Minutes February 25, 1992106
CITY OF DENTON CITY COUNCIL MINUTES
FEBRUARY 25, 1992
The Council convened into the Special Call Session at 6:00 p.m. in
the Civil Defense Room.
PRESENT:
ABSENT:
Mayor Castleberry; Mayor Pro Tem Hopkins; Council Members
Chew, Perry, Smith and Trent.
Council Member Alexander
1. The Council convened into the Executive Session to discuss
legal matters, real estate (considered leases with Cooke County
College and Morrison Milling Company), and personnel/board
appointments.
Council Member Alexander arrived during the Executive Session
discussion.
2. The Council received a report and held a discussion regarding
Section 9 Federal Transit Administration Financial Assistance.
Catherine Tuck, Administrative Assistant, stated that in order to
insure that SPAN did not have a gap in funding during the
transition from Section 18 to Section 9 funds, an application
needed to be received by the FTA by April 1, 1992. In order to
receive Section 9 FTA funds, the NCTCOG's 1992 Transportation
Improvement Program needed to be amended to include Denton's
program for 1992-93. In the next few months, a five year
comprehensive plan would be presented to Council. In Section 9
there was more money available for allocation. The City was
requesting $363,318 for a 12 month period as well as an additional
pro-rated amount for the thirteenth month. The funding request
included three new lift-equipped, 12-passenger vans for elderly and
handicapped transit and new, larger signs for the public trolley
system. A fifth trolley route will be started. Elderly persons
and persons with disabilities would also be eligible for half price
fares on the trolley system. SPAN and the City would also be
looking at a pass system on the public routes, with possible
reduced rates for frequent riders. SPAN also expected to receive
a bus and a trolley from an earlier Section 18 grant. New maps
would be printed and distributed during the 1992-93 fiscal year.
SPAN was predicting a ridership increase of 25% with the new route,
a 10% increase for handicap riders, and a 10% increase in elderly
ridership. Letters had been sent to the private transportation
providers such as the taxi companies to insure they had a clear
understanding of what was being proposed. A public hearing would
be held on March 5 to receive public input on the plan. The best
aspect of the funding was that there would be an increase in the
funding without an increase in the City's contribution.
3. The Council received a report and held a discussion regarding
an update on the Upper Trinity Regional Water District contracts
and gave staff direction.
City of Denton City Council Minutes
February 25, 1992
Page 2
107
Bob Nelson, Executive Director for Utilities, introduced two
members of the Board of Directors for the Upper Trinity Regional
Water District, A1 Utesch representing unincorporated county areas
and Tom Harpool representing the City of Aubrey. Nelson was asking
for Council direction to separate three aspects of the proposed
contracts. There was the raw water contract which proposed selling
water on an interim temporary basis out of the Ray Roberts and
Lewisville water rights. That water would be sold when it was
available as the District needed it. It would be sold for 80% of
the market price which was Dallas' wholesale raw water cost. The
contract for the treated water service had been divided into two
contracts - an interim time frame from now until the next plant was
built and from that time beyond. A document had been sent to the
UTRWD offering them an interim contract from now until the Ray
Roberts Water Plant was built with average production cost pricing.
Future options were for specific blocks of water with the price at
average price of production system with return of investment. The
UTRWD countered with a more generic contract which included an
interim phase from now until when the water plant was built with
options for additional capacity once the plant was built out of the
average system. Pricing was still an area for negotiation. The
long term portion of the contract consisted of options for future
blocks of water treatment capacity but with a guaranteed
opportunity to exercise future options. Staff had some concerns
about the long term phase of the contracts, especially the
obligations and the pricing concepts. Staff was suggesting
completing the raw water contract and the interim water contract.
The two entities then could continue to work on the long-term water
contract.
Lloyd Harrell, City Manager, stated that as the negotiating team
went through the process, there was a conclusion that the long term
contract was very complicated and that the two sides were far apart
on the arrangement. The short term option, where the City had some
excess capacity which could be made available to the District, was
close to agreement. It might be necessary with the long term
contract on whether the UTRWD became a wholesale customer, to
present the proposal to the UTRWD and have the UTRWD judge if they
wanted to become involved.
Mayor Pro Tem Hopkins was in agreement with the track staff was on
and wanted to see the contracts go back to the Public Utilities
Board for discussion and wanted to review those discussions before
she made too many comments. She was comfortable with the short
term contract.
Mayor Castleberry suggested the discussion center on the interim
contract.
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City of Denton City Council Minutes
February 25, 1992
Page 3
Nelson indicated that the raw water contract was not necessarily
short term. It would be raw water for whatever the City had for a
length of time. The District could buy it or not for $.80. One
area which staff would like tied to the contract was right of first
refusal. The District would buy the water from Denton before they
would buy it from anyone else.
