Minutes April 30, 1991CITY OF DENTON CITY COUNCIL MINUTES
APRIL 30, 1991
The Council convened into the Work Session at 5:15 p.m. in the
Civil Defense Room.
PRESENT:
Mayor Castleberry; Mayor Pro Tem Boyd; Council
Members Alexander, Ayer, Gorton, Hopkins and
Trent.
ABSENT: None
1. The Council convened into the Executive Session to
discuss legal matters (considered action in Woodson v. City),
real estate, and personnel/board appointments (considered
appointments to the Building Code Board, Community Development
Block Grant Committee, the Electrical Code Board, the Historic
Landmark Commission, the Human Services Committee, the Downtown
Advisory Board and the Sign Board of Appeals.)
2. The Council received a report and held a discussion
regarding a proposed sprinkler ordinance.
Lloyd Harrell, City Manager, stated that when John Cook, Fire
Chief, arrived in Denton, a survey was done regarding
weaknesses/strengths in the Fire Department. The analysis
found that the Fire Department had not provided any additional
staff recently and as a result, the City was approximately 21
men short of the standards even after the opening of Station
6. The problem was that economic conditions were down and the
addition of 21 more firefighters would be a yearly cost of ~ore
than $600,000. The Chief was challenged to come up with
innovative ways to work toward improving the fire service
within the community which would not require large expenses.
There were a number of suggestions to improve fire service and
avoid major expenditures which Cook developed including (1)
emphasis on fire prevention activities, (2) a long range
adjustment on the type of fire equipment purchased, (3) an
increase in training of City employees in the use of
extinguishers, (4) relocation of one fire station in the
future, (5) an increase in mutual aid agreements, (6)
outfitting all firefighters with pagers, and (7) a sprinkler
ordinance for the community.
John Cook, Fire Chief, stated 75% of what the Fire Department
did was in the area of emergency medical, 20% of the calls were
ones which a single engine- company could handle. Only 5% of
the call volume was for structure fires. Unfortunately that 5%
represented 99.9% of the potential fire loss. Staff worked
with the Governmental Relations Committee, a Task Force from
the Chamber and home builders/apartment builders to develop a
sprinkler ordinance. The requirements of the proposed
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April 30, 1991
Page 2
ordinance included an amendment to the 1985 edition of the
Uniform Building Code to require that new construction of
combustible construction of over 5,000 square feet, constructed
after June 1, 1991, would be required to be sprinklered or any
non-combustible building of over 10,000 square feet. Two
exceptions were (1) single family dwellings which had less than
5,000 square feet of heated/air conditioned space would need to
separate non-heated/air conditioned space by a one hour fire
wall which extended to the roof and (2) two-family/apartments
of combustible construction divided into areas of less than
5,000 square feet separated by a four hour fire wall or 10,000
square feet for non-combustible construction. All new
basements, with the exception of single family, would need to
be sprinklered. For an existing building to be sprinklered, it
had to meet two criteria (1) be at least 10,000 square feet on
the day the ordinance passed or enlarged up to 10,000 square
feet, and (2) be enlarged to more than 25% of the total floor
area as it existed on the day the ordinance passed. A series
of trade-offs had been developed to allow some easing of code
requirements to off-set the costs of sprinklers.
Mayor Pro Tem Boyd asked if the ordinance were not passed and
the Fire Department's budget were not increased, what would be
the effect in the future on fire insurance.
Cook replied that if the ordinance were not passed and there
were no additions to staff, the Department would have to
rethink the way it fought fires. Presently, it was very
aggressive and provided interior fire fighting. In the future,
they would check the building to determine that it was not
occupied and would withdraw from the building. The adjacent
property would be protected.
Council Member Alexander asked for an explanation of the fire
lane trade-off.
Cook replied that currently every exterior wall needed to be
within 50' of a fire lane. With the sprinkler ordinance, that
was increased to 150'.
Council Member Trent asked the number of metroplex cities which
had a sprinkler ordinance.
Cook replied 18 of the 19 cities surveyed used the Uniform
Building Code. Ten cities had modified the Uniform Buildin9
Code in terms of sprinkler requirements and three had
specifically addressed some type of residential sprinkler
ordinance.
Council Member Trent stated that since 1987 there had only been
two fatalities in fires. One was in a small house and one was
in an apartment. He felt that if homes 5,000 square feet and
above were sprinklered, nothing was changed.
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April 30, 1991
Page 3
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Cook replied that major changes had occurred. One was that it
would be safer for firefighters to enter a building. In the
statistics held by the National Fire Protection Association,
there were no cases of firefighters killed where sprinkler
systems worked and. no cases of multiple fatalities where
sprinklers worked. Sprinklers would not have saved either of
the two individuals mentioned. One was a murder with a fire to
cover up the murder and the other lady died at the door.
Council Member Trent stated that Cook had indicated that the
Department could only fight a 2500 square foot fire.
Cook replied 500 gallons per minute was what they were able to
deliver.
Council Member Trent stated that if that was correct and the
proposed ordinance would sprinkle a house 5,000 ~square feet and
above, was the wrong segment being addressed.
Cook replied that in a single family dwellings there were no
large living areas that would help contain the fire.
3. The Council received a report and held a discussion
regarding a proposed ordinance designating the City of Denton
as exclusive provider of commercial solid waste services in the
City of Denton.
