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Minutes February 28, 1995CITY OF DENTON CITY COUNCIL MINUTES FEBRUARY 28, 1995 The Council convened into a Closed Meeting on Tuesday, February 28, 1995 at 5:15 p.m. in the Civil Defense Room. PRESENT': Mayor Castleberry; Mayor Pro Tem Brock; Council Members Cott, Perry, and Smith. ABSENT: Council Members Chew and Miller The Council discussed the following in Closed Meeting: A. Legal Matters -- Under TEX. GOV'T CODE Sec. 551.071 1. Considered GTE response to notice to produce records pursuant to Resolution No. R95-002. B. Real Estate -- Under TEX. GOV'T CODE Sec. 551.072 Ce Considered possible parking lot lease of Union Pacific right-of-way near the Denton Municipal Complex. Personnel/Board Appointments -- Under TEX. GOV'T CODE Sec. 551.074 Council Members Miller and Chew joined the meeting during the Closed Meeting. The Council convened into the Work Session on Tuesday, February 28, 1995 at 6:00 p.m. in the Council Chambers. PRESENT: Mayor Castleberry; Council Members Chew, Cott, Perry, and Smith. ABSENT: Mayor Pro Tem Brock and Council Member Miller 1. The Council received a report and held a discussion regarding a report from PHHFantus on the results of the competitive analysis study. Mayor Pro Tem Brock and Council Member Miller joined the meeting. Carlton Schwab, PHH Fantus, stated that he would present the highlights of the report presented to Council. Fantus was retained to evaluate Denton's competitive position for attracting and retaining businesses; to critique the City's marketing and retention programs; and to identify possible strategies for enhancing Denton's efforts. Steps in this process included identifying key factors in the tYPical corporate location decision- making process; performing an analysis of Denton's existing situation, reviewing the baseline strengths and weaknesses, and identifying economic development opportunities and threats; benchmarking Denton's critical success factors for economic development and comparing Denton to the standards in key competitor locations; performing a specific assessment of Denton's existing City of Denton city Council Minutes February 28, 1995 Page 2 marketing and retention programs; and identifying possible economic development strategies for Denton and related programmatic and operational initiatives. The report identified the strengths and weaknesses of Denton from an economic development standpoint. As a part of that analysis, strategic opportunities for future development efforts were identified as well as threats which, if left unaddressed, might have a negative impact on Denton's economic future. Strengths and strategic opportunities included (1) Denton had the attributes of a university city with a hometown atmosphere and had access to the resources of the Metroplex; (2) Denton had the presence of major universities; (3) Denton had favorable labor market conditions, especially a plentiful high-quality workforce; (4) Denton had relatively low office labor costs and a location in a hotspot for white-collar office location activity; (5) Denton had excellent transportation access, especially highways and air; (6) Denton was a central location for participation in NAFTA- related trade; (7) Denton had abundant available land; (8) Denton had the ability to dictate the course of future growth because of Denton's distance from Dallas; (9) the VISIONING process was a positive as a foundation for a collaborative community effort to define Denton's future; and (10) Denton had a number of businesses satisfied with the investment environment in Denton. The report noted the following weaknesses and strategic threats: (1) there was lack of fully-served parcels of land, spec buildings and prices for available lots; (2) Denton lacked the image and business awareness within and outside the Metroplex; (3) there was an indecision about the relative merits of tying Denton's destiny to its relationship with Dallas; (4) Denton's economic development program was not structured to compete with higher-powered competitor locations; and (5) the northward creep of the Metroplex might restrict Denton's ability to dictate its own future. Council Member Cott asked about the number of dollars Schwab suggested placing in infrastructure for future occupants. Schwab replied that was a decision the Council would have to make. council Member Cott asked if there was an estimate of what this was going to cost. Schwab replied that his firm could not provide that but could help with the identification of an industrial site. The cost of utilities was not in their scope of work. Schwab continued with weaknesses and strategic threats: (6) the available infill between Denton and Dallas might delay the growth desired by some among Denton's business leadership; (7) there was a need for improved relations between some elements of the business community and city government; (8) local manufacturing wage costs did not provide a marketable advantage; and (9) Denton was outside the most active national search area for manufacturing locations. It was felt that City of Denton City Council Minutes February 28, 1995 Page 3 any consideration of Denton's economic developmen ~'ogram and future strategies must be undertaken in light of th ~ findings. Denton had many strengths on which to build but ] needed to recognize the need to address its shortcomings and threats and take a realistic approach to growing the city. The ccnsensus of individuals surveyed was that Denton was an underperfor~er from an economic development standpoint. Council Member Cott asked what made Denton an underperformer. Schwab stated that Denton was in a high growth region of the country but did not have many new businesses locating h~e and was behind in economic development. The recommended strategies from the report could serve as the basis for the ongoing bran%-building process that had to occur. Recommendations for trategies included: (1) revamping the economic development progr~ through the establishment of a new organizational structure, t~ raising and expenditure of more money, the setting of appropriate expectations and managing them, and a focus on brand-building; (2) establishing a brand image for Denton as being a s% nd-alone