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Minutes February 27, 1996228 CITY OF DENTON CITY COUNCIL MINUTES February 27, 1996 The Council attended a dedication ceremony on Tuesday, February 27, 1996 at 4:00 p.m. at the Owsley Neighborhood Park located at 2415 Stella Street, Denton, Texas. The Council convened into a Closed Meeting on Tuesday, February 27, 1996 at 5:15 p.m. in the Civil Defense Room. PRESENT: Mayor Castleberry; Mayor Pro Tem Biles; Council Members Brock, Krueger, Miller and Young. ABSENT: Council Member Cott 1. The Council discussed the following in Closed Meeting: A. Legal Matters -- Under TEX. GOV'T CODE Sec. 551.071 Be Real Estate -- Under TEX. GOV'T CODE Sec. 551.072 1. Discussed the acquisition of property for expansion of the City's landfill and wastewater treatment plant. Personnel/Board Appointments -- Under TEX. GOV'T CODE Sec. 551.074 1. Discussed the appointment and evaluation of the applicants for the position of City Manager. The Council convened into a Work Session on Tuesday, February 27, 1996 at 7:00 p.m. in the City Council Chambers. PRESENT: Mayor Castleberry; Mayor Pro Tem Biles; Council Members Brock, Krueger, Miller and Young. ABSENT: Council Member Cott 1. The Council held a discussion and gave staff direction concerning the schedule and selection process for selecting a City Manager. Tom Klinck, Director of Human Resources, stated that the Council had earlier reviewed the semi-finalist candidates. The job closed on February 16th with 83 applicants. The consultant narrowed the finalists to 15-20. At the March 19th Council meeting the applicants would be narrowed to five finalists and Council would finalize the final interview process and schedule. On March 20th a letter, with a comprehensive packet of information about Denton, would be sent to the finalists inviting them for an interview. March 27-30 would be the final interview process. There were two options dealing with the final Council ~i~us~ion. Option one would involve an all day panel interview with the full Council with each finalist having an hour and fifteen minute discussion. The second option involved individual interviews with each City Council member for about 30 minutes. In the afternoon 22,9 City of Denton City Council Minutes February 27, 1996 Page 2 there would be a panel interview with each finalist for about 40 minutes. In the evening, the Council would begin deliberations to chose the top one or two candidates. Jerry Oldani stated that with the second option each Council Member would meet with the candidates on a one-on-one basis. After that there would be a short panel session in the afternoon. There would be a social setting to meet the candidates, an individual session and a panel session for meeting with the candidates. The second option was more taxing but allowed for better one-on-one meetings. Council Member Krueger felt that it would be hard to work the option allowing for one-on-one with the candidates. Each Council Member might receive a different answer to each question. He felt it was imperative for the Council to be together. All Council Members would be choosing the City Manager and all should be together to hear the questions and answers. Council Member Brock asked if it was common to have a group of finalists in a common social setting. 01dani stated that it was quite common in the private sector especially with volunteer Council/Board members. Council Member Miller felt that it would be helpful to spend time individually with each of the candidates and then meet as a group. The decision was a group decision but it would be helpful to have each member meet each individual candidate. He felt it would be more valuable to meet the individuals in a one-on-one situation. Mayor Pro Tem Biles felt that one-on-one time with the candidates would be critical for each of the Council Members to help formulate their decisions. He felt it would be better use of Council's time with a one- one-one situation with the candidates. It would also be valuable to have a panel approach. It would be good to see how the candidates functioned in each type of situation. Council Member Brock felt a mixture of the two approaches would be valuable. Council Member Krueger stated that he would like to hear the answers of each candidate at the same time as opposed to only hearing the answers of one candidate at a time. Brock motioned, Miller seconded to proceed with option two. On roll vo~e, Miller "aye", Young "nay~t , ~rueger t~nay~ , Brock ~aye~ , Biles "aye", and Mayor Castleberry "nay". Motion tied with a 3-3 vote. 230 City of Denton City Council Minutes February 27, 1996 Page 3 Council Member Krueger expressed a concern about keeping in the time frame with Option one. Oldani stated that in order to maintain a sense of fairness, the Council would need to keep equity in the situation. Council would need to keep within 10-15 minutes of the proposed time schedule. After further discussion, Mayor Castleberry stated that Option two was the consensus of the Council. 2. The Council received an update from the Public Utilities Board, held a discussion on the development of an in-fill policy for the extension of water and wastewater service and gave staff direction. Bob Nelson, Executive Director for Utilities, stated that this discussion centered on a possible change in the philosophy on how water and wastewater lines were extended in the community. Denton operated in a very similar fashion to other communities in Texas. Private property owners and the private sector extended the water and wastewater lines from the nearest existing line across their property. There was only one exception to that criteria which was the plan line concept. That concept set aside $250,000 each year for water lines and $250,000 for wastewater lines in a fund for economic development purposes. Mayor Pro Tem Biles left the meeting. Nelson stated that those funds were used to extend the lines across the property. At times small pockets in a community did not receive water and wastewater services due to the way the area was developed. After receiving several requests from citizens and property owners in areas where there were no lines, the