Lloyd Harrell, City Manager, stated the solid waste commercial
situation had been worked on since August, 1988 when the
Council appointed the Solid Waste Advisory Committee to look
into the solid waste situation and offer recommendations for
solid waste and the landfill. In July 1989, the SWAC Committee
recommended to Council that the City of Denton become the
exclusive provider for commercial solid waste in Denton. That
recommendation went to Council and Council decided to hold a
public hearing on that recommendation. During that public
hearing process, a number of individuals appeared in opposition
to the proposal. Based in part on that citizen input, the
Council asked staff to go out for bids on the possible sale of
the commercial system. This was done and Waste Management bid
$1.9 million. The Public Utilities Board recommended that the
City consider an exclusive provision. The bid went to the
Council in two forms and was rejected. The Council, at that
point, asked staff to prepa.re an ordinance making the City the
exclusive provider of commercial solid waste.
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City of Denton City Council Minutes
April 30, 1991
Page 4
There were two options available, one to reject the ordinance
or table the ordinance and continue status quo and the other
was to adopt the ordinance. The differences of the
alternatives were reflected in the residential rates projected
by staff. If the City adopted the exclusive ordinance and in
order to have the solid waste system fiscally responsible in
1992, staff was projecting a rate increase from $9.95 to
approximately $10.45. If the situation remained status quo,
staff was projecting a rate increase from $9.95 to
approximately $11.35. The status quo scenario assumed that the
City would keep the same level of customers it now had. If 2%
of the customers were lost per year, the rate increase would
have to go up to about $11.50. The projections for the early
years were not too bad but by the year 2005, staff was
projecting the rates to be $12.50 per month with the exclusive
provisions. With the status quo provision and the same level
of customers, the rate would be approximately $14.75. The
difference in the rates would be if 2% of the City's customers
were lost per year, then the rate would be $21.00 per month.
If the system were not sold and the City did not assume the
exclusive provision, the 2% loss was a real risk. As a
government entity competing with the private sector, the City
was at some disadvantage. The private sector could take the
better accounts while the City had to take all accounts and at
whatever price the Council had adopted by ordinance. The City
did not have the option to adjust prices according to the
individual circumstances. Two other concerns in keeping the
status quo were that (1) the contract with Waste Management
contained a listing of every City customer and the rates
charged and (2) the City was at a disadvantage not only because
of its lack of flexibility with customers but was also at a
disadvantage of trying to be in the same market place with
multi-billion dollar corporations.
Council Member Trent stated that the City collected a franchise
fee that was tacked on to the fee schedule to the others doing
business in the City and that was one option that they did not
have that the City had. He did not feel that the City was at a
disadvantage.
Bill Angelo, Director of Community Services, stated that the
City would need approximately 37 roll-off containers and about
704 dumpsters to replace those existing in the field. A front
load and side load truck- would be needed to take on the
additional capacity which would be approximately $71,000 for
the two vehicles on a three year lease purchase payment. Two
additional employees would have to be hired. Total program
costs for the first year would be approximately $629,038.
Revenue projections were estimated to be $652,000 from the
additional business.
City of Denton City Council Minutes
April 30, 1991
Page 5
Council Member Alexander felt the City should have some control
over solid waste collection in the City and that it ~might
become a question for economic development.
The Council then convened into the Special Call Session at 7:00
p.m. in the City Council Chambers.
PRESENT:
Mayor Castleberry; Council Members Ayer, Gorton,
and Trent.
ABSENT:
Mayor Pro Tem Boyd; Council Members Alexander and
Hopkins
Pledge of Allegiance
The Council and members of the audience recited the Pledge of
Allegiance.
Mayor Pro Tem Boyd and Council Members Alexander and Hopkins
returned to the meeting.
Public Hearings
A. The Council held a public hearing and considered
adoption of an ordinance amending Sections 5-3 and 5-5 of
Article I of Chapter 5 of the Code of Ordinances of the City of
Denton, Texas (Buildings) to provide for amendments to the
Uniform Building Code; requiring that automatic sprinkler
systems be installed in certain buildings; amending Article
4.07(e) of Appendix A of the Code of Ordinances to provide for
reduction in the fire protection water capacity requirements in
certain circumstances; providing exemptions from certain
requirements of the Uniform Building Code in Group A, Division
3 and 4, Group B and Group R occupancies where such buildings
are equipped with automatic sprinkler systems; repealing all
ordinances in conflict herewith; providing for a maximum
penalty in the amount of $2,000 therefor for violations of
Sections I, III or IV; providing a maximum penalty in the
amount of $500 for violations of Section II thereof.
The Mayor opened the public hearing.
Chuck Carpenter, Chamber of Commerce, presented a position
statement approved by the Denton Chamber of Commerce Board of
Directors on April 18, 1991:
"In regard to the proposed automatic fire sprinkler
ordinance, the Board of Directors of the Denton
Chamber of Commerce is satisfied with the nationally
recognized Uniform Building Code in its present form.
If the City Council, in its judgment, deems that it
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City of Denton City Council Minutes
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Page 6
is in the best interest of all citizens of Denton to
amend this ordinance, with regard to both existing and
future commercial buildings, we accept the proposed
draft as submitted by staff to the City Council on
April 5, 1990 with the exception of Section 1065b
pertaining to sprinkling of R3 single family dwellings
regardless of size."
Mayor Pro Tem Boyd stated that the official position of the
Chamber was that portions of the ordinance were unacceptable.