university community with a hometown atmosphere that %~s close enough to Dallas to offer businesses the critical advantages inherent in being in the Metroplex region. Council Member Miller asked about the concept of a combination of a private and public sector and a coordination of those entities. Schwab replied that Denton spent approximately $140,000 per year in a public/private partnership. It was felt that that was good and felt that that was the way to go with economic development. Council Member Perry asked what was included in the $140,000. Schwab stated that it included salaries, standard economic development activities such as marketing and prospect trips, participation in trade shows, etc. Council Member Perry felt that those items only included what was done by the Chamber and did not include City incentives such as utility incentives, Freeport incentives, etc. Schwab stated that the study looked at strictly a program component. Any improvements made in the City had an impact on economic development. Council Member Perry felt that Freeport exemptions were an economic development and did not see why such items were not included in the amount spent on economic development. Schwab replied that the Freeport exemption was a tool used to attract business and not a program activity. Other recommendations 399 400 City of Dent~' February 28 Page 4 City Council Minutes i995 Included: (3) adopting an account management process, geared towards retention, that focused on anticipating customer needs, addressing them as quickly as possible and encouraging expansion activities of existing businesses; (4) developing a better leverage of the assets that most distinguished Denton from competitor locations such as its institutions of higher education and its university city setting and environment; (5) enhancing the Denton product by improving infrastructure, especially available sites and buildings, that would assist with the attraction of new business, and developing an ongoing process by which Denton's business and public sector leaders could work in a coordinated fashion to advance the interests of the whole community rather than allowing personality conflicts and other counter-productive phenomena to interfere with appropriate growth. Council Member Miller asked Schwab to elaborate on the issue of brand image in terms of length, costs, and how to develop the image compared to receiving immediate results and the kind of commitment involved. Schwab replied that it needed to be an initial commitment for at least three to five years. Denton needed to decide on an image and proceed with that regionally, nationally and internationally. The last recommendation was to ensure that Denton's high quality ample workforce remained a critical asset to existing businesses and a lure to new investment by providing training opportunities and linking businesses with programs provided by the educational institutions. The study listed action items which the Chamber and City should take: (1) lay the groundwork for adoption of the economic development sales tax. Assuming a consensus existed for it among city and business leaders, the city should adopt an ordinance calling for a vote on the issue. The quicker the tax was adopted, the sooner an economic development corporation could be established to pursue marketing and other initiatives. (2) The current economic development program should be streamlined to enable more effective action in the short-term. (3) Initial steps in the brand management process could be taken even before the economic development sales tax was approved. (4) A forum should be established for city-business dialogue. The group that convened should be small and should include the Mayor and/or one or more city council representatives, one or two business community representatives, and at least one representative from a higher education institution. This grouping would symbolically establish the critiCal city-business-university triumvirate, and would allow for surfacing of issues as soon as or even before they became problems. (5) Discussions should be held with the City Manager and Planning and Zoning Director to reinforce the need for a strong customer orientation at City Hall. (6) A review of city ordinances and regulations having an effect on business could be initiated. city of Denton City Council Minutes February 28, 1995 Page 5 Council' Member Cott felt that City staff was not t with a developer. Staff received less credit than have. ~o fight ~ey should Schwab stated that Denton was too small to have thos~ kinds of problems and be successful, even if they were exaggerated. (7) Appoint a temporary individual who could be replaced once the Economic Development Corporation was established to help businesses obtain necessary permits and approvals. The City should consider establishing a position within City government that would be similar to the Development Coordinator position. (8~ Identify existing businesses with the greatest growth potential and those most likely to consider moving out, and have account ma~'~ gers work with them to ensure their continued contribution t~. Denton's economic well-being. (9) Perform a thorough an~lysis of manufacturing activity in Dallas, Tarrant, Denton and Collin counties. (10) Obtain market prices for the available parcels of land so as to be able to better market them. (11) i~evelop a revised incentives package that was consistent with the briand image of the City. (12) Continue to find a purchaser/occupant i~r the TI facility. (13) Begin positioning Denton to benefit from NAFTA- related trade. (14) Develop a spec distribution center either as a stand-alone facility or as part of a business park. Council Member Chew left the meeting at 7:16 p.m. Council discussed various aspects of the report with Mr. Schwab. Council Member Chew returned to the meeting at 7:20 p.m. 2. The Council received a report and held a discussion regarding a proposed workplan for economic development strategy implementation. City Manager Harrell stated that this item was not listed for staff direction and would be placed on an upcoming agenda for Council direction. City and Chamber staff went through the Fantus report and listed each recommendation. Those issues were presented with a staff recommendation as to which agency should take the lead on those options. There were three parts to the recommendation - one for the city, one for the Chamber and one for the Economic Development Advisory Board. Council Member Cott left the meeting at 7:36 p.m. City Manager Harrell stated that staff would like Council to endorse the workplan with the responsibilities listed. Once agreed, staff would take the city issues and present to Council multiple ways to address that issue. Council could then determine which option to follow per issue. 