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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 85 City of Denton City Council Minutes 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. City of Denton City Council Minutes April 30, 1991 Page 3 87 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. ¸88 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 89 90 City of Denton City Council Minutes April 30, 1991 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. 93 City of Denton City Council Minutes April 30, 1991 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. 95 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 97 98 City of Denton City Council Minutes 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. 99 100 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! 102 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.