Carpenter replied that prior negotiations dealt with commercial
and industrial usage. It was not until recently that it
applied to residential. There had been a meeting of home
builders and they informed him that the proposed ordinance was
acceptable. He felt that based on all parties now agreeing
that the entire ordinance could be accepted.
Russell Bates stated that he had been on the committee working
on the proposed ordinance. He endorsed the ordinance as
written.
Fred Gossett, Vice-President and incoming President-Home and
Apartment Builders Association, stated the Association's
primary objective was to not have single family housing
included in the ordinance or affected as little as possible.
The Association would still prefer to be guided by provisions
of the Uniform Building Code as it was uniform and did not
create a tendency to cause confusion in cases of individual
interpretation. He wondered if the wrong issue was looked at.
Since 1980 not a single additional firefighter had been added
to the City staff. He believed that all of the facts should be
determined and then do whatever was necessary.
Mayor Pro Tem Boyd asked if Gossett was saying that he would
prefer to hire more firefighters, buy more equipment and raise
taxes than to pass the ordinance.
Gossett replied yes if that was what was required. He felt
that the citizens of Denton deserved first class fire
protection if that was what the City did not have. He felt the
citizens of a city, if given the opportunity, would opt to pay
for the services.
Mayor Pro Tem Boyd stated that the total cost of sprinkling was
much less to the community than the cost of hiring new
firefighters and buying new equipment. Was Gossett saying that
he would rather pay more in taxes than somewhat less in
construction costs.
City of Denton City Council Minutes
April 30, 1991
Page 7
91
Gossett replied yes that he would like to see it spread out
over a broader base.
Wayne Allen, Chair-Building Code Board, stated that there were
two different issues in the proposed ordinance. One was
commercial/industrial and the other was residential. The
residential issue was not discussed in length by the
Committee. The Building Code Board voted to accept the
ordinance as written with the exception of the residential area
until that area could be discussed further. Apparently that
had been done.
Mayor Pro Tem Boyd asked how many homes would be affected by
the square foot requirement for sprinkling.
City Manager Harrell replied that a search of the building
permits since 1980 indicated that three structures would have
been affected.
David Biles stated that he was in support of the ordinance.
Other issues involved in the proposed ordinance included the
safety of citizens. In his opinion, the proposed ordinance
bridged the insufficiency between the City's ability to fight
fires and the Department's staff.
Joe Mikelonis, Chair-Denton Apartment Association, spoke in
opposition to the proposed ordinance. He stated that the
Association was supportive of the provisions which exempted
existing structures but was opposed to the provisions requiring
sprinklers in apartment houses of more than 5,000 square feet
regardless of height, area separation walls or exterior wall
openings. The Association believed the amendment went. far
beyond the accepted standards established by the Uniform
Building Code and would impair the ability of Denton to
construct new multi-family units. The 5,000 square foot
provision would require separation of dwellings for
approximately every five to eight apartment units. This
requirement was two to three times more restrictive than the
current Uniform Building Code. The members of the Apartment
Association remained in strong support of the sprinkler
requirements outlined in the Uniform Building Code and believe
the Uniform Building Code provisions provided substantial fire
containment requirements for all newly constructed apartment
houses. The Uniform Building Code required all apartment
houses of three stories or more in height or containing more
than 15 dwelling units to be sprinklered.
The Mayor closed the public hearing.
City of Denton City Council Minutes
April 30, 1991
Page 8
The following ordinance was considered:
NO. 91-065
AN ORDINANCE AMENDING SECTIONS 5-3 AND 5-5 OF ARTICLE
I OF CHAPTER 5 OF THE CODE OF ORDINANCES OF THE CITY
OF DENTON, TEXAS (BUILDINGS) TO PROVIDE FOR AMENDMENTS
TO THE UNIFORM BUILDING CODE; REQUIRING THAT
AUTOMATIC SPRINKLER SYSTEMS BE INSTALLED IN CERTAIN
BUILDINGS; AMENDING ARTICLE 4.07(E) OF APPENDIX A OF
THE CODE OF ORDINANCES TO PROVIDE FOR REDUCTION IN THE
FIRE PROTECTION WATER CAPACITY REQUIREMENTS IN CERTAIN
CIRCUMSTANCES; PROVIDING EXEMPTIONS FROM CERTAIN
REQUIREMENTS OF THE UNIFORM BUILDING CODE IN GROUP A,
DIVISION 3 and 4, GROUP B AND GROUP R OCCUPANCIES
WHERE SUCH BUILDINGS ARE EQUIPPED WITH AUTOMATIC
SPRINKLER SYSTEMS; REPEALING ALL ORDINANCES IN
CONFLICT HEREWITH; PROVIDING FOR A MAXIMUM PENALTY IN
THE AMOUNT OF $2,000 THEREFOR FOR VIOLATIONS OF
SECTIONS I, II, AND III; PROVIDING A MAXIMUM PENALTY
IN THE AMOUNT OF $500 FOR VIOLATIONS OF SECTION IV
THEREOF; AND PROVIDING FOR AN EFFECTIVE DATE.
Council Member Trent stated that he had some reservations
regarding the proposed ordinance. With the forthcoming new
version of the Uniform Building Code, he felt there would be
some provisions which might cause the Council to take a further
look at sprinkling of private residences.
