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Minutes April 13, 1993 'CITY OF DENTON CITY COUNCIL MINUTES April 13, 1993 The Council convened into a Special Call Session at 5:15 p.m. the Civil Defense Room of City Hall. PRESENT: Mayor Castleberry; Council Members Brock, Chew, Smith and Miller. ABSENT: Mayor Pro Tem Hopkins in Perry, 1. The Council convened into the Executive Session to discuss the following: A. Legal Matters 1. Considered Goldfields' claim. B. Real Estate C. Personnel/Board Appointments 2. The Council received a report and held a discussion regarding jurisdiction of juveniles charged with Penal Code and other State statute offenses and gave staff direction. Sandra White, Municipal Judge, stated that the issue was whether cases could be transferred from Criminal Court to Juvenile Court even though the juvenile may not have had any convictions in a Municipal Court and, if those cases could be transferred, what would happen from there. The Legal Department felt that the cases could be transferred and that there might be some procedures which needed to be used to undertake the actual transfer. Once that was accomplished, did the Juvenile Court have jurisdiction or could they send the cases back to the Municipal Court. White presented the Council with three handouts regarding the issue which was included in the agenda back-up. The cases which White was referring to did not deal with any traffic cases as those cases could not be transferred nor could municipal ordinance violations. The offense dealing with public intoxication required those cases to be dealt with in Juvenile Court if the violator was younger than 17 years old. Council Member Miller asked what other cities in Denton County were doing. White replied that she was not sure what others were doing. Judge Whitten, County Court at Law #1, stated that other cities in Denton County were handling their own juvenile cases. 343 city of Denton'City Council Minutes April 13, 1993 Page 2 Peggy Fox, Chief Juvenile Probation Officer, stated that other cities were dealing with first time Class C offenders by working with counseling programs or a teen court to be dealt with by their peers. If the case went to Juvenile Court, there tended to be repeated violations whereas if the cases were handled in Municipal Court there tended to not be repeated violations. Whitten stated that there was a section of the law which indicated that the Municipal Court may transfer cases but it was the presumption of the law to handle the cases in the least restrictive way which was in Municipal Court. The ramifications for cases in Juvenile Court and the punishment could get very serious. Teen Courts currently in session operated for approximately $200 per year so that it was not a great cost to operate a teen court. There could be serious problems to transfer cases to a higher court. Mayor Castleberry asked if the question was jurisdiction of the cases. White replied that that was the broad issue. Mayor Castleberry' asked what was needed to be decide by the Council. White replied that the reason the item was on the agenda was that in 1991 the Council took the position that if the law allowed the City to waive its jurisdiction and send the cases to the Juvenile Court, that should be done. She wanted to know if the Council wanted to continue that practice. Council Member Miller questioned if Council should look at the total system and find out what was best for the juvenile offender, for the family and for the City. If it were just an issue of jurisdiction, the issue seemed simple. He felt that the issue was to give direction to staff to look at and study the whole issue in terms of doing a procedure which would be jurisdictionally correct and was best for the offender and the costs involved. Council Member Perry asked how many municipal courts in Denton County handled their juveniles. Whitten replied that all do of the courts did which was the presumption that Municipal Courts would handle Class C cases. Council Member Chew asked for more information regarding a teen court. 344 City of DentonCity Council Minutes April 13, 1993 Page 3 Whitten replied that a case would go to Municipal Court, be pleaded guilty or no contest and then be referred to a teen court to determine what sentence would be dealt the offender. That court could be done with volunteers and did not have to be part of the City. Council Member Chew suggested that the City might want to look into the possibility of a teen court. Council Member Brock stated that she had seen information from Odessa regarding their teen court. Their court had a paid employee to run the program. She suggested exploring all of the ramifications of such a program. Whitten replied that it did not have to be a great expensive project. The Lewisville program was an excellent program and was not funded by City to a great extent. That teen court had approximately an 80% success rate. Council Member Perry asked if the Lewisville procedure began in Municipal Court and was referred to teen court. Whitten replied that that was one way to go. When the police arrested a child, they had the option to directly refer the case to the Lewisville teen court. Council Member Perry asked if the Juvenile Court could take these cases. Whitten replied that the court was permitted to take the cases but she was reluctant to do so unless there were unusual circumstances. There were case laws which permitted the record of a young person to be used against him until his 23rd birthday. Each conviction increased the possibility of possible liability for additional future punishment. There were some cases now which allowed prosecutors to increase the punishment as a child got into trouble again. Council Member Perry asked if that were not the same procedure f~ Municipal Court. Whitten replied that she did not know if the prosecutors would want to do that with Municipal Court. A case handled in Juvenile Court might look more serious on paper than it actually was. Mayor Castleberry stated that the jurisdiction issue should be settled and then look at other possibilities. 