Utesch stated that the District currently had a contract with the
City of Dallas for raw water. The contract took care of the
District's needs through 2010-2020. He felt that the District was
going to built its own plant and that the interim period to the
District was the period between now and the time their new plant
was completed.
Mayor Pro Tem Hopkins indicated it would be a more defined time
rather than one which would be on-going.
Utesch replied yes.
Mayor Castleberry asked about the 80%.
Nelson replied that Dallas presently charged $.47 per thousand
gallons for raw water. Eighty percent was a discount from that
figure. The idea was that the City would not be guaranteeing any
firm supply. The City would not go out and obtain new raw supplies
to be sure that there would always be water for that purpose. The
District needed to make other arrangements for their long term
needs. The City was merely selling surplus water. The City did
not want the arrangement to become a permanent situation and that
was why the price was discounted.
Council Member Trent questioned the rates.
Nelson replied that there were three components of the prices - the
raw water, the capacity cost and the variable costs. Capacity
costs were the fixed costs such as capital costs, personnel and
transmission costs. The UTRWD was suggesting a price of $.55 and
the City was suggesting a cost of $1.00 for this cost. The
variable costs included chemicals, electricity for pumping and was
approximately $.35 - $.40.
Mayor Castleberry asked if a large industry would locate in Denton,
could the City pull back from the contract.
Nelson replied the City would be able to pull back within the next
year. The District already had a contract with the City of Dallas.
Council Member Trent asked for the downside of the contract.
109'
City of Denton City Council Minutes
February 25, 1992
Page 4
Nelson replied the only downside he could see was that the City
would not be receiving full price for the water.
Mayor Castleberry asked how the raw water contract would affect the
City of Denton customers.
Nelson replied it would save them approximately 2-4%.
Consensus of the Council was to proceed with the raw water
contract.
The Council then discussed the treated short term contract.
Nelson stated that the contract would be a five or six year initial
period with a firm option for twelve months, a guaranteed minimum.
Pricing was the main concern as to whether to use a surplus
capacity or not.
Mayor Castleberry stated that if the water were sold a half price,
it would go to the Denton rate payers.
Nelson replied that it was not quite half, probably a little more
than half.
Mayor Castleberry asked if the price charged to the UTRWD would be
less than what was charged Denton citizens.
Nelson replied no that the capital costs would be substantial. The
District would be buying production costs from Denton and would
have to get their own transmission system and distribution.
Mayor Castleberry stated that he did not want to see some other
city in the District paying a lower rate than Denton residents.
Utesch stated that there would be additional costs to the District
in pipeline needed to be built to customers and wholesale to the
customers.
Council Member Perry stated that the surplus was an amount which
the City would not be able to sell to its customers.
Nelson replied yes that the City did not have enough customers at
present to sell all of its water.
Council continued discussion regarding growth potential, the
present contracts with Corinth and Lake Cities Municipal District,
a possible pipeline up I35 to Sanger.
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City of Denton City Council Minutes
February 25, 1992
Page 5
Mayor Castleberry stated that the consensus of the Council seemed
to be that the Council was interested in the raw water and treated
water contract with the possibility of exploring a pipeline up I35
towards Sanger.
4. The Council considered an appointment to the Cable T.V.
Advisory Board.
Perry motioned, Alexander seconded to appoint Richard Rodean to the
Board. On roll vote, Trent "aye", Alexander "aye", Hopkins "aye",
Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye"
Motion carried unanimously. '
5. Miscellaneous matters from the City Manager.
Lloyd Harrell, City Manager, stated that he had one item which was
a reminder for the Council to turn in their budget questionnaires.
6. The Council convened into the Executive Session to discuss
personnel/board appointments (considered appointments to the
Building Code Board and the Plumbing and Mechanical Code Board, and
consulted with the City Manager, City Attorney, and Municipal Judge
regarding goals and objectives for 1992 for the Municipal Court).
7. The Council convened in open session and took the following
action on Executive Session items:
A. Perry motioned, Alexander seconded to change the
appointment of Terry Schertz from an alternate member of the
Electrical Code Board to a regular member. On roll vote, Trent
"aye", Alexander "aye", Hopkins "aye", Smith "aye", Chew "aye",
Perry "aye", and Mayor Castleberry "aye". Motion carried
unanimously.
With no further business, the meeting was adjourned.
NNIF~R WALTERS
TY S~RETARY
CITY OF DENTON, TEXAS
BOB CAST~EBERRY, MA~O~
CITY OF DENTON, ~S ~
ACC0004A