Hopkins motioned, Alexander seconded to adopt the ordinance.
On roll vote, Trent "aye," Alexander "aye," Hopkins "aye,"
Gorton "aye," Ayer "aye," Boyd "aye," and Mayor Castleberry
"aye." Motion carried unanimously.
B. The Council held a public hearing and considered
adoption of an ordinance of the City of Denton, Texas amending
Chapter 12 of the Code of Ordinances to provide that the City
of Denton shall be the exclusive provider of commercial solid
waste services within the City; providing for an exception for
special waste haulers with a permit; providing for an exception
for recyclable refuse haulers by registration.
Council Member Hopkins stated that the decision made two weeks
ago to not aell the commercial solid waste services was a
correct decision. She motioned to table the ordinance until
late August/first of September. The commercial solid waste
service was not operating at a loss. She understood that if
the service continued to lose 2% of its customer base per year,
that an exclusive contract, if the City were to stay in the
commercial business, would be necessary. She was against
closing out the free enterprise system unless it was absolutely
City of Denton City Council Minutes
April 30, 1991
Page 9
necessary. She felt the City should give the status quo
another three to four months and analyze the statistics after
that time. The February cut-off could still be made if
necessary. Her motion also included tabling the public hearing.
Council Member Trent seconded the motion.
City Manager Harrell asked if the postponement date could be
the first meeting in October rather than in the middle of the
budget discussion.
Council Member Hopkins stated that the postponement date would
be Tuesday, October 1, 1991. Council Member Trent agreed to
the change.
On roll vote, Trent "aye," Alexander "nay," Hopkins "aye,"
Gorton "nay," Ayer "nay," Boyd "nay," and Mayor Castleberry
"aye." Motion failed with a 4-3 vote.
The Mayor opened the public hearing.
Ed Morrison stated that he was in favor of the proposed
ordinance. He spoke in opposition to the selling of the system
to Waste Management and felt that the reactions of Waste
Management- to the rejection supported the decision. He had
read the proposed ordinance and believed it afforded the
flexibility and appropriate notice time for the City to become
the exclusive provider for solid waste services. He urged the
Council, with their knowledge learned from the studies which
began several years ago, not to defer appropriate action on the
ordinance. He felt there was an opportunity for the City to
reap substantial benefits by retaining control of the solid
waste disposition.
Mike Cochran stated that he supported the ordinance for local
control. He felt the citizens had spoken numerous times
through the SWAC Committee which wanted local control, the
Public Utilities Board which chose the option to have the City
as exclusive provider and the 1200 plus citizens who signed
petitions indicating local control. He felt the service was an
important asset to the community and a potential revenue source
and could keep the residential rates lower for a longer period
of time. The status quo scenario would not be feasible due to
the over aggressive marketing procedures of Texas Waste
Management as evidenced by their recent ads in the newspaper.
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City of Denton City Council Minutes
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Page 10
Joyce Poole stated the proposed ordinance was an innovative
responsible ordinance. An ordinance which allowed private
enterprise to work under the accountability of the area
citizens through the democratic process. Private companies
would be allowed to be competitive bidders on the areas of
hazardous, bio-chemical, and special waste. Recycling
companies could bid on services and recycling would help reduce
the use of the landfill space. The threats of Texas Waste
Management infuriated people in the community. She urged the
Council to vote to pass the ordinance.
Curtis Ramsey felt that the issue had nothing to do with the
free enterprise system. He felt that the City did not need a
foreign element to manage its affairs and should maintain local
control. A long term contract did not allow any future
consideration. He was in favor of the Council passing the
ordinance.
Suzanne Bloxson urged the Council to vote for the ordinance.
Brenda Fosmire was in favor of the ordinance for two reasons.
One was for the potential for income for the City and the
second was the option for opportunities available to the City.
Frances Matzinger stated that she and her husband lived next to
the City landfill. Their desire for quality of life may be at
risk if all the solid waste was disposed at the City landfill.
She felt that the size of the landfill was not adequate to
service the City. She had been told that the land in that area
was not suitable for a landfill. All the facts were not known
about the landfill. The landfill had served a purpose but it
had outlived that purpose. She urged the Council to close the
landfill as soon as possible.
George Gilkeson stated that when he made the report from the
SWAC Committee recommending the City become the exclusive
collector, he received a lot of complaints. People told him
that they wanted a choice, not a monopoly. He had spoken in
favor of the Waste Management contract because it did not give
Waste Management a monopoly. It gave the City a lot of money
and the commercial customers a choice. He asked the Council to
reconsider the vote to table the issue and to reconvene the
SWAC Committee to restudy the issue.
Joe Mikelonis, President of Hardin Properties, stated the the
issue did not impact the residential area as much as the
commercial area. He wanted some control over certain
components which dictated the future of his company residing in
Denton.
City of Denton City Council Minutes
April 30, 1991
Page 11
Alan Zimmerer stated that he had a concern of when and the
number of businesses the government was going to take over.
This was the same type of idea with the City having an
exclusive provider arrangement. He was not against the City
being in the solid waste business but competition was needed.
He asked the Council to vote against the proposed ordinance.
David King asked for a choice as that was what made the economy
healthy and strong. Choice would not be available with the
exclusive contract. If he did not receive his choice, he would
ask the City for compensation. He wanted a contract similar to
the one he currently had and would demand such if the City went
to an exclusive provider arrangement.
