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Minutes July 5, 1994 CITY OF DENTON CITY COUNCIL MINUTES July 5, 1994 The Council convened into the Executive Session on Tuesday, July 5, 1994 at 5:15 p.m. in the Civil Defense Room. PRESENT: Mayor Castleberry; Mayor Pro Tem Brock; Council Members Chew, Cott, Perry, and Miller. ABSENT: Council Member Smith following: The Council convened into the Executive Session to discuss the ae Legal Matters -- Under TEX. GOV'T CODE Sec. 551.071 1. Considered action in Brown v. City of Denton. Real Estate -- Under TEX. GOV'T CODE Sec. 551.072 Personnel/Board Appointments -- Under TEX. GOV'T CODE Sec. 551.074 The Council convened into the Work Session on Tuesday, July 5, 1994 at 6:00 p.m. in the city Council Chambers. PRESENT: Mayor Castleberry; Council Members Chew, Cott, Perry, and Miller. ABSENT: Council Member Smith and Mayor Pro Tem Brock 1. The Council received a presentation and held a discussion of the 1994-95 Major Budget Issues Report. Mayor Pro Tem Brock joined the meeting. Lloyd Harrell, City Manager, stated that there were two purposes for the major budget issues report. One was to provide the Council with an early preview of the proposed budget and the second was to present a highlight of the critical policy issues contained in the 1994-95 budget. It also provided various alternatives to address those issues and an opportunity to make recommendations for each issue. He reviewed an explanation of the attachments included in the back-up materials. Appendix A was a listing of the budget packages included in the proposed budget. Those listed in Appendix A were programs ranked by the Executive Staff and proposed to Council for consideration. There were two different rankings this year, capital expenditures or other one-time expenditures and on- going maintenance packages. Attachment B was a listing of packages which were requested by department directors but were not recommended to Council. Attachment C was a .recap of the City Council budget questionnaire including comments from Council. City of Denton City Council Minutes July 5, 1994 Page 2 Attachment D was a listing of General Fund revenues and Attachment E was the expenditure summary of all General Fund functions. This appeared to be a fairly optimistic budget for the next year. This budget gave major emphasis on trying to solve one-time capital expenditure needs of the City. The budget represented $147,993,000 worth of revenues and $147,484,000 worth of expenditures. (1) General Fund Reserve Level - this was the appropriate level of maintaining the General Fund balance for unforeseen emergencies that might arise. The adopted goal had been to maintain this balance between 8-10%. Council had a strong reference for a fund balance of approximately 10%. It was estimated that the fund reserve level would be 14.76% which would allow $1,148,000 to be allocated to help balance the budget. Staff was recommending that a substantial portion of this reserve be allocated for one-time expenditures of a capital nature or other one-time expenditures which would not be reoccurring. In the past, all of the reserve over the 10% had been used for operation and maintenance costs. This year it was recommended that 62% of the fund balance be earmarked for those one-time expenditures and the remaining 35% would be used for on-going operation and maintenance expenses. Options for the unreserved fund balance level were (1) allow the balance to stay at its current level and fund an additional $1,148,678 of revenue or decrease expenditures, (2) use $1,148,000 of the balance as a resource to help fund the 1994-95 budget, or (3) reduce the fund balance below the 10% level. (2) Revenues A. Sales Tax - 1% qeneral purpose tax - the budget included a 4% growth increase in receipts over the current budget amount for the 1% sales tax not used to reduce property tax. Alternatives for the sale tax receipts were (1) project less than a 4% growth, (2) project a 4% growth rate for 1994-95, or (3) projeCt greater than a 4% growth. Recommendation by staff was~to project a 4% growth rate. B. Sales Tax - 1/2 cent to reduce proDerty taxes - the City did not have a choice in this area as to the estimate of this tax. By State law, the City must request an amount from the State Comptroller's Office which certified an amount of revenue which would be generated from the half-cent sales tax. The number certified by the State was $3,176,900. That certification allowed a proposal for a property tax decrease of $.1672 per $100 valuation or a 22.8% decrease in the property tax rate. During the election campaign, it had been indicated to the voters that the property tax would be reduced by at least 20% but this would allow for a 22.8% decrease. It was felt that the recommendation by the State City of Denton City Council Minutes July 5, 1994 Page 3 Comptroller was conservative and any amount collected above the $3 million would go into a special reserve fund. C. Property Tax - the property tax rate started with a rate of $.7479. This would then be decreased by $.1672 for the sales tax. It was estimated that the final certified roll from the Appraisal District would show a growth of approximately 2% in the City's assessed valuation. If that 2% held, in order to bring the tax rate down to the effective rate, the rate would go down $.151. In addition, the proposed budget called for a decrease below the effective rate of $.0011 cents per $100 valuation. If the final appraised numbers from the Appraisal District stayed with the 2%, the final tax rate would be $.5645. If the assessed value was more than the 2%, the rate would go down further. The proposed tax rate of $.5645 represented a 24.5% decrease in the tax rate from the current tax rate. Alternatives for the ad valorem tax rate were (1) set the rate using the Property Tax Code formula