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Minutes August 16, 1988CITY OF DENTON CITY COUNCIL MINUTES August 16, 1988 The Council convened into the Work Session at 5:30 p.m. in the civil Defense Room. PRES ENT: Mayor Pro Tem Hopkins; Council Members Ayer, Boyd, Gorton and McAdams. ABSENT: Mayor Stephens - attending a TMPA Board of Directors Meeting and Council Member Alexander. 1. The Council held a discussion of ad valorem taxes nd budget issues for the 1988-89 budget. Lloyd Harrell, City Manager, stated that the Council needed to decide on the debt levy for the next fiscal year. He presented background information about the determination of the tax rate and effect on the proposed budget. Staff was predicting a shortfall based on the drop in assessed value. Harrell presented three options for the Council to consider: (1) Keep the debt payment at 24.46¢. With this rate there would be a gap and it would be necessary to increase the total tax levy to 62.03¢, a 5.6% increase over the effective tax rate. (2) Keep the debt payment rate at 23.17¢ which would produce a gap of $275,000 which could be made up by increasing the tax rate to 60.78~ or a 3.54% increase over the effective rate or find the difference in the budget process. The advantages of the two above options were that the City could meet the current debt payments without drawing on the reserves and even if the rate were raised to 62.03~, it was still far below the roll back rate of 66.06¢. (3) The third option, which staff was recommending, would reduce the debt levy at 21.65¢ and a final proposed budget with a 59.28~ levy and 1% effective tax increase which would balance the budget and/or fund additional programs (allowed an increase in the tax rate and still be below the rollback level. Considerations included: (1) a 7 year projection indicated that the rate could be held at 21.65~ and meet authorized and ' planned debt. Certain assumptions had been made regarding growth and interest. (2) A change in the Highway Department's procedure regarding curb/gutter and drainage would permit the City to not issue up to ~6 million in bonds. Advantages of Option ~3 were that it would hold the tax levy at 59.28~ and still fund the proposed budget with a 1% increase. City of Denton City Council Minutes August 16, 1988 Page 2 There would still be a good balance in the debt service fund and it could be adjusted if the projections were overly optimistic. It would be a good year for a minimal tax increase due to the other entities having a greater increase. A decision was needed from the Council to levy the debt service at 23.17¢, 21.65~ (staff recommendation) or 24.46~. Council held a discussion regarding the pros and cons of each option and the consensus was to set the rate at 21.65~. Utility budget presentation for fiscal year 1988-89. Bob Nelson, Executive Director of Utilities, presented the major utility issues for the next fiscal year. He stated that the 1989 budget would show a ~102,000 net income, no electrical rate increase, a 8 1/2% water rate increase, no sewer rate increase and a request for 13 new full-time positions, 2 part-time positions and 1 seasonal position. Nelson presented anticipated bond sales for upcoming years. He stated the justifications for the added utility personnel included meeting regulated mandates, staffing new facilities, staffing new programs and additional customer base. He stated that the Public Utilities Board had asked for special consideration for money for a 10 year management study. Executive Session The Council convened into the Executive Session to discuss the following: A. Legal Matters -- Under Sec. 2(e), Art. 6252-17 V.A.T.S. Maverick vs. City, County of Denton vs. City of Denton. B. Real Estate -- Under Sec. 2(f), Art. 6252-17 V.A.T.S. Personnel/Board Appointments -- Under Sec. 2(g), Art 6252-17 V.A.T.S. Considered nominations for a Denton representative to the National Organization on Disability. 195 2. Considered an appointment to the Parks and ~ R~cr~ation Board. 196 City of Denton City Council Minutes August 16, 1988 Page 3 The Council then convened into the Regular Session at 7:00 p.m. in the Council Chambers. PRES ENT: Mayor Pro Tem Hopkins; Council Members Ayer, Boyd, Gorton and McAdams. ABSENT: Mayor Stephens - attending a TMPA Board of Directors Meeting and Council Member Alexander. 