as it may deem proper, prescribe and appoint a successor Escrow Agent. Any successor Escrow Agent shall be: (i) a corporation, bank or banking association organized and doing business under the laws of the United States or the State of Texas; (ii) be authorized under such laws to exercise corporate trust powers; (iii) be authorized under Texas law to act as an escrow agent; (iv) have its principal office and place of business in the State of Texas; (v) have a combined capital and surplus of at least $5,000,000; and (vi) be subject to the supervision or examination by Federal or State authority. Any successor Escrow Agent shall execute, acknowledge and deliver to the Agency and the Escrow Agent an instrument accepting such appointment hereunder, and the Escrow Agent shall execute and deliver an instrument transferring to such successor Escrow Agent, subject to the terms of this Agreement, all the rights, powers and trusts of the Escrow Agent hereunder. Upon the to request of any such successor Escrow Agent, the Agency shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor Escrow Agent all such rights, powers and duties. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from the trust hereby created by giving not less than sixty (60) days' written notice to the Agency and publishing notice thereof, specifying the date when such resignation will take effect, in a newspaper printed in the English language and with general circulation in New York, New York, such publication to be made once at least three (3) weeks prior to the date when the resignation is to take effect. No such resignation shall take effect unless a successor Escrow Agent shall have been appointed by the owners of the Defeased Obligations or by the Agency as herein provided and shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent. Under any circumstances, the Escrow Agent shall pay over to its successor Escrow Agent proportional parts of the Escrow Agent's fee and, if applicable, its Paying Agent's fee hereunder. ARTICLE VIII MISCELLANEOUS Section 8.01. Notice. Any notice, authorization, request, or demand required or permitted to be given hereunder shall be in writing and shall be deemed to have been duly given when mailed by registered or certified mail, postage prepaid addressed to the Agency or the Escrow Agent at the address shown on Exhibit A attached hereto. The United States Post Office registered or certified mail receipt showing delivery of the aforesaid shall be conclusive evidence of the date and fact of delivery. Any party hereto may change the address to which notices are to be delivered by giving to the other parties not less than ten (10) days prior notice thereof. Section 8.02. Termination of Responsibilities. Upon the taking of all the actions as described herein by the Escrow Agent, the Escrow Agent shall have no further obligations or responsibilities hereunder to the Agency, the owners of the Defeased Obligations or to any other person or persons in connection with this Agreement. Section 8.03. Binding A reement. This Agreement shall be binding upon the Agency and the Escrow Agent and their respective successors and legal representatives, and shall inure solely to the benefit of the owners of the Defeased Obligations, the Agency, the Escrow Agent and their respective successors and legal representatives. Section 8.04. Severability. In case 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 of this Agreement, but this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. 11 Section 8.05. Texas Law Governs. This Agreement shall be governed exclusively by the provisions hereof and by the applicable laws of the State of Texas. Section 8.06. Time of the Essence. Time shall be of the essence in the performance of obligations from time to time imposed upon the Escrow Agent by this Agreement. Section 8.07. Effective date of A reement. This Agreement shall be effective upon receipt by the Escrow Agent of the funds described in Exhibit "D" attached hereto and the Escrowed Securities, together with the specific sums stated in subsections (a) and (b) of Section 7.03 for Escrow Agent and paying agency fees, expenses, and services. Section 8.08. Amendments. This Agreement shall not be amended except to cure any ambiguity or formal defect or omission in this Agreement. No amendment shall be effective unless the same shall be in writing and signed by the parties thereto. No such amendment shall adversely affect the rights of the holders of the Defeased Obligations. Section 8.