at $.0011 per $100 valuation below the effective tax rate which would be $.5645 per $100 valuation, (2) set the rate below the 24.5% percent .reduction which would require a reduction of General fund expenditures, or (3) increase the rate over the $.5645 rate which could go as far up as $.6222 and still be below the rollback rate. The recommendation was to set the rate at $.5645 which was $.0011 below the effective rate and 24.5% below the prior year's tax rate. (3) Pay Plan Adjustments - it was recommended that there be a pay adjustment identical to last year of an average increase of 4.6% based on performance and market adjustments starting in January 1995. Civil Service employees would receive 4.6% plus any scheduled step increases. Alternatives included (1) fully accept the Mercer proposal which would be a 6.4% increase and require an additional $396,350, (2) implement a range adjustment and performance based pay increase between zero to 7% with an average increase of 4.6%, or (3) delay the compensation program increases and provide no increase in employee compensation. It was recommended that an average increase of 4.6% be given based on performance and market adjustments. Not included in the proposed budget was an employee incentive pay program. Last year such a program was included in the proposed budget but was removed during the budget deliberations. This was still a recommendation by the Executive Staff. The Public Utilities Board had recommended a more modest proposal from last year. However, this program was not included in the proposed budget at this point in time. (4) Benefit Adjustments A. Health insurance - included in the budget was an 8% increase in the city premiums for health insurance which was a City of Denton City Council Minutes July 5, 1994 Page 4 reasonable estimat~ for an increase..The cost of that increase was proposed budget. ~ B. TMRS - last year the Council inc eased the retirement program in TMRS from a 5% 2-1 program to 6% 2~1 program. This.year it had been considered to take the level to 7% as most area cities were at a 7% 2-1 match. It was recommended that the City stay at 6% 2-1 level as the cost was too high for the 7% 2-1 match. It was felt that the one-time expenditure items w. this year than an increase in the TMRS level (5) Positions - on face value, it appeare were being added to the General Fund. Those' into three categories - new facilities, res~ cut positions, and enhanced services/servicE positions, two General Fund positions were ~ would drop the total increase to 13.5 new wor General Fund. Of those 13.5 positions, 1 facilities such as the Denton Municipal Compl the new South Lakes Park. Restoration of pr~ included three positions cut in previous ye economic downturn. One was in the Animal Col Engineering Department and one in the Buil These were offset by two reductions in ~ Enhanced services had two categories of recom was a recommendation to include $40,000 in ti grant money to hire up to 6 new police of~ money did not become available, the $40,000 hire two new officers. Other enhanced servic a part-time position for an administrative the weekly Council work sessions broadcasti current part-time prosecutor position to ~~ work with the Municipal Court of Record. I~ not funded, there would be $320,000 to b, General Fund. ¢6) Other Aqency Contribution~ - the propos an increase of $51,700 in allocations to hu $50,000 would be from block grant funds and $ Fund resources. Alternatives included (1) f of $148,300 which would allow $1,700 to be re. the agency requested level of $876,548 which ~ $576,548 to be funded from additional res( reductions, or (3) fund the Human Services level. The recommendation was to fund a' ~re a higher priority ~ that 15.5 positions ~ositions were divided ioration of previously ~ levels~ Of the 15.5 ~eing eliminated which kef years added to the 9 were driven by new ex, the new library or ~viously cut positions ars during the recent %trol area, one in the ~ing Inspection area. he Engineering area. mended increases. One ~e budget for matching icers. If the grant would be available to ~ positions dealt with intern to assist with ~g and increasing the full time position to these positions were reallocated to the ~d budget recommended man service agencies. [,700 from the General und the 1993-94 level ~llocated, (2) fund at ~equired an additional ~urces or expenditure Committee recommended the Human Services City of Denton City Council Minutes July 5, 1994 Page 5 Committee recommended level as amended by the Council. (7) Transportation - the proposed budget included a $25,799 increase from the current funding level for SPAN and Handihop. Alternatives were (1) keep the funding at its current level which would allow $25,799 to be reallocated but would require a reduction of current SPAN services or (2) fund at the increased level. The recommendation was to fund at the $25,799 increased level. (8) Tax exemption for persons over 65 - In 1988-89 the Council adopted a policy to move the over 65 exemption to a $25,000 level. The current exemption for persons over 65 was $21,000. The proposal included another increase to the exemption for a total exemption of $22,000 in 1994-95. Alternatives included (1) keep the funding at its current level and use an additional $15,000 for other purposes, (2) increase the exemption to $25,000 immediately and eliminate $45,000 of expenditures from the budget or increase revenue, or (3) proceed with the recommendation to increase the exemption by $1,000 per year, for a total exemption of $22,000 in 1994-995. The recommendation was to increase the exemption $1,000 for 1994-95. (9) Reserve Funds A. Fire Reserve Fund - this fund was set up a number of years ago to help staff various fire stations. In 1991-92 the Council adopted a policy to draw down that reserve fund over a period of time. The