1. The Council considered approval of a request from the Camp Fire Association to hang a banner at Locust Street and McKinney Street from August 29 - September 16 announcing their annual membership drive. Shirley Hensley, Director - Camp Fire - Denton County, requested approval for the banner announcing their annual membership drive. McAdams motion, Ayer second to approve the request. carried unanimously. Motion Public Hearings Council considered a petition of Dale 'Irwin requesting a change in zoning from the multi-family (MF-2) to the general retail (GR) zoning district at 1507 Eagle Drive. The property was located at the southeast corner of Eagle Drive and Collier Street and more fully described as being in the E. Puchalski Survey, Abstract No. 996. If approved, the property may be utilized for any uses allowed in the general retail zoning classification. Z-88-009. (The Planning and Zoning Commission recommended approval.) The Mayor Pro Tem opened the public hearing. Dale Irwin spoke in favor of the petition. He stated that he wanted to purchase the property and renovate the building for a retail establishment, probably a restaurant. The property was now vacant and was the site of a former Taco Inn. The previous ' zoning was under a specific-use permit which was no longer valid after the restaurant was out of business for 6 months. The area was predominetly retail in nature and he needed the zoning before he could start renovation. Tom King spoke in opposition. He stated that he had tried to get property rezoned on University Drive from (MY) and was denied. If the change in zoning was to continue, he wanted to be considered also for a change in zoning. City of Denton City Council Minutes August 16, 1988 Page 4 The Mayor Pro Tem closed the public hearing. Frank Robbins, Executive Director for Planning, stated that the zoning district being requested to (GR) would allow uses of the property as the property had been used in the past. General Retail would also allow other kinds of retail uses. The Planning and Zoning Commission found that the proposed rezoning to be in accordance with the Denton Development Guide and recommended the rezoning. The following ordinance was considered: NO. 88-135 197 AN ORDINANCE AMENDING THE ZONING MAP OF THE CITY OF DENTON, TEXAS, AS SAME WAS ADOPTED AS AN APPENDIX TO THE CODE OF ORDINANCES OF THE CITY OF DENTON, TEXAS, BY ORDINANCE NO. 69-1, AS AMENDED, AND AS SAID MAP APPLIES TO 1507 EAGLE DRIVE, AS IS MORE PARTICULARLY DESCRIBED HEREIN; TO PROVIDE FOR A CHANGE IN ZONING CLASSIFICATION FROM MULTI-FAMILY "MF-2" DISTRICT CLASSIFICATION AND USE DESIGNA- TION, TO GENERAL RETAIL "GR" DISTRICT CLASSIFICATION AND USE DESIGNATION; PROVIDING FOR A PENALTY IN A MAXIMUM AMOUNT OF ~2,000.00 FOR VIOLATIONS THEREOF; AND PROVIDING FOR AN EFFECTIVE DATE. McAdams motion, Gorton second to adopt the ordinance. On roll vote, McAdams "aye," Gorton "aye," Ayer "aye," Boyd "nay," and Mayor Pro Tem Hopkins "aye." Motion carried with a 4-1 vote. B. The Council considered a proposed annexation of 20.8309 acres being part of the J. Dickson Survey, Abstract No. 342, and the A. Cannon Survey, Abstract No. 232, and located at FM 2181 and Old Alton Road. (A-56) The Mayor Pro Tem opened the public hearing. No one spoke in favor. R. D. Martin, property owner of the proposed annexation, spoke~ in opposition. He stated that he was at the previous public hearing. He questioned why the City was passing up other mobile home parks and just annexihg his property. He was not selling lots nor dedicating streets. He stated that the extra tax and restrictions associated with annexation would place a burden on him and would not allow him to continue with the development of his mobile home park. He again questioned why other mobile home parks were not annexed along the way and just his property. 198 City of Denton City Council Minutes August 16, 1988 Page 5 Mayor Stephens joined the meeting. The Mayor Pro Tem closed the public hearing. Frank Robbings, Executive Director for Planning, stated that staff had no new material to present to Council. Consensus was to continue with the annexation process. e Consent Agenda McAdams motion, Gorton second to approve the consent agenda as presented. Motion carried unanimously. Consent Agenda A. Bids and Purchase Orders: 1. Bid ~9883 - Lease/Purchase Refuse Equipment 4. Ordinances A. The Council considered adoption of an ordinance accepting competitive bids and providing for the award of contracts for the purchase of materials, equipment, supplies or services. The following ordinance was considered: NO. 88-136 AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR THE PURCHASE OF MATERIALS, EQUIPMENT, SUPPLIES OR SERVICES; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING FOR AN EFFECTIVE DATE. McAdams motion, Gorton second to adopt the ordinance. On roll vote, McAdams "aye," Hopkins "aye," Gorton "ayew" Ayer "aye," Boyd "aye," and Mayor Stephens "aye." Motion carried unanimously. B. The Council considered adoption of an ordinance' approving an agreement between the City of Denton, Strata Properties, Inc. and Dan C. Coffey and Jeff Robb, Attorneys-at-Law, authorizing said