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original for all purposes, and all counterparts shall together constitute one and the same instrument. (Execution Page Follows) 12 EXECUTED as of the date first written above. TEXAS MUNICIPAL POWER AGENCY General Manager U. S. BANK NATIONAL ASSOCIATION By: Title: INDEX TO EXHIBITS Exhibit "A" Addresses of the Agency and the Escrow Agent Exhibit "B" Description of the Defeased Obligations Exhibit "C" Schedule of Debt Service on Defeased Obligations Exhibit "D" Description of Beginning Cash Deposit (if any) and Escrowed Securities Exhibit "E" Escrow Fund Cash Flow Exhibit "F" Reinvestments in Zero Coupon SLGS Exhibit "G" Compensation of Escrow Agent Exhibit "H" Form of Paying Agent Sufficiency Certificate Exhibit "I" Form of Notice of Defeasance and Redemption for Defeased Obligations EXHIBIT "A" ADDRESSES OF THE AGENCY AND THE ESCROW AGENT ISSUER Texas Municipal Power Agency P.O. Box 7000 Bryan, Texas 77805 Attention: General Manager ESCROW AGENT U.S. Bank National Association Corporate Trust Services 14241 Dallas Parkway, Ste. 490 EX-TX-DCRE Dallas, Texas 75254 EXHIBIT "B" DESCRIPTION OF THE DEFEASED OBLIGATIONS Interest Principal Principal Issue Maturity Rate Amount Amount Call Date Outstanding Defeased TMPA Subordinate Lien Revenue Refunding Bonds, Series 2003 09/Ol/2011 3.750% $15,000,000 $12,775,000 5-6-2010 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2003 09/01/2012 4.125% 15,600,000 30,875,000 5-6-2010 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2003 09/01/2011 4.000% 36,250,000 13,285,000 5-6-2010 Subtotal $ 66,850,000 X56,935,000 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2004 09/Ol/2010 4.250% $ 34,985,000 $29,795,000 5-6-2010 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2004 09/Ol/2011 4.400% 41,185,000 35,075,000 5-6-2010 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2004 09/01/2013 4.625% 7,150,000 6,090,000 5-6-2010 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2004 09/01/2014 4.750% 7,485,000 6,375,000 5-6-2010 Subtotal $ 90,805,000 X77,335,000 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2004A 09/Ol/2010 3.500% $ 7,285,000 $ 6,205,000 5-6-2010 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2004A 09/01/2011 4.000% 7,545,000 6,425,000 5-6-2010 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2004A 09/01/2012 4.000% 36,625,000 31,195,000 5-6-2010 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2004A 09/01/2013 4.000% 10,000,000 9,045,000 5-6-2010 TMPA Subordinate Lien Revenue Refunding Bonds, Series 2004A 09/01/2012 3.625% 10,620,000 8,515,000 5-6-2010 Subtotal $ 72,075,000 X61,385,000 Total X229,730,000 X195,655,000 Those bonds shown in the table above as the Principal Amount Defeased, aggregating in principal amount $195,655,000, are, collectively, the "Defeased Obligations". EXHIBIT "C" SCHEDULE OF DEBT SERVICE ON DEFEASED OBLIGATIONS [To come.] EXHIBIT "D" DESCRIPTION OF BEGINNING CASH DEPOSIT AND ESCROWED SECURITIES On March 30, 2010, the Agency shall deposit or cause to be deposited with the Escrow Agent the aggregate sum of $ ,representing: (i) the $56,935,000 principal amount of the Agency's Subordinate Lien Revenue Refunding Bonds, Series 2003 that have been called for redemption on May 6, 2010, plus accrued but unpaid interest with respect to such bonds of $ , for a total of $ ; (ii) the $77,335,000 principal amount ofthe Agency's Subordinate LienRevenue Refunding Bonds, Series 2004 that have been called for redemption on May 6, 2010, plus accrued but unpaid interest with respect to such bonds of $ , for a total of $ ;and (iii) the $61,385,000 principal amount of the Agency's Subordinate Lien Revenue Refunding Bonds, Series 2004A that have been called for redemption on May 6, 2010, plus accrued but unpaid interest with respect to such bonds of $ , for a total of $ The sum of $ so deposited with the Escrow Agent shall be invested in a State and Local Series securities which matures on May 6, 2010, as shown on the attached SLGS subscription. The sum of shall be held uninvested as a cash deposit. The investment proceeds and cash deposit shall be applied to pay the redemption price of the Defeased Obligations on May 6, 2010. All excess amounts remaining in the Escrow Fund shall be remitted to the Agency following the payment of all amounts secured by this Escrow Agreement. The SLGS application is attached hereto. EXHIBIT "E" ESCROW FUND CASH FLOW [To come.] EXHIBIT "F" REINVESTMENTS IN ZERO COUPON SLGS None EXHIBIT "G" COMPENSATION OF ESCROW AGENT [To come.] EXHIBIT "H" FORM OF PAYING AGENT SUFFICIENCY CERTIFICATE ACKNOWLEDGMENT OF SUFFICIENCY OF FUNDS REGARDING TEXAS MUNICIPAL POWER AGENCY SUBORDINATE LIEN REVENUE REFUNDING BONDS, SERIES 2003 SUBORDINATE LIEN REVENUE REFUNDING BONDS, SERIES 2004 SUBORDINATE LIEN REVENUE REFUNDING BONDS, SERIES 2004A The undersigned, acting in his or her official capacity on behalf of U.S. Bank National Association (the "Bank") as Paying Agent/Registrar for the above referenced (i) Subordinate Lien Revenue Refunding Bonds, Series 2003 (the "Series 2003 Bonds"), (ii) Subordinate Lien Revenue Refunding Bonds, Series 2004 (the "Series 2004 Bonds") and (iii) Subordinate Lien Revenue Refunding Bonds, Series 2004A (the "Series 2004A Bonds") issued by the Texas Municipal Power Agency (the "Agency"), that: 1. The Bank has received notice from the Agency that the Agency will redeem on May 6, 2010 (the "Redemption Date"), $56,935,000 of the Series 2003 Bonds, $77,335,000 of the Series 2004 Bonds and $61,385,000 of the Series 2004A Bonds (collectively, the "Redeemed Bonds"). 