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Minutes April 12, 1990CITY OF DENTON CITY COUNCIL MINUTES APRIL 12, 1990 Joint Session of the City of Denton City Council, the Denton Independent School District and the Denton County Commissioners on Thursday, April 12, 1990, at 7:00 p.m. in the Denton Independent School District Administration Building, 1307 N. Locustt Denton, Texas. PRESENT: Mayor Stephens; Council Members Alexander, Boyd, Gorton, and McAdams. ABSENT: Mayor Pro Tem Ayer and Council Member Hopkins. 447 Bettye Myers, DISD Board President, called the DISD Board of Trustees to order after declaring a quorum present. Ray Stephens, Mayor-City of Denton, declared a quorum of Council Members present and called them to order. The County did not have a quorum present with two representatives, Commissioner Don Hill and Commissioner Lee Walker. Bettye Myers, DISD, stated that this was a first for all three entities to hold a joint meeting on a matter which related to each entity. Ray Stephens, Mayor-City of Denton, felt it was a great achievement for all three entities to have worked on the policy. He suggested the term "investment incentive" might be a better term then "tax abatement" because it more accurately described the objectives. Don Hill, County Commissioner, stated that the County was in a different position in that it 'represented all the municipalities and ISD'S in the County. The County had passed a general policy on tax abatement which stated that the County was interested in tax abatement and would consider a proposal from any municipality brought to them. Lloyd Harrell, Denton City Manager and Chairman of the Tax Abatement Committee, stated that this had been a team effort with all the entities. He introduced the members of the Tax Abatement Committee and reviewed the background of the development of the policy. The development included fact finding sessions involving discussions with eleven different "experts", and the review of policies from other cities. The philosophical conclusion of the Committee was that they were opposed to a tax abatement program as it was economically difficult to justify and promoted unequal treatment among tax payers within the taxing jurisdiction. However, the Committee unanimously concluded that tax abatements were used in many states and was becoming very popular and widely used in Texas. If the City were going to compete, a reasonable tax abatement policy needed to be adopted on all three taxing levels. 448 City of Denton City Council Minutes April 12, 1990 Page 2 The policy would be considered on a case-by-case basis with a formal application process for new, expanding and modernizing basic industries, corporate office headquarters and distribution centers. Randall Boyd, Denton City Council, asked for definition of "basic industry". Harrell replied that the Denton Development Guide had been used as a reference point which defined the "basic industry" in regards to how much of the products were exported out of the community for consumption. Harrell then reviewed the formula for the value and term of the abatement. For a larger project, a longer period could be given at the 25% level. Council Member Boyd asked if the basis was the value of the structure. Harrell replied that initially the Committee recommended that the value be limited to the value of structures. Personal property had now been added to that value since the three entities had adopted the Freeport Amendment. Harrell continued that if a current industry expanded or relocated, the actual value of the structure would be multiplied by 125% prior to utilizing Table I which would give the industry another year or so of abatement. Applicants agreeing to extend infrastructure improvements to improve other industrial sites may be eligible for a greater tax benefit. The agreement would be a legal agreement between the company and the taxing jurisdictions. Adjustments had been made to the January 10, 1990 document which included wording changes, a clarification and reduction of questions from 33 to 28, and the application of personal property as well as buildings to the abatement. A summary of the policy indicated that it was a cooperative partnership with the three taxing entities, it was competitive but reasonable and was an innovative policy. The public hearing was opened. Chuck Carpenter, Denton Chamber of Commerce, stating the increment financing portion was commended the three bodies for their work. spoke in favor excellent. He Russell Bates stated he was in favor of tax abatement and felt it was the economic development of the 90's. He also commended the separate governing bodies working together as a unit to work for the betterment of the County and City. City of Denton City Council Minutes April 12, 1990 Page 3 Pam Anderson, representing the Perot Group, read a statement of support for the proposed policy. Roy Appleton, Jr., representing the Denton Publishing Company and the Economic Development Advisory Board, stated that if all things were equal, they would not be at this meeting and would be opposed' to any type of tax abatement. Most industries that came into a community first asked for specific information which include a question on possible tax abatement. It was very important to be competitive and heartily endorsed the policy. Fred Pole, Chairman-Denton Chamber of Commerce, stated that the policy allowed the entities to be competitive without being a give-away community. He felt that one of the highlights was that the entities were not under any obligations to grant an abatement and all applicants would be considered on a case-by-case basis. He agreed with Mayor Stephens that "tax abatement" could be replaced with "investment incentive". On behalf of the Chamber of Commerce, he recommended adoption. Jerry Cott, Sundown Ranch, stated that the public needed to understand that tax abatement was just one tool to help sell the community to other people. The abatement might temporarily give up money but would bring people who would spend money and purchase goods and services in Denton County and in the City. The City was competing not just with the Metroplex but also with the international community. Fred Gossett, favored the tax abatement which was one way to help the City of Denton to become the great city it could be. Jack Miller, stated that he was philosophically opposed to abatements but felt it was something that must be done. He felt it was a step in the right direction and endorsed the recommendations of the Committee. John Trent offered a rewording or addition of the application process. He suggested inserting a time frame for a response from the City. This would give an indication to the applicant that the application had been received and a possible time frame for consideration. He felt the tax abatement would help Denton in the future. Linnie McAdams, Denton Council Member, stated that she pleased to see the three entities working together and was disappointed that more "public" was not present to speak on the issue. She felt it was a marvelous effort. Carl Anderson, Vice-Chairman-Denton Chamber of Commerce and Vice-Chairman -United Way, commended the Committee's work and endorsed their action. 449 450 City of Denton City Council Minutes April 12, 1990 Page 4 With no further business, Gorton adjourn the Denton City Council. Meeting adjourned at 8:05 p.m. motioned, Boyd seconded to Motion carried unanimously. Commissioner Don Hill stated that it was important that the County was involved in the process from the beginning. He hoped that other cities would take that into account as Denton had done. Bettye Myers stated that it was unusual for three such entities to cooperative in such a venture and that the School District appreciated that cooperation. Holt motioned, Hudspeth seconded to adjourn the DISD Board of Trustees. Motion carried unanimously. With no further business, final adjournment was at 8:10 p.m. J~FEK//WALTERS SECrEtARY CiTY OF DENTONt TEXAS R H CITY O~ DENTON, TEXAS 3256C