proposed budget continued that policy and used $50,000 to offset 1994-95 expenditures. B. Hotel-Motel tax fund - in the 1991-92 budgeting process, the Council set aside a small amount of the hotel/motel fund which would be available for special projects in the community. The proposed budget recommended using $124,000 of the $145,000 in the fund for a new roof on the Civic Center. ~ (10) Street Improvements - the proposed budget continued to increase the allocation for street maintenance. (11) Consulting Assistance - there were three major issues dealing with consulting assistance addressed in the 1994-95 budget. Those areas included an impact fee project, a comprehensive long range Information Services strategy study, and a revision to the current zoning ordinance. (12) Cable Television - the proposed budget recommended a level of funding which would allow the continued televising of the formal Council sessions and the work sessions. It had been discussed to City of Denton City Council Minutes July 5, 1994 Page 6 possibly televise the Planning and Zoning Commission meetings and extra city-originated programming. If those extra steps were taken, it was felt that it should be done in a professional manner with a professional position for that operation. Due to time constraints, this item was continued during the Regular Session under Miscellaneous Matters from the City Manager. The Council convened into the Regular Meeting on Tuesday, July 5, 1994 at 7:00 p.m. in the Council Chambers. PRESENT: Mayor Castleberry; Mayor Pro Tem Brock; Council Members Chew, Cott, Perry, and Miller. ABSENT: Council Member Smith 1. Pledge of Allegiance The Council and members of the audience recited the Pledge of Allegiance. 2. The Council considered approval of the Minutes of the May 31 and June 7, 1994 City Council meetings. Perry motioned, Brock seconded to approve the Minutes as presented. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. Mayor Castleberry presented Bob Nelson, Executive Director for Utilities, an award from the American Public Power Association 3. Citizen Reports A. The Council received a citizen report from Willie Hudspeth regarding a drainage problem behind his house. Mr. Hudspeth stated that Mr. Torrez had been very helpful with his mituation. He had received a letter from Lee Allison regarding the drainage ditch behind his home. He presented a video of the drainage ditch area. He stated that there was an odor from the channel behind his home and much debris in the channel. Mosquitoes were a terrible problem from the channel. He owned the channel but could not do anything to the channel to correct the problem. He proposed that the City take car~ of the d~bri~ in th~ channel and he would take care of the weeds. City of Denton City Council Minutes July 5, 1994 Page 7 Council Member Chew asked if Mr Hudspeth stated that he owned the channel. Hudspeth replied correct. 4. Public Hearings A. The Council held a public hearing and considered adoption of an ordinance rezoning a 0.4192 acre tract located on the north side of East McKinney approximately 200' west of Loop 288 from General Retail (GR) to Commercial with conditions [C(c)]. Z-94-011 (The Planning and Zoning Commission recommended approval 6-0). Frank Robbins, Executive Director for Planning and Development, stated that this was a conditioned zoning request which added only one use in the commercial category to the list of uses already authorized in the general retail category. The additional use would be for warehouses in the zoning district. There was no opposition of this zoning and the Planning and Zoning Commission recommended approval as it met all of the conditions of the Denton Development Plan. The Mayor opened the public hearing. Gary Hammett stated that the proposal would allow for a storage building for the businesses in the area. Ten warehouses would be erected on the property. No one spoke in opposition. The Mayor closed the public hearing. The following ordinance was considered: NO. 94-111 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, PROVIDING FOR A CHANGE FROM GENERAL RETAIL (GR) TO COMMERCIAL - CONDITIONED [C(c)] ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION FOR A 0.4192 ACRE TRACT OF LAND LOCATED ON THE NORTH SIDE OF EAST MCKINNEY STREET, APPROXIMATELY 200 FEET WEST OF LOOP 288; PROVIDING FOR A PENALTY IN THE MAXIMUM AMOUNT OF $2,000 FOR VIOLATIONS THEREOF; AND PROVIDING FOR AN EFFECTIVE DATE. Brock motioned, Perry seconded to adopt the ordinance. On roll vote, Brock "aye", cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. City of Denton City Council Minutes July 5, 1994 Page 8 B. The Council held a public hearing and considered adoption of an ordinance rezoning a 17.9335 acre tract located on the east side of Ruddell Street south of the extension of East Hickory Street from single-family dwelling (SF-7) zoning district to Light Industrial-conditioned [LI(c)] zoning district. Z-94-013 (The Planning and Zoning Commission recommended approval 6-0). Frank Robbins, Executive Director for Planning and Development, stated that this was a zoning request from SF-7 to LI- conditioned which was similar to the existing zoning to the east on the County owned land. The County went through the zoning process but the City was significantly constrained in a degree to which it could impose zoning restrictions. The rule was one of reasonableness. Was this a reasonable use for the property. The Planning and Zoning Commission had recommended that on this site, the zoning be changed from SF-7 to LI-c. This was similar to the zoning on the property in which the County jail was located. The difference between the LI conditioned and this site was that for the other two tracts in the LI-conditioned zoning, a correctional facility would be authorized if approved with a site plan and a specific use permit. For