Public Utilities Board developed concepts for these areas. Howard Martin, Director of Environmental Services, stated that the Board felt that one of the first items to discuss was how to fund an infill program. Options included utilization of excess development plan line funding which was $250,000 each year for both water and wastewater; allocation of 1-2 percent of the gross revenues each year; allocation of a fixed amount of money each year; allocation of funding between residential and commercial; and no allocation. The Public Utilities Board was recommending the utilization of excess development plan line money with no distinction at this time between residential and commercial projects. The types of projects eligible for funding included residential and commercial projects located within the City limits. The projects would be internal to the utility service area. Funding issues for the residential projects included upfront funding by the City for all costs; a fixed participation percentage with the city's percentage at 75% and the resident percentage at 25% with 100% participation from those residents who would benefit from the infill project; and a 2.31 City of Denton City Council Minutes February 27, 1996 Page 4 repayment plan over a 5-10 year period. Commercial funding issues included having the developer pay the upfront costs or a sliding scale of up to 50% of the City funding. Project identification and evaluation included that the projects would be evaluated as submitted. Evaluation criteria included costs per connection, environmental and health concerns; location within the service area; and growth potential. On the commercial side projects would be pre-selected; project cost, utility revenue potential, municipal service requirements, tax revenue potential, and enhancement of the utility system would be considered. General issues associated with the proposal, dealt with further deviation from the existing policy of developer-funded infrastructure extensions; enhancement of property values along the infrastructure extension in which the property owner did not participate in the infill project; property owners within the project being able to connect at a later date and not sharing in the cost. Existing customers who supported the cost of infrastructure improvements in the cost of their lots would be paying for the improvement to those customers who had not supported the utility. Associated legal issues included whether or not this approach violated the "gift" provision; could a repayment plan for residential projects be established; and could infill project extensions be restricted to customers within the core service area. Financial issues included the impact on customer rates, and the exclusion of capital assets from "return on investment" calculations. The utility operation and capital improvements were supported entirely from utility customer user charges. Mayor Pro Tem Biles returned to the meeting. Council Member Brock asked for the cost of completing all infill areas. Martin replied that staff was in the process of completing those figures. Council Member Brock asked if there might be possible liability of not granting equal protection of the laws. Martin replied that that was an issue which the Legal Department was investigating. City Attorney Prouty stated that the law required that rates and charges had to be equal, uniform and non-discriminatory. There had to be a good reason for a difference in rates. Council Member Brock asked if there was a legal reason why residential customers were not able to repay over a period of time, through extra charges on their u%ili%y bills. City Attorney Prouty stated that the problem with that was it was characterized as a lending of the City's credit. Staff was still 232 City of Denton City Council Minutes February 27, 1996 Page 5 researching that type of provision. It could be done if it fostered economic development and would be easier to do with a developer. There was no specific provision which allowed a city to lend credit to residential customers. If the city could develop a public purpose, it might be possible. Staff was investigating to see if there was some valid public purpose which would be served to allow a repayment or extension of the cost over a period of years. Mayor Pro Tem Biles asked about those customers not wanting to initially sign up but then later wanted to tie into the system. Martin stated that that was why the Public Utilities Board was recommending a 100% participation rate. Mayor Pro Tem Biles stated that if 25 residents had to agree and only one could not participate, when the last person wanted to sign on, that person should pay an equal amount to what the others who initially signed up. Martin replied that he was not sure that could be done as it might qualify as an impact fee. Council Member Miller stated that if all the economic development funds were used in a given year, then there would be no funds that year for the infill project. Martin replied correct, however, there was a reserve which could be used. Council Member Miller asked if there would be a limit on the infill dollars to $250,000 and not take down the reserves. Martin replied that the recommendation was to just use the $250,000 in development plan lines for that year and not use the reserve for the infill projects. Council Member Miller asked if other cities were doing this. Martin replied that most cities had gone to impact fees. Council Member Miller asked if the only fair means was to have 100% participation, was it possible to assume that each property would be assessed the 25% and place a lien against the property. City Attorney Prouty stated that many of the properties would be homesteads and it wa~ not po~sibl~ to a~ li~n~ on tho~ prop~rti~. To have a valid lien, after the assessment, the residents with homesteads prior to starting the improvements would have to sign a mechanics lien contract. 