3 4 '5 City of Denton'City Council Minutes April 13, 1993 Page 4 White stated that she was not in disagreement with Whitten regarding the philosophy that the law allowed the Municipal Court to waive the jurisdiction and send cases to Juvenile Court. White felt that Whitten thought there might be a better way to handle the cases. Whitten stated that the jurisdiction was set by law. She stated that the Municipal Court should accept the responsibility to accept the jurisdiction. Mayor Castleberry stated that he thought there was some disagreement of which court had jurisdiction of these cases. White replied that she did not know if it was settled in terms of public intoxication cases. Whitten stated that she wanted the DWI and PI cases. White stated that the procedure for a first time offender was that the police would file the case in Municipal Court, the Municipal Court would waive the case to Juvenile Court. Judge Whitten would decide to take the case or not take the case. The original position of Council was to send all juvenile cases to Juvenile Court and not pick and chose cases. Whitten felt that there might be a need to do a due process hearing on a case by case basis. Based on that hearing, it would be determined which court would handle the case. Mayor Castleberry asked if the law allow that process. Whitten and White both replied yes. Council Member Miller asked if all cases were now being sent to Juvenile Court or were they not being handled at all. Whitten replied that they were not being handled at all. White replied that originally the cases were going through the Diversion Program but that that had ceased to happen. Council Member Miller stated that he felt Council should begin working on jurisdiction so that some cases could be handled in the system and then differentiate those cases from ones which must go White replied that once the cases were given to Municipal Court, the Court must begin to set up a docket to handle the cases. If the City did not waive jurisdiction, there must be a court 346 City of Denton'City Council Minutes April 13, 1993 Page 5 mechanism set up to begin to handle those cases. There were constraints to do such a docket at this time and the personnel to do such cases. Mayor Castleberry asked if there was any disagreement about jurisdiction of these cases. Whitten replied that the jurisdiction was set by law. The Family Code suggested going toward the least restrictive program to handle these cases. As far as the paper work involved, these cases could be handled like adult cases but kept separate. Council Member Miller stated that these cases were not currently being handled. He asked what would happen if 10 cases were filed today. White replied that no one handled those cases at this time but that the City had original jurisdiction. Council Member Chew felt that part of the problem was with the Council's decision of October 1991 and Council now needed to decide whether to rescind that waiver. Mayor Castleberry suggested that Council was requesting to return the issue to staff and have staff do a report with possible recommendations. Council Member Chew felt that a discussion would be needed to determine what needs had to be addressed along with possible budget items. Council Member Miller felt that staff needed to explore the possibilities as expediently as possible for jurisdiction and what was best for the City and for the juveniles. He suggested looking at alternatives such as teen court and perhaps go in a different direction than what was being done now. Council Member Perry stated that Judge Whitten would take the PI and DWI cases. Whitten replied that was correct. One of the problems was that cases were not currently being filed and she wanted to handle the cases which were appropriate to handle. Carl Williams presented information from the Texas Youth Commission which was included in the agenda back-up. He was concerned with the policies set up by the DISD regarding their discipline program. He was concerned that there were still questions remaining 347 City of. Denton city Council Minutes April 13,' 1993 Page ~ with cases not the suggestion needed to know would be paid. regarding the policy. He felt that the city needed to be more aware of how the policy would be handled and recommended that the City look very closely before it became involved in this program. Mayor Castleberry felt that the consensus of the Council was to ask staff to look at various avenues to solve the problem. Council Member Brock felt that something needed to be done to deal being handled. The issue needed to be settled. If was to rescind the earlier ordinance, then Council how to do that, how much that would cost, and how it Council Member Perry stated that it needed to be determined which cases to waive and the conditions to waive to Juvenile Court. White stated with the School District situation if the Police Department went to a school and issued a ticket or arrested a juvenile and decided to file the case, the Municipal Court did not have authority to not file the case in Municipal Court. If a juvenile were charged at a school with an offense, the case would go to Municipal Court regardless of whether, after review, it was felt that the casewould be better handled in Juvenile Court. Any case which was a Class C misdemeanor would first be filed in Municipal Court. Previously all cases were being transferred out of Municipal Court to Juvenile Court. Council Member Miller suggested directing staff to prepare an ordinance to rescind the action to waive all jurisdiction to allow Municipal Court to determine whether to keep a case or Send it on to Juvenile Court. That procedure would have implications such as cost, time, procedure, and equipment to consider. Those implications would suggest what could be done and beyond that start immediately and expand in a proactive way such as teen court and counseling. Council Member Smith suggested that there be communication between the Police Department and the judges to determine the DISD policy. City Manager Harrell stated that chief Jez had been invited to go with a task force from the DISD to view a school which had this type of policy in effect, chief Jez attended that visit but after that there was no further communication from the DISD until the city was informed, after the fact, that the policy had been adopted. This was an issue which would probably fall back on the Council and School Board. If the Council was not interested in enforcing the policy, it could direct the City Manager to inform chief Jez to not respond to DISD requests. This was a question 348 City of Denton'City Council Minutes April 13, 1993 Page 7 which needed to determine policy. There had been no commitment from Chief Jez on handling those kinds of cases. The Council needed to determine how it would handle the DISD policy. Whitten stated that some Denton officers had approached her about the fact that the Class C misdemeanors were not being handled. The officers were frustrated and concerned about such cases in the City. Mayor Castleberry felt that the consensus of the Council was to move ahead as quickly as possible and to have staff work on the details dealing with juveniles in Municipal Court. White agreed with Council Member Miller's suggestions that the Council first needed to decide whether