2. U.S. BankNational Association, as such Paying Agent/Registrar, hereby acknowledges that the redemption price for (i) the Series 2003 Bonds shall be the principal amount thereof, $56,935,000, plus accrued but unpaid interest of $ , for a total of $ ; (ii) the Series 2004 Bonds shall be the principal amount thereof $77,335,000, plus accrued but unpaid interest of $ , for a total of $ ;and (iii) the Series 2004A Bonds shall be the principal amount thereof, $61,385,000, plus accrued but unpaid interest of $ for a total of $ ;for an aggregate total amount of $ for all Redeemed Bonds. 3. The Bank further acknowledges that it has entered into that certain escrow agreement dated as of 2010 by and between the Bank and the Agency (the "Escrow Agreement"), under which the Agency has committed to deposit or cause to be transferred to the Bank, acting in the capacity of escrow agent, the sum of $ for deposit into the escrow fund established by the Escrow Agreement. Such sum, without regard to the investment earnings thereon, is equal to the amount specified in paragraph 2 above as the aggregate redemption price for the Redeemed Bonds and will be sufficient to pay the redemption price of the Redeemed Bonds on the Redemption Date. DATED this , 2010 U.S. BANK NATIONAL ASSOCIATION By: Name Title EXHIBIT "I" FORM OF NOTICE OF DEFEASANCE AND REDEMPTION NOTICE OF DEFEASANCE AND REDEMPTION TEXAS MUNICIPAL POWER AGENCY NOTICE IS HEREBY GIVEN that the Texas Municipal Power Agency has called for redemption and defeased the outstanding and Bonds of the Agency aggregating $195,655,000 in principal amount described below (collectively, the "Redeemed Obligations"): Texas Municipal Power Agency Subordinate Lien Revenue Refunding Bonds, Series 2003, maturing in the dates and in the amounts shown below (the "Series 2003 Bonds"). Call date: May 6, 2010. Principal Principal Interest Amount Amount Maturity Rate Outstanding Defeased 09/Ol/2011 3.750% $15,000,000 $12,775,000 09/01/2012 4.125% 15,600,000 30,875,000 09/Ol/2011 4.000% 36,250,000 13,285,000 $56,935,000 On May 6, 2010, interest on the defeased Series 2003 Bonds shall cease to accrue and be payable. Texas Municipal Power Agency Subordinate Lien Revenue Refunding Bonds, Series 2004, maturing in the dates and in the amounts shown below (the "Series 2004 Bonds"). Call date: May 6, 2010. Principal Principal Interest Amount Amount Maturity Rate Outstanding Defeased 09/Ol/2010 4.250% $ 34,985,000 $29,795,000 09/Ol/2011 4.400% 41,185,000 35,075,000 09/01/2013 4.625% 7,150,000 6,090,000 09/01/2014 4.750% 7,485,000 6,375,000 $77,335,000 On May 6, 2010, interest on the defeased Series 2004 Bonds shall cease to accrue and be payable. Texas Municipal Power Agency Subordinate Lien Revenue Refunding Bonds, Series 2004A, maturing in the dates and in the amounts shown below (the "Series 2004A Bonds"). Call date: May 6, 2010. Principal Principal Interest Amount Amount Maturity Rate Outstanding Defeased 09/Ol/2010 3.500% $ 7,285,000 $ 6,205,000 09/Ol/2011 4.000% 7,545,000 6,425,000 09/01/2012 4.000% 36,625,000 31,195,000 09/01/2013 4.000% 10,000,000 9,045,000 09/01/2012 3.625% 10,620,000 8,515,000 $61,385,000 On May 6, 2010, interest on the defeased Series 2004A Bonds shall cease to accrue and be payable. THE REDEEMED OBLIGATIONS shall be redeemed in whole at U. S. Bank National Association, as the Paying Agent/Registrar for the Redeemed Obligations. Upon presentation of the Redeemed Obligations at the Paying Agent/Registrar on the aforementioned redemption date, the holder thereof shall be entitled to receive the redemption price equal to par and accrued interest to the redemption date. NOTICE IS GIVEN that due and proper arrangements have been made for providing the place of payment of the Redeemed Obligations called for redemption with funds sufficient to pay the principal amount of the Redeemed Obligations and the interest thereon to the redemption date. In the event the Redeemed Obligations, or any of them are not presented for redemption by the date fixed for their redemption, they shall not thereafter bear interest. UNDER THE PROVISIONS of Section 3406 of the Internal Revenue Code of 1986, as amended paying agents making payments of interest and principal on municipal securities may be obligated to withhold a tax from remittance to individuals who have failed to furnish