401 4O2 City of Dent¢' February Page 6 City Council Minutes 1995 Council Member Cott returned to the meeting at 7:47 p.m. Council Member Cott asked for several financing alternatives such as sales tax, general obligation bonds, certificates of obligation, etc. Mayor Pro Tem Brock left the meeting 7:45 p.m. City Manager Harrell stated that staff would provide several alternatives to Council with options to proceed with the various issues. Mayor Pro Tem Brock returned to the meeting at 7:46 p.m. Council Member Miller assumed that the City and Chamber would proceed with some of the recommendations of the report and not wait for the development of a corporation. Mayor Castleberry stated that some of the items were marked as a Chamber responsibility with city backup. One or two of the items the Chamber was already doing. He asked that those items be listed and the efforts of the Chamber also be listed in those items. The Council considered Item #4. 4. The Council received a report and recommendations from the Hotel Occupancy Tax Subcommittee regarding proposed funding of hotel occupancy tax recipients for 1995-96 and gave staff direction. Kathy DuBose, Executive Director for Finance, stated that the City's contracts with the recipients of the hotel occupancy tax funds would expire March 31st. The City Council Subcommittee met during the last few months to formulate a recommendation on the use of hotel occupancy tax funds. They interviewed the current recipients and three additional prospective recipients, the Denton Main Street Association,. the Fesitval Foundation and the Denton Historical Landmark Commission. Audits were performed for compliance with the individual contracts and with state law. The Subcommittee also reviewed renovation options for the Civic Center. Brent Byers, Corigan And Associates, presented options for the use of the Civic Center. The Civic Center was currently used for some recreational purposes and some civic uses. Option A would continue the use of the building as a civic center or the potential support space usage for a future convention center which might be located adjacent to the building. The use of hotel/motel tax money would apply to such an option and there were needs of the community which would require continued use of the building. The current Parks and Recreation offices would be replaced with support functions to support civic center uses. The bathrooms would be expanded and City of Denton City Council Minutes February 28, 1995 Page 7 403 modified, a kitchen added, and access to the front of the building would be enhanced. Other options would be phased in over the years, option B would not add any additional square footage but would expand internally into the current open space which would create the support space needed. Option A costs were broken down by specific categories such as ADA improvements, fire alarm systems and sprinkler system improvements, office renovation, sound system improvements, and optional areas such as a kitchen, kiln, elevator and public address system for primary spaces. Option B would include some of the same improvements as in Phase A. Option B would be a reduction in square footage. Less money would be spent with Option B but there was also' less value in Option B. City Manager Harrell stated that the Subcommittee wanted to examine how much money would be necessary to bring the Civic Center building to modern code provisions and to do some remodeling which might make the building more usable for the community. In the City's long range space plan the Parks and Recreation offices were to be moved out of the Civic Center which would make that space available for remodeling. The Subcommittee felt it was desirable to have an architect determine the parameters of those two items. The though~ process was that over a series of years, a plan would be developed where funds would be set aside and saved for this type of improvement program. This would be coordinated with the allocation of the hotel/motel tax. Council Member Miller questioned parking associated with a possible convention center.. Byers stated that a long term recommendation was that there would be more usable public space with underground parking and more bridge connections for overflow areas. Council Member Smith felt that there was a need to meet the needs of the community rather than try to compete against another convention center. There was a need for something to meet the City's needs at this point in time. DuBose continued With the recommendations for funding. The Subcommittee recommended a cap be created that limited the maximum amount of hotel occupancy tax distributed to each recipient. The cap was calculated by taking a three year average of the actual hotel occupancy funds distributed to the recipients minus approximately one percent. Each recipient would receive a percentage ofhotel occupancy money, which was based on the percent of each cap to the 1994-95 hotel occupancy budget, or the actual cap itself, whichever was less. The established percentage would remain valid for the duration of the contract. Any balance would go to the reserve for improvements to the civic Center. The duration of the contract would be two and one-half years so that it would end with the budget cycle in 1997. Monthly payments to the 4City of Denton City Council Minutes February 28, 1995 Page 8 recipients would be eliminated and quarterly payments would be made. The payment structure would be a fixed amount. State statues required quarterly reports be submitted to the taxing entity and those would be required before the release of payment to the recipients. The budgets presented to