to rescind its previous directive regarding the handling of juveniles plus the immediate problem of not filing cases. The next step would be to determine long-term issues such as teen court. JudgeWhitten suggested that the Council might want some statistics on the number of cases involved. Consensus of the Council was to include the item on the next work session and then possibly a formal agenda item. 3. The Council received a report and held a discussion regarding an update on the State's progress with the Hartfelt Humane Society and gave staff direction. City Manager Harrell stated that this item would be placed on the Council's agenda for the next few meetings in order to provide Council with an update on the situation at Hartfelt Humane Society. Catherine Tuck, Administrative Assistant, stated that since the last Council meeting several events had occurred. Animal Control Officers, several times a day on a daily basis, were going past the facility, to do a drive-by inspection. The officers were keeping track of the type of animals seen and if there were any kind of activity that could be seen from the outside of the facility. To date, the same three dogs had been seen on the property. Hartfelt was an animal shelter and also a training/grooming facility. It was hard to distinguish why an animal was at the facility from the outside as it could be there for adoption or for other purposes. Jerry Drake, Assistant City Attorney, was in close contact with the attorney for the Texas Department of Health and had begun weekly correspondence with that Department. He had also drafted a letter expressing the City's concern and asked to be kept apprised of the situation. 349 city of Denton'City Council Minutes April 13, 1993 Page 8 Nonie Kull, Environmental Health Services Manager, had been in contact on a veteranrian level, with the Texas Department of Health. Kull explained the Council's concerns and the public's concerns and requested that the Department continue enforcement activities and keep the City informed as well. The Department had been at the shelter once since the initial inspection. During the second inspection, an adoption was taking place which resulted in a more forceful action from the Department regarding noncompliance. The Department had indicated that it would continue to enforce the State statute and might ask the City for assistance. Tuck suggested that the City staff be a focal point for the gathering of evidence which would be sent on to the Department of Health. Council Member Brock stated that members of the Humane Society had been in touch with the Department's vetenary staff and had several calls regarding the facility. Council Member Smith questioned a letter sent to Hartfelt regarding discharge from the facility into a nearby creek. Was the 20 day waiting period according to City ordinance. Tuck replied that the letter referred to a section of the city code which required a 20 day time period. Council Member Miller stated that he had a problem with a 20 day time period to wait for abatement. There must be something else which could be done especially in the case of a contaminant being discharged into a creek. City Manager Harrell stated that staff could investigate whether it would be possible to amend the city ordinance or if a State statute was involved. Council Member Miller stated that there needed to be a differentiation between a nuisance and an immediate health problem. City Manager Harrell stated that the ordinance set up an administrative appeal process which an individual could use to refute an allegation against him. There was a due process framework involved. Council Member Miller stated that within that framework there must be procedures which the City could do regarding the discharge. Tuck stated that this case was similar to a building inspection case. There were certain times when the City had the right to inspect a building. If there was a complaint that a building was substandard, there needed to be evidence to go in and inspect the 35O City of Denton'City Council Minutes April 13, 1993 Page 9 building. Hartfelt had ordered the Animal Control staff off their property and could have them arrested if they returned. There needed to be evidence and an affidavit of probable cause to get a search warrant to go into the facility. Debra Drayovitch, City Attorney, stated that the provision in the ordinance stated that the City may enter where authorized by law. There were only narrow exceptions where police officers or animal control officers could enter property without the owner's consent. Restaurants were open to the public so access was easier. Council Member Miller felt that there should be a similar type of ordinance for this type of case. If a search warrant was needed, then the City needed to get such and follow through with the process. City Manager Harrell stated that the City's position to date was that there was a State statute and that statute gave authority to a State agency the responsibility to enforce that statute. Staff would work diligently with the State agency to collect evidence, help to monitor the situation and make sure that the State followed through with the statute. Council Member Miller felt that with a more serious violation, there needed to be more aggressive and pointed action. If there were no city ordinance regarding contaminants going into a stream and there existed a condition similar to the one alleged at Hartfelt, would not the City want to take more action than merely following through with State procedures. The current ordinance had references to private citizens and other situations but nothing to deal with a situation which involved State regulations. Mayor Castleberry asked if the letter from the State to Hartfelt indicated that Hartfelt could no longer operate as a shelter until it was in compliance. Tuck replied correct. Mayor Castleberry stated that the facility should be closed and that City people could not go on the premise. Could it be determined if the facility was still operating as a shelter. Kull stated that she had no indication that the facility was operating as a shelter. There was activity there but the animals on site could be the personal property of the owner of the property. Those particular animals had been seen at the owner's residence. 