the paying agent with a valid taxpayer identification number. Registered holders who wish to avoid the imposition of the tax should submit certified taxpayer identification numbers (via form W-9) when presenting the Redeemed Obligations for payment. THIS NOTICE is issued and given pursuant to the redemption provisions in the proceedings authorizing the issuance of the aforementioned Redeemed Obligations and in accordance with the recitals and provisions of the Redeemed Obligations. NOTICE IS FURTHER GIVEN that the Redeemed Obligations should be submitted to the following address: First Class/Registered/ Express Delivery Certified Mail Hand Delivery U.S. Bank National Association U.S. Bank National Association Corporate Trust Services Corporate Trust Services P. 0. Box 64111 60 Livingston Avenue St. Paul, MN 55164-0111 1st Floor -Bond Drop Window St. Paul, MN 55107 TEXAS MUNICIPAL POWER AGENCY PAYING AGENT/REGISTRAR AGREEMENT THIS AGREEMENT entered into as of , 2010 (this "Agreement"), by and between the City of Denton, Texas (the "Issuer"), and The Bank of New York Mellon Trust Company, National Association, a limited purpose national banking association with trust powers (the "Bank"). RECITALS WHEREAS, the Issuer has duly authorized and provided for the issuance of its Combination Tax and Revenue Refunding Bonds, Series 2010 (the "Securities") in the aggregate principal amount of $ such Securities to be issued in fully registered form only as to the payment of principal and interest thereon; and WHEREAS, the Securities are scheduled to be delivered to the initial purchaser thereof on or about , 2010; and WHEREAS, the Issuer has selected the Bank to serve as Paying Agent/Registrar in connection with the payment of the principal of, premium, if any, and interest on said Securities and with respect to the registration, transfer and exchange thereof by the registered owners thereof; and WHEREAS, the Bank has agreed to serve in such capacities for and on behalf of the Issuer and has full power and authority to perform and serve as Paying Agent/Registrar for the Securities; NOW, THEREFORE, it is mutually agreed as follows: ARTICLE ONE APPOINTMENT OF BANK AS PAYING AGENT AND REGISTRAR Section 1.01. Appointment. The Issuer hereby appoints the Bank to serve as Paying Agent with respect to the Securities. As Paying Agent for the Securities, the Bank shall be responsible for paying on behalf of the Issuer the principal, premium (if any), and interest on the Securities as the same become due and payable to the registered owners thereof, all in accordance with this Agreement and the "Ordinance" (hereinafter defined). The Issuer hereby appoints the Bank as Registrar with respect to the Securities. As Registrar for the Securities, the Bank shall keep and maintain for and on behalf of the Issuer books and records as to the ownership of said Securities and with respect to the transfer and exchange thereof as provided herein and in the "Ordinance." The Bank hereby accepts its appointment, and agrees to serve as the Paying Agent and Registrar for the Securities. Section 1.02. Compensation. As compensation for the Bank's services as Paying Agent/Registrar, the Issuer hereby agrees to pay the Bank the fees and amounts set forth in Schedule A attached hereto for the first year of this Agreement and thereafter the fees and amounts set forth in the Bank's current fee schedule then in effect 1 for services as Paying Agent/Registrar for municipalities, which shall be supplied to the Issuer on or before 90 days prior to the close of the Fiscal Year of the Issuer, and shall be effective upon the first day of the following Fiscal Year. In addition, the Issuer agrees to reimburse the Bank upon its request for all reasonable expenses, disbursements and advances incurred or made by the Bank in accordance with any of the provisions hereof (including the reasonable compensation and the expenses and disbursements of its agents and counsel). ARTICLE TWO DEFINITIONS Section 2.01. Definitions. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: "Acceleration Date" on any Security means the date on and after which the principal or any or all installments of interest, or both, are due and payable on any Security which has become accelerated pursuant to the terms of the Security. "Bank Office" means the principal corporate trust office of the Bank as indicated on the signature page hereof. The Bank will notify the Issuer in writing of any change in location of the Bank Office. "Fiscal Year" means the fiscal year of the Issuer, ending September 30. "Holder" and "Security Holder" each means the Person in whose name a Security is registered in the Security Register. "Issuer Request" and "Issuer Ordinance" means a written request or ordinance signed in the name of the Issuer by the Mayor of the Issuer