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Minutes January 10, 199034.2 CITY OF DENTON CITY COUNCIL MINUTES JANUARY 10, 1990 The Council convened at 12:00 noon in a ]oint session with the Denton Independent School District Board of Trustee~ at the Administration Building, 1307 N. Locust, Denton, Texas.. PRESENT: ABSENT: Mayor Stephens: Council Members Boyd, Gorton, Hopkins and McAdams. Mayor Pro Tem Ayer; Council Member Alexander 1. The Council held a discussion regarding tax abatement and other issues relative to the City of Denton and the Denton Independent School District. Bettye Myers, DISD Board President, indicated that present at the meeting were members of the School Board, Denton City Council, Denton Chamber of commerce, County Commissioner Hill, Judge Vic Burgess, DISD staff and City staff. She presented Lloyd Harrell, City Manager, who would chair the meeting. Lloyd Harrell, City Manager, presented an overview of the proposed program. He introduced the other members of the Committee. He stated that philosophically, the members of the Committee were against the principles of tax abatement as it discriminated against certain entities. However, if Denton were to remain in a competitive position, some type of tax abatement policy was needed. He stated that the City, the DISD and Denton County would consider a tax abatement on a case-by-case basis for new, expanding and modernizing basic industries, corporate office headquarters and distribution centers. Retail and warehouse facilities would not qualify. A Joint Committee on Tax Abatement would be established with two elected officials from each of the taxing entities involved as members along with one additional staff person from each jurisdiction to serve as a non-voting, ex-officio member. The Joint Committee on Tax Abatement would serve as a recommending body to the taxing entities regarding whether economic development incentives should be offered in each individual case. The recommendation would be based on an evaluation of approximately thirty three questions. Once a determination had been made that a tax abatement should be offered, the value and term of the abatement would be determined by a specific formula. A bonus would be extended to existing industries in which the actual value of the structure would be multiplied by 125% prior to utilizing the Formula Table which would provide approximately one additional year for abatement. Tax increment financing would be utilized for financing for infrastructure improvements such as streets and utilities. That would be more generous than the 125% for that kind of development. Procedural guidelines would track the State guidelines, the agreement would be a formal agreement between the taxing entity and the business and the proposal provided for an annual review process. Formal adoption needed to be done by both the City and the DISD. City of Denton City Council Minutes January 10, 1990 Page 2 Willie Hudspeth, DISD School Trustee, stated that the recommendation from the Tax Abatement Committee would: be just that, a recommendation. The taxing entities did not.have any obligation to follow that recommendation. City Manager Harrell replied that that was correct. Council Member Gorton stated that the review pan'el should review the request all at once and make a joint recommendation to all of the taxing entities at the same time so as to not divide the members of the panel. Council Member McAdams expressed concern on where the money would be made up when an abatement were given. Bill Holt, Denton Chamber of Commerce, replied that the policy would receive 75% of something versus 100% of nothing. He was concerned that Denton would develop into a "dormitory" to the I35 corridor with people living here in Denton but working elsewhere. Bill'Giese, DISD School Trustee, stated that before a benefit were received, the assumption had to be made that the entity would be profitable in the City. Revenues were not the-only criteria, expenditures also needed to be looked at. Mayor Stephens left the meeting. Gilbert Bernstein, Assistant Superintendent for Business Affairs, stated that the long term goal needed to be looked at. In the short term, the program might cost money, but in the long term, it would pay out. Discussion continued regarding the flexibility of the program, competition coming not only from the Metroplex but from other areas as well, and whether some of the questions were too subjective. Council Member Hopkins stated that the City was already giving some forms of tax abatement with the Homestead Exemption, the Over 65 Exemption and the Historic Exemption. Council Member Alexander joined the meeting. Bettye Myers suggested that each entity look at the document and suggest any changes to either Gilbert Bernstein of the DISD, Don Hill of the County Commissioners or Lloyd Harrell of the City. The Committee could then review the comments and incorporate any if necessary. Each entity could then look at the completed document and decide whether to approve it. 343 344 City of Denton City Council Minutes January 10, 1990 Page 3 With no further business, the meeting was adjourned at 1:25 p.m. J~-I~ER/~A~TERS C~I~TY SECRETARY CITY OF DENTON, TEXAS 3229C