Jonathan Cott felt that the issue was not one of a matter of
control as it was one of providing the most effective and
efficient quality of service for collection and disposal of
solid waste to the commercial customers in the City of Denton.
In his opinion, it would be imprudent and perhaps even a
financial disaster to vote in favor of the ordinance. A
monopoly violated and undermined the basic spirit under which
free enterprise existed. What would prevent the City from
unfair pricing and how would the citizens express immediate
change in that pricing when detected. He felt the Council
could not vote free competition out of the City of Denton and
asked the Council to vote the ordinance down.
Fred Gossett requested the Council to allow him to make a
choice of who removed his solid waste. He felt that a
competitive situation had a way of being a factor that assured
all concerned that the job would be done in the most efficient
and cost effective manner. He asked the Council to reconsider
the motion to table the issue and carefully weigh all of the
facts.
Roger Fredrick stated that four years ago he and his wife
opened a business in the City. He remembered that there was a
large difference between bids received from a private hauler
and one received from the City. He wanted the opportunity to
make a selection. He would welcome the City's bid if it were
to remain in a competitive situation. He had a long term
contract with his current hauler and would expect his rates to
be honored if the City took over the business.
Doris Womack stated that she had used many different haulers
for solid waste and was currently using Texas Waste
Management. She felt future trash hauling by the City of
Denton was guess work and mere projection. She urged the
Council to reconsider the motion to table the issue.
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City of Denton City Council Minutes
April 30, 1991
Page 12
Gayla Brown stated that in her business, she had used many
different solid waste services. She was currently using Texas
Waste Management. She had prior problems with the City. She
felt that competition allowed for better service.
Jerry Cott asked the Council to reconsider the motion to table
the issue. He stated that all the charts staff had prepared
indicate seventeen years of complete upward growth with no
breaks for a recession, no breaks for bad business. The costs
kept going up. That was not realistic. He urged the Council
to postpone a decision on the issue.
Diane Forester felt that new business would view the exclusive
contract as a monopoly and not come to Denton. She had seen
Denton grow and did not want that growth to stop.
Steve Bigelow, Regional Vice-President and General Counsel of
Waste Management of North America, Inc., stated that a
municipal trash service was a good thing in past times. The
idea that the City of Denton could afford its own landfill was
not realistic. The City of Denton, subsidized by the franchise
fees paid by the free market hauling companies and paying not
City taxes on its property and equipment, attempted to compete
in the business of hauling the City's commercial accounts and
failed. The solution proposed by the City was not to get out
of the business or sell off this "wasting' asset but to use
force against its commercial customers now that persuasion had
failed. The City was proposing to socialize its solid waste
collection and disposal business and force the commercial
customers of Denton to pay a rate which would support the
City's inefficient service. Government had a duty to act in a
fair and equitable manner regardless of whatever powers it
might hold. The idea that the City of Denton could, by one
ordinance, confiscate nearly half of the commercial waste
collection business in the City and force the commercial waste
customers of the City to support their wasteful operation
violated that principle of government. The Constitution
provided that government shall not take private property
without just competition. Texas Waste Management had contracts
with its customers. The City, acting as a competitor or market
participant, was threatening to void the contract of its free
market competitors through the use of governmental force. In
this instance, the City was asserting defenses to the doctrine
of just compensation. There might be technical defenses to
Waste Management's right to just compensation in the current
state of the law. But the laws of expression of what the
people believed was right and just and the questions presented
by this scheme to protect the comfort of the City's solid waste
department at the expense of the free enterprise ~y~em, were
questions which might finally be only answered by the Supreme
Court of the United States and they might take it just that
far. The City was making no promise to pay damages for this
business
City of Denton City Council Minutes
April 30, 1991
Page 13
it would be taking. No compensation to commercial customers
for loss of a better deal Waste Management offered. The City
was taking by force, the business which it could not attract
through service or pricing. The City intended to force the
City commercial customers to pay the high prices it needed to
support its inefficient system.
David Biles hoped that the Council was not intimidated with the
big corporation lawyer. The issue was not one of lawsuits.
Businessmen had come before the Council and asked that they be
given a choice. He hoped the Council would not be swayed by
the threats of the previous speaker and that they would hold to
their convictions.
Johnny Smith, General Manager of North Texas Landfill Division,
stated that he was opposed to the ordinance which would
monopolize the business. He felt that competition brought out
the best of all business. He was concerned where the City
would dispose of future waste and questioned how much time was
left in the life of the landfill. He stated that the City's
site was not Subtitle D qualified and questioned who would pay
for the regulations when they became necessary.
Charles Fiedler, Professional Engineer - Waste Management of
North America, stated that he was concerned with water quality
as a resident of Highland Village. He was concerned that the
landfill did not adequately address the handling of waste and
the protection of the environment at the facility. He asked
the Council to vote against the ordinance in order to control
costs and preserve the environment.
Howard Pena, Controller-Texas Waste Management, stated that as
an accountant with ten years experience, the numbers he had
seen and heard over the past three months were difficult to
understand. He felt that projections past two-three years were
not valid. For example, a previous Scenario 8 had a cumulative
gain of $13.2 million by 2005. A new Scenario 8 had $4.9
million. Of the $4.9 million, $1.8 million was interest on the
projected profit. Of the remaining $3.1 million, over one-half
occurred in the next century. He did not agree with the
staff's numbers. He presented new figures for projection of
costs, employee figures, lease/purchases for roll-off trucks
and landfill projections. The commercial solid waste
collection system would lose money according to his figures.