delivered to the Bank. "Legal Holiday" means a day on which the Bank is required or authorized to be closed. "Ordinance" means the ordinance of the governing body of the Issuer pursuant to which the Securities are issued, certified by the City Secretary or any other officer of the Issuer and delivered to the Bank. "Person" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision of a government. "Predecessor Securities" of any particular Security means every previous Security evidencing all or a portion of the same obligation as that evidenced by such particular Security (and, for the purposes of this definition, any mutilated, lost, destroyed, or stolen Security for which a replacement Security has been registered and delivered in lieu thereof pursuant to Section 4.06 hereof and the Ordinance). "Redemption Date" when used with respect to any Bond to be redeemed means the date fixed for such redemption pursuant to the terms of the Ordinance. 2 "Responsible Officer" when used with respect to the Bank means the Chairman or Vice- Chairman of the Board of Directors, the Chairman or Vice-chairman of the Executive Committee of the Board of Directors, the President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer, or any other officer of the Bank customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Security Register" means a register maintained by the Bank on behalf of the Issuer providing for the registration and transfer of the Securities. "Stated Maturity" means the date specified in the Ordinance the principal of a Security is scheduled to be due and payable. Section 2.02. Other Definitions. The terms "Bank," Issuer," and Securities (Security)" have the meanings assigned to them in the recital paragraphs of this Agreement. The term "Paying Agent/Registrar" refers to the Bank in the performance of the duties and functions of this Agreement. ARTICLE THREE PAYING AGENT Section 3.01. Duties of Pang Agent. As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the principal of each Security at its Stated Maturity, Redemption Date, or Acceleration Date, to the Holder upon surrender of the Security to the Bank at the Bank Office. As Paying Agent, the Bank shall, provided adequate collected funds have been provided to it for such purpose by or on behalf of the Issuer, pay on behalf of the Issuer the interest on each Security when due, by computing the amount of interest to be paid each Holder and preparing and sending checks by United States Mail, first class postage prepaid, on each payment date, to the Holders of the Securities (or their Predecessor Securities) on the respective Record Date, to the address appearing on the Security Register or by such other method, acceptable to the Bank, requested in writing by the Holder at the Holder's risk and expense. Section 3.02. Payment Dates. The Issuer hereby instructs the Bank to pay the principal of and interest on the Securities on the dates specified in the Ordinance. 3 Section 3.03. Reporting Requirements. To the extent required by the Code or the Treasury Regulations, the Bank shall report to the Holders and the Internal Revenue Service the amount of interest paid or the amount treated as interest accrued on the Bond which is required to be reported by the Holders on their returns of federal income tax. ARTICLE FOUR REGISTRAR Section 4.01. Security Register -Transfers and Exchanges. The Bank agrees to keep and maintain for and on behalf of the Issuer at the Bank Office books and records (herein sometimes referred to as the "Security Register"), and, if the Bank Office is located outside the State of Texas, a copy of such books and records shall be kept in the State of Texas, for recording the names and addresses of the Holders of the Securities, the transfer, exchange and replacement of the Securities and the payment of the principal of and interest on the Securities to the Holders and containing such other information as may be reasonably required by the Issuer and subj ect to such reasonable regulations as the Issuer and the Bank may prescribe. All transfers, exchanges and replacement of Securities shall be noted in the Security Register. Every Security surrendered for transfer or exchange shall be duly endorsed or be accompanied by a written instrument of transfer, the signature on which has been guaranteed by an officer of a federal or state bank or a member of the National Association of Securities Dealers, in form satisfactory to the Bank, duly executed by the Holder thereof or his agent duly authorized in writing. The Bank may request any supporting documentation it feels necessary to effect a re-registration, transferor exchange of the Securities. To the extent possible and under reasonable circumstances, the Bank agrees that, in relation to an exchange or transfer of Securities, the exchange or