351 City of Denton'City Council Minutes April 13, 1993 Page 10 Mayor Castleberry asked if grooming activities could be done. Kull replied that Hartfelt could not operate in regards to sheltering stray and unwanted animals. Mayor Castleberry stated that dog grooming could be done. Kull replied correct. Council Member Brock asked if there was an adoption after the shelter was to have been closed. Tuck replied that the State letter indicated that an animal was adopted after the first inspection had been done. Council Member Perry asked if hook worms were a concern from the discharge in the creek. Kull replied that it might be a possibility but not a strong probability. Tuck presented Council with a handout from Kull regarding the condition of the dogs from Hartfelt. Mayor Castleberry asked if the City could ask the State to make another inspection. city Manager Harrell replied yes and that the City had been encouraging the State to make those inspections. If the. City could not get sufficient response from the appropriate appointed officials, it might be necessary to contact the appropriate legislators to get the inspections done. Mayor Castleberry asked if the City could go to the State and indicate that it was suspected that the Shelter was still in operation. Tuck replied that that could be requested. Council Member Miller expressed a concern to prevent this situation in the future. He suggested studying Chapter 6 of the Code to determine if such a situation could be prevented from occurring again. City Attorney Drayovitch replied that staff could look at areas where the city was not preempted by the State and prepare more regulations for the Council's consideration. 352 City of Denton'City Council Minutes April 13, 1993 Page 11 Mayor Castleberry asked if Council would like staff to contact the State Health Department and ask for the quickest possible reinspection of the Hartfelt facility. City Manager Harrell suggested that Council might direct the Mayor on behalf of the Council to make contact and formalize that request. Perry motioned, Chew seconded to authorize the Mayor to communicate with the State Department regarding this issue. On roll vote, Brock "aye", Miller "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. Council Member Smith asked staff to review the current ordinances regarding animals and the discharge of containments into water. 4. The Council received a report and held a discussion regarding alternatives to the ad-valorem tax and gave staff direction. John McGrane, Executive Director for Finance, stated that at the last Council planning session, a brief presentation had been made regarding the problems associated with the ad valorem tax. The ad valorem tax had two uses of the revenue which was received. One use was to pay the debt service on general obligation bonds, certificates of obligation and contractual obligations. As discussed at the planning session, a general rule of thumb was a one-third percentage to debt service and a two-thirds percentage to operations and maintenance. The other use was for the general fund operations and maintenance budget. This was approximately one- third of general fund revenues which was a large portion of the fund. The only way for the tax to grow was for new development or an expansion of the market value of property. A problem with the ad valorem taxes was the effect of tax exempt properties on the tax roll. Denton had a considerable amount of tax exempt property within its corporation limits which took away from property being added to the tax roll. The presence of those institutions still required services to be provided to those areas. A final area where ad valorem taxes, as a primary general fund base, caused problems was in the area of comDetition for tax dollars. The City currently competed for ad valorem property tax with the County and the School District. City Manager Harrell stated that Lewisville had a population approximately two-thirds the size of Denton. To get the same amount of revenue in proportion to the assessed value, Lewisville's tax rate should be approximately $.47. McGrane's chart and other back-up materials illustrated why Denton was at such a disadvantage by relying heavily on property tax due to the kind of community it 35':3 City of Denton'City Council Minutes April 13, 1993 Page 12 was. Denton's tax rate was high because it had a low assessed valuation compared to other cities of the same size. Council Member Perry indicated that limitations of non-profit organizations had been noted which indicated a negative cast. He also saw a positive cast to those organizations. McGrane replied that the limitations were as they applied to the ad valorem tax. There were other offsets in the areas of revenue which would be an asset in those cases. Those institutions which were tax exempt would help contribute toward the financing of basic services through payroll tax dollars. The limitations of those institutions were only in regards to the ad valorem tax. There was a need to look at alternative revenue sources which took those limitations and made them assets. In order to be fiscally responsive to the changing environments, alternative revenue sources needed to be explored. One alternative was the sales tax. The State Legislature was looking at a possible amendment to the state tax code which would allow Denton to vote on increasing its sales tax percentage in one-eighth increments up to a maximum of one-half of one percent. This would allow those areas that were tax exempt to help contribute toward the financing of basic services. Council Member Miller asked what the ad valorem tax would bring in for this year. McGrane replied approximately $13.1-13.2 million which was a combination of the debt service and the operation and maintenance. The general fund side was approximately $8.9 million. Council Member Miller asked if $3 million were received through a sales tax and reduced property tax in the same amount, the tax would be reduced approximately 20-25%. McGrane replied that it would be estimated at $.12-$.16 on the basis of $.71. Council Member Perry asked for the advantages of levying a sales tax and decreasing ad valorem tax to the same amount as far as gaining revenue. McGrane replied that it would not be a revenue gainer. None of these alternatives would be revenue gainers. The first concern was of using one third of the ad valorem tax into the base of the general fund. When that base was reduced, taxes had to be increased in order to keep even. With a sales tax, the base was spread out so that it was more reliable over time and did not have 354 City of Denton'City Council Minutes April 13, 1993 Page 13 fluctuations in the rate. City Manager Harrell stated that the half cent sales tax legislation indicated that if a city voted in the extra half cent sales tax, it had to lower property tax with a like decrease. Because of the nature of the make-up of Denton, a sales tax increase would spread the available revenue throughout the community and not rely so heavily on ad valorem taxes. There would be a shift from the property tax to other sources. For