Larry McGee, Vice-President-Texas Waste Management, stated that
he was confused by the recent turn of events, especially the
latest position of Council to confiscate their business. This
was based on staff's numbers alone without any input from them
or any other hauler. As a certified public accountant, he
challenged the City staff to explain how the staff could double
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April 30, 1991
Page 14
the customer account by confiscation and withstand a 16% drop
in the average revenue per customer. The average customer
revenue currently was $116 and was projected to be $97 when the
City took over. As a result of the accounting presented by
staff, he would like to have the City go out and have the
figures audited with a qualified firm. He did not believe the
projections by the staff and felt the evaluation prepared by
staff was biased. He requested to meet with the Council
individually or as a group to discuss the realistic cost of
operation of this type of service. He felt the exclusive
option was not the best alternative for the community. He
asked if the Council did feel this was the best alternative,
then they guarantee his people and himself the same employment
guarantee Waste Management had guaranteed the City employees.
John Gustafson, General Manager-Texas Waste Management, stated
that the Council was asking for an ordinance which would put
all private waste haulers out of business in the City of
Denton. This business would be confiscated and serviced by the
City. The basis for this action was the SWAC report and the
Public Utilities Board recommendation. Earlier, before
tonight, George Gilkeson, Chairman-SWAC Committee, stated that
the information the Committee used to reach their conclusion
was spoon-fed to them by staff and that the recommendation to
Council was the wrong one made with insufficient information.
The Public Utilities Board refused to meet with Mr. Flood to
discuss Waste Management's situation and their side of the
contract issue. The reason the City was losing money was not
due to the number of accounts it had but rather because they
did not have professional solid waste managers. If the City
decided to confiscate the private industry to create a monopoly
under the guise of the common good, it was obvious what the
businesses and citizens of Denton had to look forward to.
Decreased service, increased rates and higher taxes. He asked
the Council to listen to the Chamber, citizens and the business
community who wanted a choice and did not want socialism.
Mickey Flood, President-Texas Waste Management, stated that
initial conversations were that the City was losing money on
the commercial solid waste system. At the urging of the
Chamber of Commerce and from the business community, the City
was asked to compete in the open market or sell its business
through a bid process. The City did bid and Waste Management
was the best bidder at $1.9 million. The Council rejected the
bids rather than opt to award it to Texas Waste Management.
The question which remained was one of survival and existence
of a business going forward. The staff had been asked to draft
an ordinance establishing a municipal monopoly. Texas Waste
had problems with the above scenario for the following
(1) any government entity confiscating any man's business
smacked of a constitutional violation of a right and freedom to
free enterprise, (2) Texas Waste Management had professional
managers
City of Denton City Council Minutes
April 30, 1991
Page 15
specializing only in the solid waste industry and did not have
to worry about any other areas, (3) nation-wide experience had
helped establish productivity standards and equipment
specifications, (4) Waste Management had not rejected any
customer in the City of Denton and offered to have the City
give them the worst twenty or thirty accounts and he would
subcontract at the same price the City was providing. Waste
Management took strong exception to the City staff's
forecasting assumptions and numbers. He challenged the City to
an independent certified public audit by a Big Six firm
according to GAP and if the forecast numbers were within 20%,
Waste Management would pay for the audit.
Pam Rader managed a large apartment complex in Denton and was
currently using Waste Management. She was satisfied with the
service and equipment with Waste Management. If the City could
guarantee that her present services would continue and if they
did continue, she felt it would be the first time that a city
government run service would benefit a taxpayer over a
privately run service. As a resident, she felt this would
result in more taxation in one form or another. She wanted a
choice of who she did business with.
Weldon Burgoon appreciated the ability of choice of who he did
business with.
Richard Hayes stated that two weeks ago, staff recommended to
Council not to go with an exclusive contract with Waste
Management. Currently staff was recommending to Council to not
only not get out of the commercial solid waste business, but.to
become the exclusive provider. He stated that the commerce
clause of the United States Constitution was based on the
principle that government should regulate not be commerce.
Twice the Chamber of Commerce through its Board of Directors,
unanimously resolved that the system should be a competitive,
free-market system. Private enterprise should not be the
exclusive provider. Government should not be the exclusive
provider. He asked the Council to leave the choice to the
customers.
Bill Holman stated that he had been financing garbage companies
for the last twenty years. Up until July of 1990, he worked
for Waste Management of North America. He currently was a
consultant in Houston. He'asked the Council to not to act in
haste. He stated that he would volunteer his services and
would do a study for the City. He asked the Council to table
the issue for about 60 days and appoint a true committee to
study the issue.
Bob Matthews stated that he was satisfied with Waste Management
and was against a monopoly. He felt that a vote for the
ordinance was a vote against business.
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City of Denton City Council Minutes
April 30, 1991
Page 16
Ann Fay stated that she used City services at the Golden
Triangle Mall. She felt competition was good and wanted a
choice of who she did business with.
Fred Hill detailed the history of his business which he started
in Denton and sold to Waste Management. He would like to have
a choice as a businessman. He would like to see Council
continue to give Denton a choice.