Council by the recipients would indicate how they intended, to use the hotel occupancy tax money in order to look at how the recipients performed as opposed to how they were budgeted. Failure to submit a financial report which complied with the contract would be cause for termination of the contract. The limitations on use of the funds had been adjusted to include all state allowed expenditures based on the recipients budgets. An insurance requirement had been added which limited the City's general automobile and worker's compensation liability. A clause had been added which limited future commitments by the City of hotel tax funding to the current contract period. Mike Bucek, Acting City Attorney, stated that the contracts would be sent to the agencies for review and Council would consider the separately at a future meeting. Council Member Miller asked if the recommendations had been discussed with organizations and were they aware of the cap. Mayor Castleberry replied that this would be done with the current contracts. Council Member Miller stated that he served on the Holiday Festival Association and there had been a desire over the last few years to have the Historical Museum open the night of the community activity. It was important not to get into the operation of an organization but when it impacted the outcome of city events, these problems needed to be worked out. He questioned if the cap would be too restrictive over the period of the contract and if there needed to be a clause added for possible changes to the allocation. Mayor Castleberry indicated that the reserves of the agencies were also taken into consideration. The purpose of the cap was to allow any excess funds to be allocated for Civic Center renovations. Council Member Smith stated that other agencies were interviewed but not approved for funding. The Denton Jazz and Arts Festival was a big tourism draw to the City. She questioned whether it would be well to encourage the recipients to obtain matching funds. Bucek stated that the hotel/motel legislation limited the City's contribution to arts and music to 1% and the Greater Denton Arts Council was already receiving 1%. If other'agencies were included, that allocation would have to be reconsidered. Another point was that the Jazz Festival raised money in order to provide grants to organizations which might result in a gratuity, issue. City of Denton City Council Minutes February 28, 1995 Page 9 4O5 Mayor Castleberry stated that it was felt that allocation to the Downtown Association would be a duplication of current efforts by the Convention Bureau and other organizations. The Historic Landmark Commission was a city organization and if funds were needed, the request should go through the budget process. There was a cap in the contracts but if the hotel/motel funds received were not sufficient to meet the caps, the general fund did not supplement the funds. City Manager Harrell stated that if the formula was accepted, the extra amount for the Civic Center improvement fund would be approximately $60-70,000. The minimum improvement was much more than that amount. This would be a long term proposal and a savings fund for the project. Dubose stated that approval of the contracts was scheduled for March 21st. With Council direction, the contracts would be sent to the recipients for their consideration. Miller motioned, Perry seconded to proceed with the process as outlined. On roll vote, Brock "aye", Cott "aye", Miller "aye", Smith "aye", Chew "aye", Perry "aye", and Mayor Castleberry "aye". Motion carried unanimously. 3. The Council received a report and held a discussion regarding major initiatives from the Vision Project. Lloyd Harrell, City Manager, stated that the Project cabinet had taken all of the work of the Impact Groups and established priorities for the project. The Cabinet formed action teams which would work on suggested ways to implement those priorities. The four categories expressing the functional areas which the community should emphasize were work, learn, live and play. Each category had a statement of the vision under that category. Each functional area had a specific long-term objective which was felt to be appropriate to achieve the work area. The Cabinet took each initiative and prioritized them and then set out the immediate priorities to move the process forward. An acknowledgement was developed that the later projects would proceed. This process was done for each of the four categories. Nine major initiatives were developed from these four categories for priority consideration. At this point, for each of the major initiatives, the Cabinet would develop a concept plan. In each function area, the Cabinet would reform the Impact Groups into Action Teams. Each Action Team would consist of general citizens plus members of the Project Cabinet. Invitations had gone out to all of the citizens to rejoin one of the four Action Teams. Members of the Project Cabinet had been designated as chair of each Action Team. The Action Teams had the responsibility to take the priority project~ and develop strategies to implement the project. Implementation would be a function of the appropriate board such as the Council, School Board or Chamber. 6City of Denton City Council Minutes February 28, 1995 Page 10 #5. The' Council received a report and held a discussion regarding the Cable T. V. Emergency Override System. Richard Foster, Public Information Officer, stated that the franchise agreement between the City and Sammons required Sammons to provide the City with an emergency alert system to broadcast an emergency message over the audio portion of all the cable television channels. This system had been installed at the emergency dispatch center at the Police Department and was currently operational. A set of guidelines for using the system had been prepared and reviewed and approved by the City Manager, the Deputy City Manager, the Police Chief and Fire Chief. The system would be tested once a month. All channels were wired except for the four pay for view channels and several new channels which were still in the process of being wired. With no further business, the meeting was adjourned at 9:10 p.m. Y S E~RETARY CITY OF DENTON, TEXAS ACC00257