this tract, a correctional facility was not allowed but only two uses for governmental offices and professional administrative offices. The condition recommended by the Planning and Zoning Commission, other than the use condition, was that there be no access on Ruddell Street. The Planning and Zoning Commission recommended earlier and Council approved the preliminary plat of the site. The County was now in the process of final platting of Lot 1 which was the southern property. There was some concern for access at Hickory and the County had indicated that a no access situation was not acceptable. Staff believed that that would be a condition which would be unreasonable to impose on the property because zoned SF, the property needed access. As a separately platted lot for which the preliminary plat had been approved, it should have access. The condition recommended by the Planning and Zoning Commission should be deleted. Other circumstances associated with the development dealt with emphasizing access to the entire property from McKinney Street which was the plan from the County. Staff believed that the County was sensitive to traffic on Ruddell and would be addressed in the future in the access to the entire property. Lot one would be developed with a small maintenance facility. Based on the low intensity area for this entire tract, 900 vehicle trips would be generated according to intensity allocation. The way that the County had proposed to develop the property, that amount would be much less. It was felt for legal reasons, section 2.B. of the proposed or~inang~ ~houl~ ~ d~l~t~dt removing the restriction of roadway access on Ruddell. The Mayor opened the public hearing. City of Denton City Council Min~te~ July 5, 1994 Page 9 Mike Jones, Director of Public Works for Denton County, stated that although the plans for the property were not firm, the planning to date did emphasize access off of McKinney Street as well as off of Woodrow. There was a need for a secondary minor access off Ruddell. The County wanted to work with Staff and were receptive to many of the conditions requested for the property such as set back requirements. The County intended to develop the property with sensitivity to the neighborhood. Marion Hamilton expressed a concern regarding the proposal. She was not against the development but was concerned about the additional traffic which curb cuts on Ruddell would cause. There were many children in the area of the Phoenix Apartments. She had been assured by the County that they would install a sidewalk and fencing along the property. Additional traffic was a concern as Ruddell was a narrow street with much traffic already. Any additional traffic on Ruddell should include a widening of Ruddell Street and additional access on Ruddell should consider the effect on the pattern of traffic on Ruddell Street. She had talked with the County about the possibility of making a Hickory extension coming out of the property an exit only. Vehicles would enter from McKinney and exit on Hickory. Willie Hudspeth stated that his property was adjacent to the property. He had indicated no original objection to the proposal but was assured that there would be no access on Ruddell. Now he was hearing differently. He could not understand the reason the County would need access to Ruddell which was a residential area. He felt that the County did not value individual lives which were in the area and the County did not want to value the neighborhood. There were small children in the area and asked why the County needed access on Ruddell. He objected to the County having access on Ruddell and felt that the County could have adequate access on Woodrow and Hickory but as this was considered a second class area, the residents would receive no response. ~ The Mayor closed the public hearing. Council Member Cott asked for an explanation of the proposed road restrictions. Robbins stated that it was the staff's recommendation that, for legal purposes related the rule of reasonableness, the proposed ordinance be approved but that 2.B. be deleted whiCh was a condition recommended by the Planning and Zoning Commission for no access from Ruddell. City of Denton City Council Minutes July 5, 1994 Page 10 Council Member Cott asked for Council Member Chew's position on the effect of this proposal on the future of the neighborhood. Council Member Chew stated that he was against the proposal due to the endangerment of children in the area even with the legal restrictions. The County had another access to the property and should use it. Council Member Miller asked if the access proposed from the County had been located and was it an extension of Hickory. Jones stated that there would be no problem limiting access to the point at the Hickory extension. The access point would not be for the County's heavy equipment or trucks. The access would be for future use for the public similar to residential vehicles. Council Member Cott asked if that could be written into the ordinance. Robbins stated that the preliminary plat showed access on Hickory Street. The final plat would provide additional access if possible. Mayor Pro Tem Brock stated that the City Attorney had informed them that a governmental entity whether a university, the County or Federal government could not be restricted by a city's zoning ordinances. The City did not have the authority to restrict such entities with what they did with their property so long as it met the test of reasonableness. Court cases had indicated that this proposal met such a test. The County could build the facility without going through this zoning procedure. The current zoning, which was SF-7 had such access to Ruddell. This process was to work with a governmental entity as the County to solve some of the problems. There were not many options regarding the proposal. Council