Wayne Hyde presented a letter from the Manager of Paces
Crossing regarding the issue. (Exhibit A)
Bob Powell stated he saw this issue as pure socialism as it was
government confiscation of private property. He did not feel
the City wanted to reverse the current trend away from
socialism and start it in Denton.
Steve Kniatt stated that he used the City's collection system.
Several weeks ago he received estimates on a new waste
collection system. His bill would be approximately one-half of
what he was paying the City. He also found that he was paying
for two collections per week and and was receiving only one.
He had been told by the City personnel that if he did not like
the City service, he could call for someone else. He would not
have that opportunity if the Council passed the ordinance.
The Mayor closed the public hearing.
Council Member Alexander asked how the City's rates compared to
other cities rates.
Nelson replied that on average, Lewisville's rates were 10-20%
higher than in the City of Denton.
Council Member Alexander stated that citizens had stated that
they wanted a choice. He wanted to make sure that they wanted
the choice of who they did business with under the present
circumstances. Or were the citizens saying that they wanted
the lower rates they now enjoyed. He was not sure that over
time, that lower rates would continue with the present
circumstances. He felt that over time, the City would have
lower rates if the City became the exclusive provider.
Council Member Ayer ~tated- that an individual had stated that
the Council was rushing into a hasty decision. He asked Nelson
to review how long the Council had been studying the issue and
the amount of material given to Council.
Nelson replied that Council began by appointing a committee in
the summer of 1988 and the Committee gave a recommendation in
1989. A public hearing followed and following that public
hearing, the system was put out for bids.
City of Denton City Council Minutes
April 30, 1991
Page 17
Council Member Ayer stated that one of the speakers believed
that the idea of an exclusive arrangement was a new idea which
had developed in the last two-three weeks. That was the
recommendation of the SWAC Committee made in 1989. It was not
a new idea and was a part of the deliberation, discussion and
consideration of the Council for a long time.
Council Member Trent felt that the reference was made to a
different set of figures and perhaps it would require the
Council to do more study on those figures.
Council Member Ayer replied that he understood the major
difference in the figures resulted from the fact that in the
preceding performas, the constant was for residential
collection. The more recent performas adjusted the rates for
residential collection to reflect the profit/loss and the
commercial rates were held constant. He stated that no one on
either side had indicated that rates were going to stay the
same or that they were going to go down. The rates would go up
regardless of who provided the service and how it was done. He
felt there was a better chance of controlling the rates if the
City were the exclusive provider.
Council Member Trent stated that there had been an offer from
Waste Management which the Council might want to consider.
Council Member Ayer stated that he felt it was strange that
this had been discussed all of these months and years and none
of these people had come forth before with this type of offer.
Mayor Pro Tem Boyd stated that the offer was that if the
projections were right, Waste Management would pay for the
audit. Otherwise, the City had to pay for it. He did not
remember seeing anything in the budget to pay for such an
item. He was not willing to commit the City to pay for such an
item even with such an offer. He had also heard a number of
comments indicating that the staff had recommended various
positions to Council. He did not remember staff recommending
any of the proposals. Staff had presented different proposals
with advantages and disadvantages of each. Council had voted
to reject the contract and the Council directed staff to
prepare the ordinances and documents.
Council Member Trent felt that it was to the City's advantage
to take the offer from Waste Management.
City Manager Harrell stated that it was surprising to him that
at the time that this was before the Council a month ago and
even two weeks ago using the same numbers, those numbers were
not questioned at that time by Texas Waste Management. It was
surprising how those numbers were not suspect. He also felt
10!
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City of Denton City Council Minutes
April 30, 1991
Page 18
that staff had tried to put together the best projections
relying on their professional experience. The Utility staff
had done other performas and those had proved to be very
accurate and on target. Hopefully the Council had confidence
in the ability of its staff to put together realistic numbers
which had in the past and he was certain in this case in the
future, would prove to be realistic. He had complete
confidence in the numbers presented by staff.
Council Member Ayer replied that he had complete faith in the
professionalism of the City staff. He had provided a great
deal of material regarding the issue. He had more faith in the
objectivity of the City's professional staff presenting figures
regarding this matter, than in the figures being presented by a
private corporation which obviously had a very intense desire
to have the business because of the amount of money they could
make from it. They had a personal stake in the matter far
greater than anyone on Council or any member of staff could
possibly have.
The following ordinance was considered:
NO. 91-066
AN ORDINANCE OF THE CITY OF DENTON~ TEXAS, AMENDING
CHAPTER 12 OF THE CODE OF ORDINANCES TO PROVIDE THAT
THE CITY OF DENTON SHALL BE THE EXCLUSIVE PROVIDER OF
COMMERCIAL SOLID WASTE SERVICES WITHIN THE CITY;
PROVIDING FOR AN EXCEPTION FOR SPECIAL WASTE HAULERS
WITH A PERMIT; PROVIDING FOR AN EXCEPTION FOR
RECYCLABLE REFUSE HAULERS BY REGISTRATION; PROVIDING
FOR A PENALTY IN THE MAXIMUM AMOUNT OF $500.00 FOR
VIOLATIONS THEREOF; AND PROVIDING FOR AN EFFECTIVE
DATE.
Ayer motioned, Gorton seconded to adopt the ordinance.
vote, Trent "nays" Alexander "ayes" Hopkins "nay,"
"aye," Ayer "aye," Boyd "aye," and Mayor Castleberry
Motion carried with a 4-3 vote.
3. Ordinances
On roll
Gorton
"nay."
