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.
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2. Considered an appointment to the Parks and
~ R~cr~ation Board.
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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.
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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.
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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.
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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.
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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.
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CITY ~DENTON, TEXAS
ClT~SECRET~RY, CITY OF DENTON, TEXAS
2966C
205