Member Perry felt that this proposal gave the City an opportunity to work with the County so that the County could take into account the feelings of the City regarding the proposal. Council Member Miller stated that he understood that the County had worked closely with the Planning Department and knew their rights but did not use those rights over City objections. They had indicated that their primary access would be on McKinney and that the access would be for vehicle access only and not for trucks. Miller motioned, Brock seconded to adopt the ordinance as recommended by the Planning and Zoning Commission but striking 2.B. from the ordinance. On roll vote, Brock "aye", Cott, "nay", Miller City of Denton City Council Minutes July 5, 1994 Page 11 "aye", Chew "nay", Perry "nay", and Mayor Castleberry "aye". Motion failed with a 3-3 tie vote. Mayor Castleberry asked for a ruling on the proposal from the city Attorney. Mike Bucek, Assistant City Attorney, stated that a 3-3 vote meant that there was no action taken by the Council so that the present zoning on the property continued as SF-7. Robbins stated that while the zoning did not change, the County could develop the property essentially the way the zoning would have allowed it except that the zoning map would not be changed. They could access at that point. Bucek asked if there would be a problem with the preliminary plat. Robbins replied no. Council Member Miller asked that if the zoning remained SF-7 and the County developed the property, would there be a restriction where access could be developed on the property. Robbins replied no. Council Member Miller stated that the access could be anywhere on Ruddell. Robbins replied yes but that the preliminary plat for Lot 1 had no access on Ruddell as that was where the maintenance facility would be built. Lot 2 had a curb cut near Hickory. If there were to be a different access point, the City could discuss that with the County to determine if that access met the City's regulations within the platting process at that time. City Manager Harrell stated that there were certain conditions which the County had voluntarily agreed to such as 100' setbacks along Ruddell and the prohibition of a correctional institution on the property. Would those conditions no longer be valid now that the zoning had been rejected. Robbins replied that one of the conditions regarding the 100' setbacks was on the preliminary plat and the submitted final plat so it would stay. The correctional facility condition was not sDoken to with the action taken by the Council. Council Member Chew asked if the County would still have access on Hickory through the property. City of Denton City Council Minutes July 5, 1994 Page 12 Robbins replied correct and that it would be unreasonable to preclude that access. Mayor Pro Tem Brock stated that the problem in rejecting this zoning change was that the City had less control over what would happen on the property. With the proposed zoning there was a condition which excluded a correctional facility. With the zoning which was already in place, there was no condition which would exclude a correctional facility. She was very much concerned about having a correctional facility that close to a residential area. Mayor Castleberry stated that the County could develop the property in any manner it wished. Robbins replied yes and that he would agree with the point that Mayor Pro Tem Brock made. The City might be putting in jeopardy the process already started and was concerned with the on-going process. 5. Consent Agenda Perry motioned, Brock seconded to approve the Consent Agenda as presented. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. A. Bids and Purchase Orders: Bid #1632 - 1991 Upgrade Waterline Bid #1633 - Ryan Road Paving and Drainage Bid #1634 - Asbestos Abatement-Electric Production Plant Bid #1636 - Rear Load Refuse Trucks B. Plats and Replats Preliminary replat of Lots 1R and 2R, Block A, 3-J Addition. The 0.6469 acre site was located on East McKinne¥, east of the Piggly Wiggly store. (The Planning and Zoning Commission recommended approval 6-0). Preliminary replat of Lot 4F, Block A, Section 2 of the Freeway Park Addition; into Lots 4F-1R through 4F-SR. The 8.481 acre site was located on the we~t side of Mesa Drive, at Los Colinas Drive. (The Planning and Zoning Commission recommended approval 6-o). city of Denton City Council Minutes July 5, 1994 Page 13 6. Ordinances The Council considered the Consent Agenda Ordinances A. and B. A. NO. 94-112 AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A CONTRACT FOR THE PURCHASE OF MATERIALS, EQUIPMENT, SUPPLIES OR SERVICES; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING FOR AN EFFECTIVE DATE. B. NO. 94-113 AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND PROVIDING FOR THE AWARD OF CONTRACTS FOR PUBLIC WORKS OR IMPROVEMENTS; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING FOR AN EFFECTIVE DATE. Perry motioned, Brock seconded to adopt the Consent Agenda ordinances A. and B. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. C. The Council considered adoption of an ordinance authorizing the Mayor to execute an agreement between the City of Denton and ADS Environmental Services, Inc. for professional engineering services. Bob Nelson, Executive Director of Utilities, stated that this was an engineering contract for inflow infiltration studies in the Cooper Creek Basin sewer line and manholes. The total cost of the contract was $146,000. There had been a reasonable amount of inflow in that area and it was felt that there was a need to detect the locations of any breaks. The study would determine the problem and provide recommendations to correct those problems. The following ordinance was considered: NO. 94-114 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND ADS ENVIRONMENTAL SERVICES, INC. FOR PROFESSIONAL ENGINEERING SERVICES; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. City of Denton City Council Minutes July 5, 1994 Page 14 Perry motioned, Brock seconded to adopt the ordinance. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. D. The Council considered adoption of an ordinance amending the 1993-94 budget of the City of Denton by appropriating the sums of $991,672 and $201,037 from the Unobligated Fund Balance of the Working Capital Fund to Account Numbers and 710- 025-0580-8710, respectively, and by appropriating the sum of $2,400,000 from the Unobligated Fund Balance of the Electric Fund to Account Number -8204; and providing for publication. Kathy DuBose, Acting Executive Director for Finance, stated that the ordinance was necessary due to unanticipated increases in the garage, warehouse and electric divisions. The Garage Division of the working capital fund experienced a tremendous increase in repairs including 11 landfill and electric utility equipment vehicles. Also there was increased activity in construction projects and general inventory problems. These were unforeseen expenditures during the last budget process and required additional appropriations to proceed. Because the inventory and sublet repairs were internal service operations, any increased expenditure would have an offsetting revenue in each fund. Council Member Cott asked if this revenue was coming in this year. DuBose replied yes. Mayor Pro Tem Brock stated that this was not a net increase in the budget. DuBose replied no. The following ordinance was considered: NO. 94-115 AN ORDINANCE AMENDING THE 1993-94 BUDGET OF THE CITY OF DENTON, TEXAS BY APPROPRIATING THE SUMS OF $991,672 AND $201,037 FROM THE UNOBLIGATED FUND BALANCE OF THE WORKING CAPITAL FUND TO ACCOUNT NUMBERS AND 710-025- 0580-8710, RESPECTIVELY, AND BY APPROPRIATING THE SUM OF $2,400,000 FROM THE UNOBLIGATED FUND BALANCE OF THE ELECTRIC FUND TO ACCOUNT NUMBER -8204; PROVIDING FOR PUBLICATION; AND DECLARING AN EFFECTIVE DATE. City of Denton City Council Minutes July 5, 1994 Page 15 Cott motioned, Brock seconded to adopt the ordinance. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. E. The Council considered adoption of an ordinance authorizing the retention of counsel to represent the City in pending litigation styled Cohaqen v. City of Denton. Mike Bucek, Assistant City Attorney, stated that this item dealt with the retention of legal counsel in the lawsuit styled Cohagen v. City of Denton. The attorney representing the City in the case asked that the ordinance also confirm that the Council concurred with the termination of the lease. The following ordinance was considered: NO. 94-116 AN ORDINANCE AUTHORIZING THE RETENTION OF COUNSEL TO REPRESENT THE CITY IN PENDING LITIGATION STYLED COHAGEN, ET AL V. CITY OF DENTON; AUTHORIZING THE FILING OF A COUNTERCLAIM FOR ATTORNEY'S FEES; AFFIRMING PRIOR ACTIONS OF THE CITY MANAGER AND HIS DESIGNEES RELATING TO THE LEASE OF PROPERTY BY THE CITY; AND PROVIDING AN EFFECTIVE DATE. Perry motioned, Chew seconded to adopt the ordinance. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. F. The Council considered adoption of an ordinance amending ordinance No. 93-176 relating to the designation of depositories for City funds to provide for the execution of depository pledge agreements between the City and such depositories. Harlan Jefferson, Treasurer, stated that the City's auditors recently informed the City that there was a potential that the City could lose the funds held by its local depository bank. These were funds which were in the City's checking accounts. The loss could occur if the depository bank filed for bankruptcy and the City did not have certain legal documents on file. The auditors based their opinion on a recent court case. The proposed agreement would take care of two of the four elements and the bank would take care of the remaining two elements. City of Denton City Council Minutes July 5, 1994 Page 16 The following ordinance was considered: NO. 94-117 AN ORDINANCE AMENDING ORDINANCE NO. 93-176 RELATING TO THE DESIGNATING OF DEPOSITORIES FOR CITY FUNDS TO PROVIDE FOR THE EXECUTION OF DEPOSITORY PLEDGE AGREEMENTS BETWEEN THE CITYAND SUCH DEPOSITORIES; AND PROVIDING FOR AN EFFECTIVE DATE. Brock motioned, Cott seconded to adopt the ordinance. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried nanlmously. u ' Mayor Castleberry indicated that the items listed as Resolutions C. and D. were ordinances and would be considered at this time. C. The Council considered adoption of an ordinance authorizing the Mayor to execute Amendment No. 1 to the agreement between the City of Denton and the Denton Chamber of Commerce for the payment and use of hotel tax revenue. Harlan Jefferson, Treasurer, stated that this agreement would amend the current contract with the Chamber of Commerce to extend the current contract to March 1995. Council included a requirement for quarterly reports for performance and expenditures which was a new State law requiring such reports. The following ordinance was considered: NO. 94-118 AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AMENDMENT NO. 1 TO THE AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON CHAMBER OF COMMERCE FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE; AND PROVIDING AN EFFECTIVE DATE. Brock motioned, Perry seconded to adopt the ordinance. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. D. The Council considered adoption of an ordinance authorizing the Mayor to execute Amendment No. 1 to the agreement between the City of Denton and the North Texas Fair Association for the payment and use of hotel tax revenue. Harlan Jefferson, Treasurer, stated that the ordinance would amend a similar contract with the North Texas Fair Association. City of Denton City Council Minutes July 5, 1994 Page 17 City Manager Harrell stated that now all the contracts for the hotel/motel tax would come due on the same date. The following ordinance was considered: NO. 94-119 AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AMENDMENT NO. 1 TO THE AGREEMENT BETWEEN THE CITY OF DENTON AND THE NORTH TEXAS FAIR ASSOCIATION FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE; AND PROVIDING AN EFFECTIVE DATE. Brock motioned, Perry seconded to adopt the ordinance. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. 7. Resolutions A. The Council considered approval of a resolution suspending the proposed effective date of the proposed new rate schedules and service regulations of Texas Utilities Electric Company; providing that the rate schedules and service regulations of said company shall remain unchanged during the period of suspension; providing for notice hereof to said company; finding and determining that the meeting at which this resolution was passed was open to the public as required by law. Bob Nelson, Executive Director for Utilities, stated that Texas Utilities served approximately 700-800 customers in dual certificated areas in Denton. They had filed four new electric rates which included an economic development service rider which provided for a reduced demand charge for new customers, a general service competitive pricing rate which would provide for a negotiated rate for commercial customers, a wholesale power competitive rate for municipal cooperatives and other wholesale dealers, and an environmental service rate for new technologies such as ozone systems. The City had four options relative to the proposed rates: (1) approve the rates as submitted, (2) deny implementation, (3) relinquish the original jurisdiction over the rates to the Public Utilities Commission or (4) suspend the implementation of the new rates pending the PUC review and adoption. In .the past, the City had retained original jurisdiction, suspended the implementation and later adopted whatever the PUC had approved. Staff was recommending a similar procedure. James Loveday, TU Electric, stated that on June 6, TU had filed a package of new rates designed to enhance economic development, City of Denton City Council Minutes July 5, 1994 Page 18 improve the environment and encourage further energy conservation by large users of electricity. The proposal was filed with the PUC and cities in the TU electric service area. If approved, the new rates would be offered to qualifying commercial, industrial and wholesale electric customers as an incentive to attract new businesses and to retain current businesses. The package also included an incentive for qualifying customers who converted to advanced technologies which would conserve energy or improve the environment. The options would provide revenue that the company otherwise would not receive thereby helping to reduce the level of future rate requirements. It was felt that this was a vital step in keeping TU's area competitive. The following resolution as considered: NO. R94-029 A RESOLUTION OF THE CITY OF DENTON, TEXAS SUSPENDING THE PROPOSED EFFECTIVE DATE OF THE PROPOSED NEW RATE SCHEDULES AND SERVICE REGULATIONS OF TEXAS UTILITIES ELECTRIC COMPANY; PROVIDING THAT THE RATE SCHEDULES AND SERVICE REGULATION OF SAID COMPANY SHALL REMAIN UNCHANGED DURING THE PERIOD OF SUSPENSION; PROVIDING FOR NOTICE HEREOF TO SAID COMPANY; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS RESOLUTION IS PASSED IS OPEN TO THE PUBLIC AS REQUIRED BY LAW; AND PROVIDING FOR AN EFFECTIVE DATE. Cott motioned, Chew seconded to approve the resolution. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. B. The Council considered approval of a resolution appointing a member to the DENCO Area 9-1-1 District. City Manager Harrell stated that the governihg body of the DENCO 9- 1-1 District was made up of two representatives appointed by cities. Each year the cities had to cast a ballot for representatives to serve on that Board. All cities in Denton County had one vote and the majority of votes cast by those cities elected a representative. The two current city representatives were Olive Stephens and John McGrane. McGrane's term expired on September 1 of this year and McGrane had indicated that he did not wish to continue serving. The only individual indicating a willingness to serve on the Board was Don Franklin from Trophy Club. Harrell had called Lewisville and Carrollton to se~ if they had any other nominations but they indicated that there was no interest at this point in time and expressed confidence in Franklin. City of Denton City Council Minutes July 5, 1994 Page 19 The following resolution was considered: NO. R94-030 A RESOLUTION NOMINATING A MEMBER TO THE BOARD OF MANAGERS OF THE DENCO AREA 9-1-1 DISTRICT; AND DECLARING AN EFFECTIVE DATE. Cott motioned, Perry seconded to nominate Don Franklin as a representative to the DENCO 9-1-1 Board. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. 8. The Council considered nominations/appointments to the City's Boards and Commissions. Mayor Castleberry indicated that the Council had made nominations at the last meeting and those were ready for approval. Perry motioned to approve those nominated at thelast meeting. On roll vote, Brock "aye", Cott, "aye", Milier "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. (Attachment A) Mayor Castleberry indicated that Vera Laney had been omitted from the previous nomination to the Keep Denton Beautiful Board. Cott motioned to approve the Laney nomination. On roll vote, Brock "aye", Cott, "aye", Miller "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. Additional nominations were made by the Council as indicated in Attachment A. 9. Vision Update There was no report given at this time. 10. Miscellaneous matters from the City Manager. City Manager Harrell continued with the Major Budget