attorneys to act on behalf of the City of Denton to institute and complete condemnation proceedings to acquire a drainage easement. City of Denton City Council Minutes August 16, 1988 Page 6 Rick Svehla, Deputy City Manager, stated that this ordinance would allow Strata Properties, Inc. to provide an easement for drainage for a development that they were proposing. They had been unsuccessful in dealing with the owner of the property. The agreement would allow the listed attorneys to act on behalf of the City in seeking condemnation of the property to obtain the easement. The following ordinance was considered: NO. 88-137 AN ORDINANCE APPROVING AN AGREEMENT BETWEEN THE CITY OF DENTON, STRATA PROPERTIES, INC., AND DAN C. COFFEY AND JEFF ROBB, ATTORNEYS AT LAW, AUTHORIZING SAID ATTORNEYS TO ACT ON BEHALF OF THE CITY OF DENTON TO INSTITUTE AND COMPLETE CONDEMNATION PROCEEDINGS TO ACQUIRE A DRAINAGE EASEMENT, AS MORE PARTICULARLY DESCRIBED HEREIN; PROVIDING FOR THE PAYMENT OF COST OF CONDEMNATION BY STRATA PROPERTIES, INC.; AND PROVIDING FOR AN EFFECTIVE DATE. McAdams motion, Ayer second to adopt the ordinance. On roll vote, McAdams "aye," Hopkins "aye," Gorton "aye," Ayer "aye," Boyd "aye,~ and Mayor Stephens "aye.~ Motion carried unanimously. C. The Council considered adoption of an ordinance granting a franchise to Acme Brick Company for the purpose of maintaining and operating a natural gas pipeline within the public right-of-way of the City of Denton, Texas; providing for a franchise fee; and providing for the regulation of the construction, reconstruction, maintenance, and use thereof. Rick Svehla, Deputy City Manager, stated that Acme had had an agreement with the City for a number of years. There was only one street crossing. A more formal arrangement was being sought in the form of a franchise agreement. The following ordinance was considered: NO. 88- -- 199 AN ORDINANCE GRANTING A FRANCHISE TO ACME BRICK COMPANY FOR THE PURPOSE OF MAINTAINING AND OPERATING A NATURAL GAS PIPELINE WITHIN THE PUBLIC RIGHT-OF-WAY OF THE CITY OF DENTON, TEXAS; PROVIDING FOR A FRANCHISE FEE; PROVIDING FOR THE REGULATION OF THE CONSTRUCTION, RECONSTRUCTION, MAINTENANCE, AND USE T~EREOF; PROVIDING FOR A SEVERABILITY CLAUSE; AND PROVIDING FOR AN EFFECTIVE DATE. 2OO City of Denton City Council Minutes August 16, 1988 Page 7 McAdams motion, Hopkins second to adopt the ordinance. On roll vote, McAdams "aye," Hopkins "aye," Gorton "aye," Ayer "aye," Boyd "aye," and Mayor Stephens "aye." Motion carried unanimously. 5. The Council considered approval of a resolution authorizing the acquisition of a stormwater drainage easement. The following resolution was considered: RESOLUTION NO. R88-049 A RESOLUTION AUTHORIZING THE ACQUISITION OF A STORMWATER DRAINAGE EASEMENT; AND PROVIDING FOR AN EFFECTIVE DATE. McAdams motion, Gorton second to approve the resolution. On roll vote, McAdams "aye," Hopkins "aye," Gorton "aye," Ayer "aye," Boyd "aye," and Mayor Stephens "aye." Motion carried unanimously. B. The Council considered approval approval of a resolution appointing Roland Vela to the Board of Directors of the Texas Municipal Power Agency. The following resolution was considered: RESOLUTION NO. R88-050 A RESOLUTION APPOINTING ROLAND VELA TO THE BOARD OF DIRECTORS OF THE TEXAS MUNICIPAL POWER AGENCY AND DECLARING AN EFFECTIVE DATE. McAdams motion, Gorton second to approve the resolution. On roll vote, McAdams "aye," Hopkins "aye," Gorton "aye," Ayer "aye," Boyd "aye," and Mayor Stephens "aye." Motion carried unanimously. C. The Council considered approval of a resolution approving the raised median design and related traffic control measures of Teasley Lane. The following resolution was considered: RESOLUTION NO. R88-051 A RESOLUTION RECOMMENDING THAT RAISED MEDIANS BE CONSTRUCTED DURING THE WIDENING OF A PORTION OF TEASLEY LANE (F.M. 2181); AND PROVIDING FOR AN EFFECTIVE DATE. City of Denton City Council Minutes August 16, 1988 Page 8 Ayer motion, Hopkins second to approve the resolution. On roll vote, McAdams "aye," Hopkins "aye," Gorton "aye," Ayer "aye," Boyd "aye," and Mayor Stephens "aye." Motion carried unanimously. D. The Council considered approval of a resolution appointing Bill Utter as the City of Denton representative to the Regional Transportation Council of the North Central Texas Council of Governments. The following resolution was considered: RESOLUTION NO. R88-052 A RESOLUTION APPOINTING BILL UTTER AS THE OFFICIAL VOTING REPRESENTATIVE TO THE REGIONAL TRANSPORTATION COUNCIL OF THE NORTH CENTRAL TEXAS COUNCIL OF GOVERNMENTS; AND PROVIDING FOR AN EFFECTIVE DATE. Hopkins motion, Gorton second to approve the resolution. On roll vote, McAdams "aye," Hopkins "aye," Gorton "aye," Ayer "aye," Boyd "aye," and Mayor Stephens "aye." Motion carried unanimously. E. The Council considered approval of a resolution authorizing the Mayor to execute a security agreement on behalf of MBank relating to the lease between the City and First Financial Resources, Inc. (The Airport Advisory Board recommends approval.) Council allowed representatives from MBank to speak to the matter. Tom Jester, attorney for MBank, stated that First Financial Resources entered into a lease agreement with the City of Denton to lease certain property at the Municipal Airport. It was necessary to make certain improvements on the property and MBank was willing to loan them 4100,000 to make the improvements. Normally, a deed of trust would be sought to secure the bank's interest in the improvements on the real estate. First Financial did not own the real estate and only had a lease agreement. MBank was requesting a collateral transfer of the lease. First Financial transferred their' interest in the lease to MBank to secure the loan. The bank needed the acknowledgement of the City on the collateral transfer. In the event First Financial defaulted on the loan, MBank could operate the lease or sublease the property. 201 Council Member Ayer asked why MBank did not request for this type of security at the time the loan was made. 2 0"2 City of Denton City Council Minutes August 16, 1988 Page 9 Jester replied that that had been done but that it was this long getting to this point. Ayer asked the City Attorney if there was anything that was or could be potentially harmful to the interest to the City. Debra Drayovitch, City Attorney, stated that this was more of a business decision rather than a legal decision. About half of the area cities were doing this type of agreement. The lease allowed the Bank to operate whatever was done with the loan money, not the whole lease. MBank was requesting permission to operate the whole lease if First Financial defaulted. Council Member McAdams was concerned about past instances. If there was a default on the loan, the Bank could take over the entire lease and could sub-lease to someone else under circumstances that the City may not want. Jester stated that this was just good business procedure and that MBank was acting in good faith, thinking that there would be no problem with the agreement. He felt that MBank would not be willing to make any future loans to anyone at the Airport or anything to do with the City if agreements of this type were not approved. Robin Cane, Executive Vice-President of MBank, stated that the loan was made to First Financial approximately 10 months ago. He felt that MBank would have zero interest in additional loans for improvements at the Airport within the terms of the lease as it currently existed. Benefits for the City would be additional growth for the City. Rick Svehla, Deputy City Manager, stated that he had attended the last Airport Board meeting and that the Board felt that although the improvements had been made, specifically to the hanger, the rest of the lease entailed the taxiway to get to the hanger and parking spaces next to the hanger and the right to use the access. The Board understood that there was a difference between the improvements made to the hanger itself and that the lease encompassed more than that. The Board still felt that it was worth recommending to the Council. The nature of the lease was different from others that the City had. There were no services involved with this lease. If First. Financial defaulted, the Bank would take over the lease only if it paid the rent and if the Bank did not pay the rent, the lease would default back to the City. Council Member McAdams asked if there had been any discussion regarding the fact that the note for the loan did not specify what it was for. City of Denton City Council Minutes August 16, 1988 Page 10 Svehla replied that the Board did understand that it was not known what the exact improvements were. Council Member Boyd stated that a previous lease was more involved than this lease. This was different because the lease payments were protected with way. No service issues were involved as this was not a public hanger. Svehla replied that was correct, it was a private hanger, no services to the public. Mayor Pro Tem Hopkins stated that she felt that this lease was clearly different from other leases. While the Council needed to protect the City's interests, economic development was also important and did not want to sent a signal to the banks in Denton that the Council did not want any future development at the Airport or other City property. If this type of normal agreement were withheld, the Council would not be sending out a very good signal to the business community. The following resolution was considered: NO. R88-053 