industrial development purposes, new industries focused on property taxes. Denton would always have a large property tax rate unless other sources of revenue could take the place of the property tax. Council Member Miller stated that he was a supporter of the universities, but in the tax revenue situation, the half cent sales tax would not bash universities, but enhance the city. The universities were a liability in regards to ad valorem tax rates. McGrane stated that another alternative to the ad valorem tax was impact fees. These fees were assessed on properties based on the additional costs of service a particular development had on the City. It would shift the burden of paying for increased service levels based on the increments of ~hose new properties. Council Member Brock stated that several years ago there had been a committee which looked into the possibility of formulating and instituting impact fees. The Legislature passed a law which made it extremely difficult to assess an impact fee. The Committee concluded that it would be almost impossible to pass such a fee. City Manager Harrell replied that the law had been clarified since that time. The vast majority of cities in the area now had impact fees. Council Member Brock stated that at this time an impact fee would not have a large impact on the City. This was not a short term solution at this time. City Manager Harrell replied that it would be another tool to h~lp on an increment basis. It would not help immediately but if it were on the books, it would be easier to institute. McGrane stated that the next alternative was user fees which centered on the premise of those who use the service pay for the service. The concept was that the revenue received from the fees either totally or substantially paid for the cost of the service provided. Types of services in the alternative might include ambulance fees or restaurant inspection fees. It was recommended 355 City of Denton'City Council Minutes April 13,- 1993 Page 14 that if this type of fee were to be considered, a comprehensive revenue fee study be done in order to determine the actual cost of service. A Storm Water Utility might be another mechanism to take some of the cost from the ad valorem tax and move that to another area which would hold or decrease the ad valorem tax. Park dedication fees, an additional alternative, would utilize fees from the broad general tax base and apportion them to specific areas which were tied to various developments. A park dedication fee would require mandatory cash contributions and/or land dedication of park and recreation facilities. Currently the City had a voluntary program and Council might want to discuss whether to make such a program mandatory. city Manager Harrell stated that several years ago the City implemented a voluntary program for developers to encourage them to make a dedication of park land. There had not been much development since that program was instituted but with the development which had happened, the program was not working. Most cities had a park dedication fee. Denton dealt with parks only from property taxes. McGrane stated that the last alternative was special districts/ special assessments which were a means of creating districts that generated revenue to pay for specific purposes. City Manager Harrell asked the Council if they were interested in going forward with any of these suggestions. Council Member Miller stated that he was interested in pursuing the investigation of these options and asked for more information in order to facilitate better planning. Consensus of the Council was to investigate all the options for further study. 5. The Council received a report and held a discussion regarding auditing the G.T.E. franchise agreement and gave staff direction. John McGrane, Executive Director for Finance, stated that the City had franchise agreements with the major utilities and some smaller utilities for the use of City right-of-ways for utility lines. The GTE franchise started in the 1940's and was established for a 20 year time period. From the 1940's though the 1980's telephone billing was a very simple process with local service and long distance service. The accounting for the billing was very simple and most of the agreements were based on that simple billing process. The City's agreement with GTE stipulated a billing of 2% of the annual gross receipts for local exchange transmission 356 City of Denton'C&ty Council Minutes April 13, 1993 Page 15 service. The 1983 agreement was approved for 20 years and could only be changed by mutual agreement between the two parties. An audit of the franchise noted an error in the formula for determining the percentage. The formula only addressed what GTE considered to be the gross receipts for local exchange transmission services. With the breakup of the Bell system, revenues were accounted for in various other codes and the audit verified that certain customer codings were not included in the base calculation of the formula. As a result of the audit, GTE changed its base to reflect the proper allocation and there was no indication that the formula was not being allocated correctly. The City of Garland had sued GTE on what should be included in gross receipt revenues. If the City desired to review the franchise agreement and/or the receipts from the enforcement of that agreement, four types of action could be taken. (1) Do nothing and collect 2% under the revenues that GTE indicated. (2) Send out for request for proposals to audit the books to determine if the formula was correctly being applied and how much potential revenue GTE not paying. (3) Look at joining in the legal process with Garland and have a lawfirm represent the City in order for the courts to determine what the definition of gross receipts for local transmission service should be. (4) Discuss the situation with GTE and try to redefine the franchise agreement. There was a preliminary indication that GTE might be willing to look at the agreement and may be developing some type of proposal. Council Member Miller asked if GTE considered such services as service repair, directory assistance, and operator assisted calls as non-local services. McGrane replied that those services were not used for the transmission of local service. GTE's basic argument was that they were paying for the use of right-of-way for their lines and that those services were not included in the service for local transmission of calls. Council Member Miller asked if the main area of dispute was what was included in the base. McGrane replied that there were two areas of dispute. One was if the base was being reported correctly and the second was what was in the base. He suggested if the agreement were amended that it clearly define what was included in gross revenue, whether to go from a point forward or go back and to limit the number of years for the agreement due to rapid changes in technology. 