transfer by the Holders thereof will be completed and new Securities delivered to the Holder or the assignee of the Holder in not more than three (3) business days after the receipt of the Securities to be cancelled in an exchange or transfer and the written instrument of transfer or request for exchange duly executed by the Holder, or his duly authorized agent, in form and manner satisfactory to the Paying Agent/Registrar. Section 4.02. Bonds. The Issuer shall provide an adequate inventory of printed Securities to facilitate transfers or exchanges thereof. The Bank covenants that the inventory of printed Securities will be kept in safekeeping pending their use, and reasonable care will be exercised by the Bank in maintaining such Securities in safekeeping, which shall be not less than the care maintained by the Bank for debt securities of other political subdivisions or corporations for which it serves as registrar, or that is maintained for its own securities. Section 4.03. Form of Securi Re ig'ster. The Bank, as Registrar, will maintain the Security Register relating to the registration, payment, transfer and exchange of the Securities in accordance with the Bank's general practices and procedures in effect from time to time. The Bank shall not be obligated to maintain such Security Register in any form other than those which the Bank has currently available and currently utilizes at the time. 4 The Security Register may be maintained in written form or in any other form capable of being converted into written form within a reasonable time. Section 4.04. List of Security Holders. The Bank will provide the Issuer at any time requested by the Issuer, upon payment of the required fee, a copy of the information contained in the Security Register. The Issuer may also inspect the information contained in the Security Register at any time the Bank is customarily open for business, provided that reasonable time is allowed the Bank to provide an up-to-date listing or to convert the information into written form. The Bank will not release or disclose the contents of the Security Register to any person other than to, or at the written request of, an authorized officer or employee of the Issuer, except upon receipt of a court order or as otherwise required by law. Upon receipt of a court order and prior to the release or disclosure of the contents of the Security Register, the Bank will notify the Issuer so that the Issuer may contest the court order or such release or disclosure of the contents of the Security Register. Section 4.05. Return of Cancelled Bonds. All bonds surrendered to the Bank, at the designated Payment/Transfer Office, for payment, redemption, transfer, or replacement, shall be promptly cancelled by the Bank. The Bank will provide to the Issuer, at reasonable intervals determined by the bank, a bond evidencing the destruction of canceled bonds. Section 4.06. Mutilated, Destroyed, Lost or Stolen Securities. The Issuer hereby instructs the Bank, subject to the applicable provisions of the Ordinance, to deliver and issue Securities in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities as long as the same does not result in an overissuance. In case any Security shall be mutilated, or destroyed, lost or stolen, the Bank, in its discretion, may execute and deliver a replacement Security of like form and tenor, and in the same denomination and bearing a number not contemporaneously outstanding, in exchange and substitution for such mutilated Security, or in lieu of and in substitution for such destroyed lost or stolen Security, only after (i) the filing by the Holder thereof with the Bank of evidence satisfactory to the Bank of the destruction, loss or theft of such Security, and of the authenticity of the ownership thereof and (ii) the furnishing to the Bank of indemnification in an amount satisfactory to hold the Issuer and the Bank harmless. All expenses and charges associated with such indemnity and with the preparation, execution and delivery of a replacement Security shall be borne by the Holder of the Security mutilated, or destroyed, lost or stolen. Section 4.07. Transaction Information to Issuer. The Bank will, within a reasonable time after receipt of written request from the Issuer, furnish the Issuer information as to the Securities it has paid pursuant to Section 3.01, Securities it has delivered upon the transfer or exchange of any Securities pursuant to Section 4.01, and Securities it has delivered in exchange for or in lieu of mutilated, destroyed, lost, or stolen Securities pursuant to Section 4.06. 