A. The Council considered adoption of an ordinance
authorizing the Mayor to execute an agreement between the City
of Denton and Corgan Associates Architects relating to
professional services to evaluate the City's space needs and
develop a long range master plan for City facilities.
The following ordinance was considered:
City of Denton City Council Minutes
April 30, 1991
Page 19
103
NO. 91-067
AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN
AGREEMENT BETWEEN THE CITY OF DENTON AND CORGAN
ASSOCIATES ARCHITECTS RELATING TO PROFESSIONAL
SERVICES TO EVALUATE THE CITY"S SPACE NEEDS AND
DEVELOP A LONG RANGE MASTER PLAN FOR CITY FACILITIES;
AUTHORIZING THE EXPENDITURE OF FUNDS THEREFORE; AND
PROVIDING AN EFFECTIVE DATE.
Boyd motioned, Ayer seconded to adopt the ordinance. On roll
vote, Trent "aye," Alexander "aye," Hopkins "aye," Gorton
"aye," Ayer "aye," Boyd "aye," and Mayor Castleberry "aye."
Motion carried unanimously.
Miscellaneous matters from the City Manager.
Lloyd Harrell, City Manager, presented the following items:
A. The Water Treatment/Water Distribution Department
was nominated for recognition in city categories between the
population of 50,000-150,000 in the State of Texas. The City's
operation and plant was selected by the EPA in the State of
Texas in that population category.
B. Absentee voting was completed
individuals voting absentee by personal appearance.
with 819
Council returned to Work Session Item #4.
4. The Council received a report and held a discussion
regarding City redistricting and gave staff direction.
Council Member Gorton stated that two years ago, the Council
began looking at redistricting. There was a problem when that
issue was discussed with the County. Their position was that
the County precincts were established based on the number of
registered voters with guidelines of not less than 100
registered voters and not more than 3,000 registered voters.
The City fell into a category where it had to deal with
population ranges. The overall goal was to create smaller
building blocks by splitting County precincts.
Mayor Pro Tem Boyd stated, that it was necessary to divide
County precincts in order to establish the City's voting
districts. For two years the City tried to remedy that by not
dividing the County precincts with City voting district lines.
The County Judge recently stated that the City could divide
current precincts but could not redraw the lines.
104
City of Denton City Council Minutes
April 30, 1991
Page 20
The County Clerk had attended one of the City's meetings and
stated that he would recommend to Commissioners Court to not
allow the City to proceed. The problem was that it was very
difficult to find polling places in new districts. The City
responded that if the City could find polling places in each
subdistrict for the County, the County Clerk would support the
plan. Boyd continued with an outline of the proposed splits.
Consensus of the Council was to place the item on the Council's
work session for the second meeting in May, and to take the
plan to the County Commissioners. The present Committee would
continue with the project.
5. The following official action was taken from the
Executive Session held during the Work Session:
A. Hopkins motioned, Boyd seconded to appoint the
following individuals to City Boards/Commissions:
Human Services Committee - Ruby Kerner
Community Development Block Grant Committee - Jack Weir
Historic Landmark Commission - Mary McCain
Building Code Board - Steve Kniatt
Electric Code Board - Greg Mitchell
John Hardinger
Sign Board of Appeals - Jim Tucker
Mike Wiebe
Sue Smith
Harry Eaddy
Frank Massey
Downtown Advisory Board - Kathleen Gigl
Fred Patterson
Bob Woodin
Herbert Holl
Don Davis
Don Hill
Leland White
Bill Thomas
Rahna Rainey
George Highfill
Barbara Philips
On roll vote, Trent "aye," Alexander "aye," Hopkins "aye,"
Gorton "aye," Ayer "aye," 'Boyd "aye," and Mayor Castleberry
"aye." Motion carried unanimously.
6. New Business
There was no new business suggested by Council Members for
future agendas.
City of Denton City Council
April 30, 1991
Page 21
With no further business, the
Minutes
meeting was adjourned.
105
cCi~/'~'EI~ WALTERS
SEC~TARY
OF D~NTON, TEXAS
3388C
106
EXHIBIT A
April 30, 1991
2411 E. 1-35 South · Denton, Texas 76205 · 817-565~1778
Metro (214) 434-1471
City of Denton
215 E. McKinney
Denton, TX 76201
Dear Mayor Castleberry; ~
It has come to my attention that the Denton City Cous~i is' Once aga~i'n ~ons~tering
assuming exclusive responsibility for solid waste services in Dentoh.
As manager of a 360 unit apartment community, this proposed legislation alarms me.
Apartment communities often require special services and attention that I strongly
feel a city managed collection service could nor would not be ~s ~ccomod~ting'~t,o"provide
as do our contracted companies. '
Furthermore, if the current companies we are contracting service too are not
providing adequate service, we have the option to terminate service with them
and seek serivce from another company. If the City is our only means of
collection service, we feel our service will decrease in quality.
Finally, voters should beware, because we will all be facing not only higher
taxes, but a problem with what to do with all of the trash that the City is
forcing us to keep in our backyards. With a monopoly of the solid waste service
it will only be a matter of time before rates go up and service goes down.
This issue will not set well with any member of the business community. Please
take into consideration that this matter is being forced upon us and we will
continue to fight for our rights.
Si~ncerely,
~Anita Magnus //
Property Manager ~
Pace Realty Corp.