357 City of Denton'City Council Minutes April 13, 1993 Page 16 Council Member Miller stated that the current agreement would go to the year 2003. GTE had not voluntarily agreed to review and amend the agreement. With the remaining 10 years of the agreement, there was a dispute as to what was included in the base. McGrane indicated that the inclusion of the phrase "for the rendition of local exchange telephone transmission service" was included in second franchise. Council Member Miller asked if there was a basic difference with GTE at this time. McGrane replied yes in the definition of what was to be included in the gross receipts. Council Member Miller asked if the City asked for an audit, would it be reasonable to see how much the amount would be and then go on from there. McGrane replied that after an audit it would be necessary to determine if the City would want to go back retroactively or mutually agree to go forward from a certain point. He asked for direction on whether the Council wanted him to contact GTE to see if they would be willing to amend the agreement. If not, did the Council want a request for proposal for an audit or for legal services. Or did the Council wish to not pursue the matter. Council Member Miller suggested talking with GTE to possibly make changes. McGrane stated that that was done in 1988 and GTE did not agreed to do so. Consensus of the Council was to have preliminary discussions with GTE to determine if they would be agreeable to make changes in the franchise. A report would be made to Council and Council would then make a decision on how to proceed. 6. The Council received a report and held a discussion regarding a storm water utility and gave staff direction. City Manager Harrell stated that approximately 9 months ago, Council received a citizen committee report regarding this subject. After intensive study, the Committee's recommendation was that the City should move ahead and form a storm water utility system in preparation for new EPA mandates. Council held a formal public hearing concerning the ordinance to establish a storm water utility system and at that meeting voted to table the ordinance creating 358 City of Denton 'City Council Minutes April 13, 1993 Page 17 the utility and gave staff direction to bring the matter back to work sessions for further discussion. Council held several meetings regarding the issue. Out of those meeting, staff interpreted that Council consensus was to ask staff to produce specific information regarding any remaining questions. Out of those meetings, there was a sense that some time in the future the City would probably need to establish a storm water utility. It appeared that the City would come under the EPA regulations on October 1, 1994. When the utility was established, there would be certain guiding principles that the City would take note of which would guild future councils as they moved to implementation. Staff would like to respond to any further Council questions and have Council look at the draft resolution which was prepared in order to formally consider it at a future meeting. Bob Nelson, Executive Director for Utilities, stated that there were three or four remaining questions the Council had regarding this issue. (1) What kind of major projects were anticipated in the storm water drainage area. Two different documents were included in the back-up regarding those projects. One was a list of approved storm water/drainage projects that the Planning and Zoning Commission and the Council had approved to be included as part of the capital improvement program. The second part of that list included projects in the planning process at the present time and operation and maintenance equipment which were being looked at as part of the operation budget. The second document was a list of projects of current needs. (2) What type of improvements could be made in the central part of the city with channel improvements and possibly narrow the flood plains. (3) Comparison of rates was another Council question. Staff had looked at many different options such as what was presently collected from the residential customer group, what would be collected out of that group if a $1.25 fee were charged with different alternatives for varying amounts. Jerry Clark, Director of Engineering and Transportation, presented proposed CIP projects, the list of which was included in the agenda back-up. Operation and maintenance enhancements were included in the list of projects. City Manager Harrell stated that none of the projects on the list were funded projects and no bond money had been approved. Any projects needed to be done from the property tax dollars would compete with other projects. Council Member Brock asked if the estimated $800,000 per year would take care of the debt retirement. 359 City of Denton City Council Minutes April 13, 1993 Page 18 City Manager Harrell replied that that was part of the debate. If all of the current $800,000 worth of expenditures were picked up, the answer would be no. It would have to be higher than that to take on some of the above projects. If the current debt were left on the property tax side and enough fees were generated to reach the $800,000 level, there would be enough bond capacity to fund the projects at the $1.50 level. Council Member Chew left the meeting. Clark presented a detailed list of needs which were included in the agenda back-up materials. Those indicated needs in the community which in the long term would provide a good drainage system. There was a lot of land which was being affected by poor drainage and possible flooding and a good drainage system would help solve some of those problems. Lee Allison, Director of Water Engineering and Operations, presented a comparison regarding fees vs. tax comparison by rate class which was included in the agenda back-up materials. The residential fee needed to provide $800,000 for a storm water utility would be $1.50 per unit and $14.92 per imperious acre for commercial activities. He also presented a comparison of $400,000 out of fees and $400,000 out of taxes. Fees for $400,000 would be $.75 for a residential unit and $7.46 for imperious acre for commercial activities. He presented various graphs detailing the comparison of the effect of a fee on various businesses. City Manager Harrell stated asked if the resolution captured the guiding principles as requested by Council and asked for direction on how to proceed. The options were to put the resolution