5 ARTICLE FIVE THE BANK Section 5.01. Duties of Bank. The Bank undertakes to perform the duties set forth herein and agrees to use reasonable care in the performance thereof. Section 5.02. Reliance on Documents, Etc. (a) The Bank may conclusively rely, as to the truth of the statements and correctness of the opinions expressed therein, on bonds or opinions furnished to the Bank. (b) The Bank shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Bank was negligent in ascertaining the pertinent facts. (c) No provisions of this Agreement shall require the Bank to expend or risk its own funds or otherwise incur any financial liability for performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity satisfactory to it against such risks or liability is not assured to it. (d) The Bank may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. Without limiting the generality of the foregoing statement, the Bank need not examine the ownership of any Securities, but is protected in acting upon receipt of Securities containing an endorsement or instruction of transfer or power of transfer which appears on its face to be signed by the Holder or an agent of the Holder. The Bank shall not be bound to make any investigation into the facts or matters stated in a resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, note, security, or other paper or document supplied by Issuer. (e) The Bank may consult with counsel, and the written advice of such counsel or any opinion of counsel shall be full and complete authorization and protection with respect to any action taken, suffered, or omitted by it hereunder in good faith and in reliance thereon. (f) The Bank may exercise any of the powers hereunder and perform any duties hereunder either directly or by or through agents or attorneys of the Bank. Section 5.03. Recitals of Issuer. The recitals contained herein with respect to the Issuer and in the Securities shall be taken as the statements of the Issuer, and the Bank assumes no responsibility for their correctness. The Bank shall in no event be liable to the Issuer, any Holder or Holders of any Security, or any other Person for any amount due on any Security from its own funds. 6 Section 5.04. May Hold Securities. The Bank, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with the Issuer with the same rights it would have if it were not the Paying Agent/Registrar, or any other agent. Section 5.05. Mone s Held by Bank. The Bank shall deposit any moneys received from the Issuer into a segregated account to be held by the Bank solely for the benefit of the owners of the Securities to be used solely for the payment of the Securities, with such moneys in the account that exceed the deposit insurance available to the Issuer by the Federal Deposit Insurance Corporation, to be fully collateralized with securities or obligations that are eligible under the laws of the State of Texas and to the extent permitted by the laws of the United States of America to secure and be pledged as collateral for such accounts until the principal and interest on such securities have been presented for payment and paid to the owner thereof. Payments made from such account shall be made by check drawn on such account unless the owner of such Securities shall, at its own expense and risk, request such other medium of payment. Subject to the Unclaimed Property Law of the State of Texas, any money deposited with the Bank for the payment of the principal, premium (if any), or interest on any Security and remaining unclaimed for three years after the final maturity of the Security has become due and payable will be paid by the Bank to the Issuer if the Issuer so elects, and the Holder of such Security shall hereafter look only to the Issuer for payment thereof, and all liability of the Bank with respect to such monies shall thereupon cease. If the Issuer does not elect, the Bank is directed to report and dispose of the funds in compliance with Title Six of the Texas Property Code, as amended. Section 5.06. Indemnification. To the extent permitted by law, the Issuer agrees to indemnify the Bank for, and hold it harmless against, any loss, liability, or expense incurred without negligence or bad faith on its part, arising out of or in connection with its acceptance or administration of its duties hereunder, including the cost and expense against any claim or liability in connection with the exercise or performance of any of its powers or duties under this Agreement. Section 5.07. Interpleader. The Issuer and the Bank agree that the Bank may seek adjudication of any adverse claim, demand, or controversy over its person as well as funds on deposit, in either a Federal or State District Court located in the State and County where the administrative offices of the Issuer is located, and agree that service of process by certified or registered mail, return receipt requested, to the address referred to in Section 6.03 of this Agreement shall constitute adequate service. The Issuer and the Bank further agree that the Bank has the right to file a Bill