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
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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.
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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
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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