and ordinance back on agenda for the April 27th or the May 4th meeting or take some other action from Council. Council Member Perry stated that it was difficult to decide on the resolution before it was settled on any type of solutions. He felt it would be better to decide the question of implementation prior to making the decision to have a storm water utility. It was part of the decision making process. Policy issues should be discussed before the Council had decided to have storm water utility. He would rather take time to do the policy decisions now. Mayor Castleberry felt that the resolution would help further the utility along in the process but that Council would not be locked into it at that point. council Member Miller stated that when the Council dealt with the rate structure, there would be public hearings and if the Council 360 City of Denton 'City Council Minutes April 13, 1993 Page 19 had not decided on establishing a storm water utility, it would be difficult to direct staff on how to proceed. The resolution put the Council on record as to which direction to go. As long as the City was dealing with ad valorem taxes in this area, it would not be doing a complete job. Council Member Perry stated that it was hard for him to make such a decision without the facts in advance. Council Member Miller felt that the Council should proceed with the resolution. Mayor Castleberry stated that he was ready to move ahead with the project. Council Member Brock stated that one of the advantages to making the decision to establish the utility was that there would be a framework to begin discussions and provided the need for other details. The resolution would get the Council to a position to where the Council could proceed with a detailed study and public hearings. Council Member Smith expressed a concern that the fees would not be used for what the public had perceived which would be for the new EPA mandates. If the fees were used for drainage projects instead of EPA projects, she would have a problem. Council Member Perry stated that the EPA mandates would not be required until 1994. There was a plan currently in operation with funding for that plan. He felt there was plenty of time to consider the policy issues involved and to have all in place before approval was given. Council Member Miller felt that if the drainage issues were placed in the regular CIP with all the other projects, the City would not be in good shape for drainage and flood control. The storm water utility represented the vehicle to proceed with those types of projects. After public hearings were held, the Council might decide not to proceed. The resolution and ordinance would force the Council and the citizens to zero in on drainage problems. The EPA requirements were important but there were many other issues involved in the process. Council Member Smith stated that the Council and staff would need to help the public understand the change in the needs and an education process was needed. 361 City of Denton'City Council Minutes April 13, 1993 Page 20 Mayor Castleberry asked if the Council would like to put the resolution and ordinance on the 27th city Council agenda so that all members could consider the items. Brock motioned, Miller seconded to place the resolution and ordinance regarding the storm water utility on the City Council agenda for April 27th. On roll vote, Brock "aye", Miller "aye", Smith "aye", Perry "nay", and Mayor Castleberry "aye". Motion carried with a 4-1 vote. city Manager Harrell stated that there had been one public hearing on the ordinance and did the Council want another public hearing regarding the matter. Consensus of the Council was to proceed with a public hearing on the items. 7. The Council received a report and held a discussion regarding Community Development Block Grant priorities and gave staff direction. Lloyd Harrell, City Manager, stated that at the Council's mid-year planning session, the Council had discussed the Community Development Block Grant program. Specifically, a concern was expressed regarding the amount of money in the program which was rising dramatically over the past year and the good possibility of the city receiving HOME dollars which would provide more money for housing rehabilitation. This was one of the few areas in which the Council could have some policy discretionary authority. Based on that, Council had asked staff to look at the current policy and make suggestions on how to incorporate the Council into the decision making process regarding Block Grant funding. Staff had proposed a policy which gave Council more input but would not diminish the role of Committee. The two changes in the process included (1) schedule with Council briefings about eligible Community Block Grant projects and have Council do a priority ranking of expenditures of block grant money. These would be general directions for staff and the Committee. (2) Currently all City departments submitted their proposed projects independently for Block Grant money. A proposed change was to have internal rankings done by the administrative staff and give all the projects to the Committee. After that, the process would proceed as it currently did. These revisions would involve the Council more in the decision making process. These proposals had not been discussed with the Block Grant Committee but if Council was comfortable with the procedure, staff would proceed with the process. 362 City of Denton 'City Council Minutes April 13, 1993 Page 21 Barbara Ross, Community Development Administrator, stated that the current priorities were set by Council several years ago and the idea of Council setting priorities yearly kept the Committee current with the Council's wishes. Council Member Brock asked if the Council would establish a set of guidelines for the Committee. Ross replied correct. Council Member Miller asked how that would tie in with the rankings from the administrative staff. City Manager Harrell stated that it would be a combination of both. The Council would give the general guidelines and as part of the process, the Council could suggest specific guidelines to be included. The staff recommendations would be on an equal footing with other recommendations. Council Member Miller asked if the Committee was aware that the Council was suggesting a change. Ross replied that the Chair of the Committee was aware but the whole Committee was not. Council Member Miller suggested taking the proposals back to the Committee so that it was aware of the proposed changes. Council Member Smith stated that her question also related to the Committee and she agreed with Council Member Miller that the proposals should be reviewed by the Committee before they were implemented. Council Member Brock asked if the Council had ever not followed the CDBG Committee recommendations. Ross replied that the Council had always followed the Committee recommendations but not always the Human Resources Committee recommendations. CDBG Consensus of the Council was to take the proposed recommendations to the CDBG Committee. Ross asked if the CDBG Committee supported the proposed changes, did the Council want to discuss them again or implement the changes in 1994. 