of Interpleader in any court of competent jurisdiction within the State of Texas to determine the rights of any Person claiming any interest herein. Section 5.08. Depository Trust Company Services. It is hereby represented and warranted that, in the event the Securities are otherwise qualified and accepted for "Depository Trust Company" services or equivalent depository trust services by other organizations, the Bank has the capability and, to the extent within its control, will comply with the "Operational Arrangements," effective August 1,1987, which establishes requirements for securities to be eligible for such type depository trust services, including, but not limited to, requirements for the timeliness of payments and funds availability, transfer turnaround time, and notification of redemptions 7 and calls. ARTICLE SIX MISCELLANEOUS PROVISIONS Section 6.01. Amendment. This Agreement may be amended only by an agreement in writing signed by both of the parties hereto. Section 6.02. Assi n.~ ment. This Agreement may not be assigned by either party without the prior written consent of the other. Section 6.03. Notices. Any request, demand, authorization, direction, notice, consent, waiver, or other document provided or permitted hereby to be given or furnished to the Issuer or the Bank shall be mailed or delivered to the Issuer or the Bank, respectively, at the addresses shown on the signature page of this Agreement. Section 6.04. Effect of Headings. The Article and Section headings herein are for convenience only and shall not affect the construction hereof. Section 6.05. Successors and Assigns. All covenants and agreements herein by the Issuer shall bind its successors and assigns, whether so expressed or not. Section 6.06. Severabili . In case any provision herein shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 6.07. Benefits of A reg ement. Nothing herein, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy, or claim hereunder. Section 6.08. Entire A reg ement. This Agreement and the Ordinance constitute the entire agreement between the parties hereto relative to the Bank acting as Paying AgentlRegistrar and if any conflict exists between his Agreement and the Ordinance, the Ordinance shall govern. 8 Section 6.09. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which shall constitute one and the same Agreement. Section 6.10. Termination. This Agreement will terminate (i) on the date of final payment of the principal of and interest on the Securities to the Holders thereof or (ii) may be earlier terminated by either party upon sixty (60) days written notice; provided, however, an early termination of this Agreement by either party shall not be effective until (a) a successor Paying Agent/Registrar has been appointed by the Issuer and such appointment accepted and (b) notice has been given to the Holders of the Securities of the appointment of a successor Paying Agent/Registrar. Furthermore, the Bank and Issuer mutually agree that the effective date of an early termination of this Agreement shall not occur at any time which would disrupt, delay or otherwise adversely affect the payment of the Securities. Upon an early termination of this Agreement, the Bank agrees to promptly transfer and deliver the Security Register (or a copy thereo fl, together with other pertinent books and records relating to the Securities, to the successor Paying Agent/Registrar designated and appointed by the Issuer. The provisions of Section 1.02 and of Article Five shall survive and remain in full force and effect following the termination of this Agreement. Section 6.11. Governing. This Agreement shall be construed in accordance with and governed by the laws of the State of Texas. [Remainder of page intentionally left blank] 9 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. THE BANK OF NEW YORK MELLON TRUST COMPANY, NATIONAL ASSOCIATION By Title 2001 Bryan Street,10th Floor Dallas, Texas 75201 CITY OF DENTON, TEXAS By Mayor 215 E. McKinney Denton, Texas 76201 10 SCHEDULE A Paying Agent/Registrar Fee Schedule 11 This page left blank intentionally. AGENDA INFORMATION SHEET AGENDA DATE: February 16, 2010 DEPARTMENT: City Manager's Office CM: George Campbell, City Manager SUBJECT Consider nominations/appointments to the City's Boards and Commissions. BACKGROUND The following boards/commissions require nominations: Construction Advisory & Appeals Board -Daniel Hurt has moved outside the city limits. A nomination is required from Council Member Heggins. Human Services Advisory Committee -Mayor Burroughs has a nomination for the vacant position held by Angie Jester. If you require any further information, please let me know. Respectfully submitted: Jennifer Walters City Secretary S:1City SecretarvlBoards & CommlA~enda Info Sheet for Vacancies 2-16-10.doc .j j 4-~,