A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE A SECURITY AGREEMENT ON BEHALF OF MBANK RELATING TO THE LEASE BETWEEN THE CITY AND FIRST FINANCIAL RESOURCES, INC.; AND PROVIDING FOR AN EFFECTIVE DATE. Hopkins motion, Boyd second to approve the resolution. vote, McAdams "aye," Hopkins "aye," Gorton "aye," Ayer Boyd "aye," and Mayor Stephens "aye." Motion unanimously. On roll "aye," carried 6. The Council considered the appointment of the Denton Central Appraisal District Chief Appraiser as the representative for the City of Denton to calculate and publish the City's effective and rollback tax rates. John McGrane, Executive Director of Finance, stated that in the past in order to have a certified tax assessor/collector calculate and publish the effective rate and rollback rate, the City had gone into an agreement with the Central Appraisal District and had the Chief Appraisor do that. This item would grant approval to go into another agreement. 203 Ayer motion, Gorton second to approve the appointment. Motion carried unanimously. 2O4 City of Denton City Council Minutes August 16, 1988 Page 11 7. The Council considered approval of the certified collection rate for the City of Denton for the 1987-88 fiscal year and the anticipated 1988-89 fiscal year as 100% respectively. John McGrane, Executive Director .of Finance, stated that this was a housekeeping measure as required by State law. Under the calculation of the effective tax rate, the City had to certify to Council what was anticipated as the collection rate of the ad valorem tax. The certification would be at 100% because if it was certified as less and more was collected, the City would be adversely affected. By the end of the fiscal year, the rate would probably be 97%. McAdams motion, Gorton second to approve the collection rate. Motion carried unanimously. certified 8. The Council considered acceptance of the certified appraisal roll from the Denton Central Appraisal District for the 1988-89 budget year showing total appraisal, assessed, and taxable values of all property and the total taxable value of new property. John McGrane, Executive Director of Finance, stated that State law required that the roll from the Appraisal District be submitted to the City Council. McAdams motion, Gorton second to accept the certified appraisal roll. Motion carried unanimously. Miscellaneous matters from the City Manager. ae Submission of the effective tax rate and rollback for publication. John McGrane, Executive Director of Finance, stated that State law required submission to Council the effective tax rate and the rollback rate which were required to be published. McGrane submitted the effective tax rate of ~.5870, using the debt rate of ~.2165, the maximum rollback rate would be 63.18¢/$100 evaluation. B. Harrell stated that those who were interested in attending the TML Region VIII meeting in White Settlement needed to contact the City Secretary. 10. The following formal action was taken from the previous Executive Session: City of Denton City Council Minutes August 16, 1988 Page 12 ae Gorton motion, Ayer second to appoint Roy Appleton III to the Parks and Recreation Board. Motion carried unanimously. McAdams motion, Boyd second to appoint Dr. Anne Gudmundsen as City of Denton Liaison to the National Organization on Disability. Motion carried unanimously. 11. New Business The following items of New Business were suggested by Council Members for future agendas: A. Council Member McAdams suggested taking a closer look at the Airport and suggested obtaining greater expertise from someone who knew how to run an airport - perhaps a consultant to study the effectiveness of the Airport. She also wanted to know where the City stood in regards financially to the bonds that were sold for the Airport. B. Council Member Boyd suggested a possible study session which would present a range of alternatives regarding the Airport. C. Council Member Gorton requested an update On the City's insurance program and the security agreement with Flow Regional Medical Center. Mayor Stephens reported on the special call meeting of the TMPA Board. A resolution had been approved which established guidelines for the investment of proceeds from the settlement of litigation between the Agency and TU Electric concerning the Comanche Peak Steam Electric Station. The General Manager of the Agency was now required to report quarterly to the Board on the source and use of available funds and the impact of this settlement program on the Agency's debt structure and annual debt service. 12. The Council did not meet following the regular meeting. in Executive Session With no further business, the meeting was adjourned at 8:25 p.m. R CITY ~DENTON, TEXAS ClT~SECRET~RY, CITY OF DENTON, TEXAS 2966C 205