363 City of. Denton 'City Council Minutes April 13-, 1993 Page 22 Consensus of COuncil was that if the Committee agreed with the changes, they would be implemented in 1994. 8. The Council received a report and held a discussion regarding the Vision for Denton - 21st Century project and gave staff direction. City Manager Harrell stated that visits were being made to the seven agencies which had been identified as sponsor groups for the project. A visit had been made to the Chamber of Commerce and a presentation made to the combined Board of Directors and the Economic Development Committee. The Economic Development Committee had recommended approval by the Chamber. A commitment was needed from the City to be a sponsor for the project and a decision on which Council Members would be on the Committee. The Mayor would be the chairman of the project and the City Manager would be the project manager. Council needed to discuss where a vision room would be located which would be a communication room where groups could meet and where projects could be displayed. The Planning Committee felt it should be in a city facility if one might be available. The final consideration was the city's contribution as far as the budget was concerned for the project. Council Member Perry suggested using the term "communication center" for the project rather than a "vision room". He expressed a concern regarding the formation of a cabinet which would have a monitoring overview function of the Council. The impact of that cabinet was noted throughout the document presented to Council. He felt that Council was not in a position to authorize a group to have a monitoring function of the activities of the Council. That was not acceptable to him and he felt it was not in the Council's authority to do so. Council Member Miller replied that the cabinet would not monitor the Council but would rather monitor the progress of the project. The sponsoring agencies would have representatives on the Cabinet who would help keep the project on track. There would be a reporting process to keep the project moving and to suggest ways to keep working on the project. Council Member Perry replied that the cabinet would be the overall policy making group for project. The Council was one of the main agencies of the project. The cabinet would be the policy making group which would determine policy with respect to the visioning project for the City Council. Perry listed other responsibilities for which the cabinet would be responsible. 364 City of Denton City Council Minutes April 13, 1993 Page 23 Council discussed the role of the cabinet in relation to the City Council. Council Member Brock stated that one of the goals at the Council's planning session was strategic long-range planning. Strategic planning was thought of as a five to seven planning period and was not as long ranging as Council felt was needed. Council Member Perry stated that he was excited about project but was concerned about control of the project. There would be fourteen individuals in control of the project. He was expressing his concern about the project and the control of the project. It was apparent to him that there would be difficulties with the control of the project. Perhaps if there was a constitutional base to move from, he might be able to deal with it. Consensus of the Council was to move ahead on the implementation of the project. Council Member. Smith asked for a cost estimate for the project. City Manager Harrell stated that the item would be on the April 27th agenda and would detail commitment levels. 9. Miscellaneous matters from the City Manager. A. John McGrane, Executive Director for Finance, stated that he had been working with First Southwest, the City's financial advisor, regarding the possibility of refunding some of the City's existing debt on both the revenue side and the general obligation side. Three basic rates would need to be watched on the revenue side - the long bond treasuries, the revenue bond municipal rate, and the taxable rate. There was a potential of doing an advanced refund on a taxable issue. It would save a lot of money for the City to do a taxable refunding. Normally this would be done with a competitive bid sale which was a cumbersome process taking at least 45-60 days to completed. Because of the fluctuations of the rate and because of the complexity of the issue, staff was recommending a negotiated sale. An interpretation from bond counsel gave approval to do a negotiated sale. The City would work with an underwriter to negotiate a certain sale date and negotiate a rate. Once the Council decided to go ahead with the project, they would need to move quickly. Staff was anticipating a potential savings with the general obligations in the $1 million range and a savings on the revenue side of approximately $2-3.5 million. The City's financial advisor and bond counsel had been involved in the discussions. 3 6'5 city of Denton 'City Council Minutes April 13,-1993 Page 24 B. Harrell stated that the Council committee assigned to assist with the planning for the Council's planning session had recommended Bob Saunders as a facilitator, to hold the session on June 25-26 and recommended the DFW Airport Hilton. The format would be similar as in the past with staff Presentations and one day with Council and immediate staff. He would work with Saunders on related topics for Council. Consensus of Council to proceed with the schedule. 10. New Business The following items of New Business were suggested by Council Members for future agendas: A. Council Member Brock asked about an ordinance dealing with public gatherings. There was a problem in southeast Denton on a particular cul-de-sac where individuals gathered on the street and held a party. Technically they were not on private property but rather in the street. She asked about a possible ordinance to solve such a situation. B. Council Member Brock asked about an ordinance dealing with noise coming from automobile radios, etc. C. Mayor Castleberry announced that the face on the "Welcome to Denton" sign had been installed during the week. With no further business,the meeting was adjourned at 10:56 p.m. ~TY OF DENTON, TEXAS CITY OF DENTON, T ACC000FF