233 City of Denton City Council. Minutes February 27, 1996 Page 6 Council Member Miller asked who would submit the projects for consideration. Martin stated that a group of neighbors would make a request to the Public Utilities Board. A memo of understanding would be sent out to the residents to see how many would be willing to participate in the project. Some type of a contract would be completed with those individuals. Council Member Miller stated that the requests would come from the neighborhood or area which would be initiated by the citizens and not by the City. He asked who would select commercial projects. Martin stated that staff would put together the pre-selection for the core service area. City Attorney Prouty stated that there was a general provision which allowed for economic development procedures which could not be done with a general citizen. There also was the issue of impact fees. If it was an existing development, there was no question of impact fees. If it was new development, it would depend on whether the lines were on-site or off-site lines. There was a general exemption that it was not an impact fee if it was an on-site line. Council Member Krueger stated that if an industrial park developed on the edge of the city limits, the city would pay to have the lines extended to the property and the developer would pay for the on-site lines. Would the households, currently not on the existing lines, be charged for that extension. Nelson stated in the case where a developer extended the line to his property, a residence would be charged a pro rata fee as it connected onto the line. If the City were to extend the line, then each household could tie on without a charge. ~ Council Member Krueger stated that if it were done as an incentive for a developer, then there would be no charge for the residents along the line. Nelson replied correct. Mayor Pro Tem Biles stated that if it cost $150,000 to run an infill line and there were 25 homes which wanted to add on, with a 100% participation rate, it would cost $37,500 for the homeowners. If only 20 homeowners added on, the cost per homeowner would be $1875 instead of $1500. He questioned why a non-participating resident who de~ided to add on during the next year, would not have the same cost as the other residents. 234 City of Denton City Council Minutes February 27, 1996 Page 7 City Attorney Prouty stated that that might be possible but there was a need to look at the question in the context of having rates which did not differentiate among different property owners. Mayor Pro Tem Biles stated that if a person did not add on at first, he still could add on whenever he wanted but he would have to pay the same amount of money as the others did initially. City Attorney Prouty stated that it probably would be valid to assess some sort of additional charge for people who refused to participate in the beginning and then later decided to participate. Mayor Pro Tem Biles stated that it would not be equal if those who came later did not pay. Nelson stated that those individuals who initially paid could form a partnership. The City could enter into a pro rata agreement with them. There was a need to be careful that this not be considered an impact fee. City Attorney Prouty stated that the distinction was that existing properties which needed to be infilled would not have an impact fee question because impact fees dealt with new development. Council Member Young asked if the City could pay 90% with the residents having 10 years to pay their 10% to the City. City Attorney Prouty stated that that again was in the area of a gift or lending a credit. The City could pay 90% and the property owners pay 10% but then there would be the question if that was a gift to the residential property owners. There was more likely to be a lending credit problem if the City allowed 10 years to repay than if it allowed 10 months to pay out. Council Member Young felt that the policy should be that the city pay 90% and the residents pay 10% with up to 10 years to pay back on their utility bills. The City needed to provide those services to those residents annexed into the city without City services. Mayor Ca~tleberry stated that there were many unanswered questions which the Public Utilities Board was still discussing. Staff needed to continue to develop further options. 3. The Council received a report, held a discussion and gave staff direction regarding the establishment of a public/private partnership fQr ~h~ implementation of recycling activities identified in the Solid Waste Master Plan. Council Member Young left the meeting. 235 city of Denton City Council Minutes February 27, 1996 Page 8 Howard Martin, Director of Environmental O~erations, Stated that during budget discussions Council was interested i~ looking at a public/private relationship for the provision of recycling services. A "request for qualifications" had been established and approved by the Public Utilities Board with the intention to use the Solid Waste Master Plan for issues which needed to be addressed in a "request for proposal". The waste diversion rates would be used as a primary issue. It was hoped that input would be received from various entities interested in providing recycling services. Those proposals would be narrowed to 3-5 firms and then have the Public Utilities Board receive presentations from those firms. Based on the proposals andthe individual activities identified for the City, the Public Utilities Board could focus on what activities could be started under a competitive bid situation. Council Member Miller questioned a request for other services such as automated residential curbside solid waste collection, street sweeping, etc. Martin replied that staff was interested in the waste diversion rate. Was the firm capable of providing the rate desired. Also was the firm capable of providing other services if the City wanted to expand the scope of the work. Staff was focusing on recycling activities but wanted to know what other services could be provided. Council Member Young returned to the meeting. Council Member Brock felt that there was an assumption that a decision had been made that many of the activities would be privatized. She did not know when Council made that decision. Some Council Members were interested in that procedure but Council had not finalized that procedure. Martin replied that the Public Utilities Board as trying to keep all options open