Issues. Workin~ Capital fund - the budget proposed to add one position in the warehouse for a courier to pickup and deliver items such as office supplies, mail and packages to various city departments. Alternatives were (1) fund the position to provide pickup and delivery service among various city departments, or (2) not fund City of Denton city Council Minutes July 5, 1994 Page 20 the position which would allow $24,969 to be reallocated for expenditures. Major Issues - Utilities The total budget for utility operations was estimated at $102,284,000 with proposed expenditures of $100,538,000. Revenues were based on an electric increase of 1% in the base rate plus a possible 1.25% increase in the energy cost a4justment if needed; water was proposed with a 2% increase and wastewater, an 8% increase. The solid waste revenue was based on a $.85 per month increase in the residential rate, a 9.95% increase in commercial rates and $1.00 per cubic yard increase in the landfill disposal rates. Based on these proposed rate increases, an average residential customer's monthly bill would increase $4.16 or 3.2%. Electric Summary - it was proposed that the average residential customer would have a $1.32 per month increase. Included within the electric system, was the electric adjustment for lower income individuals in the community to offset the increased sales tax. An adjustment was proposed in the RI rate which would decrease approximately 6.16% in rates for those customers and resulting in a $45,000 decrease in revenue in the electric system. This proposal had been reviewed by the Sales Tax Advisory Committee who unanimously supported the change as a way to achieve the stated objective. Three new positions proposed in the electric system were a senior engineer in production, an electronic technician in communications and an operation and maintenance trainee in production. Two worker years of temporary hours were added plus the Customer Information Coordinator position would be transferred to General Government with utility support. At the request of the Public Utilities Board, the proposed budget included a new expenditure for a street rental fee to be t~ansferred to General Government and would be based on 1% of Denton's electric rate revenue. The new fee was suggested as a way in which the wastewater ROI transfer could be capped at 6% of new investment but not more than 12% of revenue. Because the new water plant was coming on line, a drastic increase in the amount of transfer to the General Fund was anticipated. Water Summary - the Water Department proposed budget was based on a 2% increase in rates. No new positions were proposed and one senior engineer would be transferred to the Solid Waste Landfill Division. Wastewater Summary - the proposed budget recommended an 8% increase in rates and included several new positions of an environmental monitoring technician and half of the cost of the Director of City of Denton City Council Minutes July 5, 1994 Page 21 Environmental Services position. a cap on return on investment proposal. The proposed budget also assumed related to the street rental Sanitation Summary - the proposed budget included an $.85 increase in the residential rate, a 9.95% increase in the commercial rate and a $1.00 per cubic yard increase in the landfill disposal rate. Three new positions recommended included one dispatcher, a recycling coordinator and a senior engineer transferred from the water department plus a temporary intern position. In addition, the Community Service area had been undergoing a restructuring that resulted in the Director of Environmental Services managing the solid waste department. One half of that position would be funded by the sanitation department and one half would be funded by the wastewater department. The proposed budget reduced .50 worker years of administrative interns that were transferred to the General Fund to video tape the city council meetings for cable television broadcast. The position of Street Superintendent had also been eliminated. Council Member Cott stated that many organizations were downsizing and the last page of the report seemed to indicate that revenue and income were going in the wrong direction. If there were money left, he felt that it should be given to the taxpayers and not used. City Manager Harrell replied that as the property tax options were discussed, that was an option which the Council had. A rate had been recommended which was $.011 cents below the effective rate but could be lowered if Council wanted to make other decisions to have that flexibility. The City was trying to downsize from past years as seen by the reduction of supervisory functions. Mayor Pro Tem Brock asked that the chart% ~hich the City Manager presented be made into handouts for the Council. She suggested that the information regarding the public hearing on the budget be published as much as possible in order to receive public input on the budget. City Manager Harrell stated that the budget calendar indicated that August 23rd would be the public hearing on the budget. 11. There was no official action taken on Executive Session items discussed during the Work Session Executive Session. City of Denton City Council Minutes July 5, 1994 Page 22 12. New Business The following items of New Business were suggested by Council Members for future agendas: A. Council Member Cott requested a discussion regarding the downtown fire station. Mayor Castleberry indicated that that would be a part of the budget session discussions. Council Member Cott stated that it needed to come relatively soon as there was a need to discuss the item as quickly as possible. 13. There was no Executive Session held during the Regular Session. With no further business, the meeting was adjourned at 8:45 p.m. ~NNI~E~ WALTERS- U~ITY SF~RETARY CITY OF DENTON, TEXAS ACC001F1