and investigate all options available. Council Member Brock asked what was the difference between a request for qualifications and a request for proposal. Martin replied that the City could not bid a request for proposal similar to a professional services contract for engineering. Solid waste services had to be in a competitive bid process. The "request for qualifications" was a way to get companies interested in presenting their capabilities of their firms to the Public Utilities Board in such a way to use the document to develop a short list so that if they were not part of this process, they would not be allowed to competitively bid the services recommended to the Council. City Attorney Prouty stated that this process would pre-qualify bidders. This was a concept used by the Department of Transportation for large 236 city of Denton City Council Minutes February 27, 1996 Page 9 projects or complex projects. This procedure was not applicable to every project but appeared to apply in this case. Once developed, a short list would go out for competitive bidding. Council Member Krueger asked for the number of cities in the surrounding areas which had public/private contracts to give an idea of what other cities were doing and the cost involved. 4. The Council received a report, held a discussion and gave staff direction regarding an upcoming bond sale and the refinancing of the Lake Ray Roberts debt. Harlan Jefferson, Director of Treasury Operations, stated that two bond sales had been scheduled for the near future. One sale would issue general obligation bonds and certificates of obligation. He presented a listing of the items which would be included in the general obligation bonds and the certificates of obligations which were included in the agenda back-up materials. The second bond sale would be a refinancing of the Lake Ray Roberts debt. Two issues were being done as the refinancing was very complex plus the magnitude of the amount. The City's financial advisors suggested splitting the two sales. A bond trip had been scheduled for March 21-22. Staff needed to know who on Council would be going on the bond trip. Bob Nelson, Executive Director for Utilities, stated that in 1980 the city of Dallas and the City of Denton entered into a contract for the Ray Roberts reservoir. Denton's share was 26% of that facility. The interest rate when Denton entered into the contract was 7.21%. Today the interest rate was much better and was calculated at 5.4% for the first portion. Debt could only be issued which was necessary to cover what the city was already paying on. That portion which the City was not paying on could not be refunded. The debt could be issued now and taken out when starting to pay for the future use. The proposed change would be less than a 30 year debt as opposed to the current 50 year debt. Gross savings was estimated at $90 million. In the first two years, more debt service would be paid on the refunding than what was currently paid. In the following 23 years, the City would pay approximately $100,000 more which would be absorbed. In the future, rates would be lower with this proposal. Frank Medanich, First Southwest Company indicated %ha% in%erect rates had declined and that this would be a good time to begin this process. Gross savings was estimated to be $90 million. Mayor Castleberry asked which Council Members would like to attend the bond trip. Council Member Brock indicated that Mayor Pro Tem Biles and she would like to go if Council could send two representatives. 237 City of Denton City CouncilMinutes February 27, 1996 Page 10 Consensus of the Council was to have Mayor Pro Tem Biles and Council Member Brock attend the trip. 5. The Council received a report, held a discussion and gave staff direction regarding the proposed Debt Service Management Policy. Harlan Jefferson, Director of Treasury Operations, stated that the Debt Management Policies would provide comprehensive guidelines for the financing of capital expenditures. The objectives of the policy were that the city obtain financing only when necessary, identify a process for the timing and amount of debt or other financing to be as efficient as possible and obtain the most favorable interest rate and other costs. Consensus of the Council was to proceed with a resolution for consideration on this issue. 6. The Council received a report, held a discussion and gave staff direction regarding the JTPA Program. Tom Klinck, Director of Human Resources, stated that staff had researched a report regarding JTPA and the implications should the program not be funded by the Federal government. The JTPA program was started in 1983 and replaced the CETA programs. It established programs to prepare youth and adults facing serious barriers to employment by providing job training and funds for work opportunities. It benefited the community by increasing employment and wages, increasing the education and occupational skills of participants and decreasing welfare dependency. The JTPA program was administered under the North Central Texas Council of Governments, the Private Industry Council and the North Texas Education and Training Co-op. In 1995 Denton had 23 sponsoring employers for 94 students at a cost of $133,980 for 10 weeks. Student benefits for those in the program included job knowledge and skills, work skills and expectations, and social ~kills and responsibility. Employer benefits included free labor, the completion of special projects, the training and development of future employees and leaders and a help to the community. If not funded by the Federal government, the impact would be that labor would not be available for work activities, there would be a lost opportunity to assist disadvantaged youth; possible high school drop outs; adverse, unproductive behaviors which would require the community to deal with the individuals through the juvenile or criminal justice system. Council Member Krueger asked how soon a decision would have to be made for the program. Lloyd Wabb, North Te~a~ Eduoation and Training Co-op, Inc., stated that normally the program was started in February/March to identify work sites. The quicker the planning was started, the quicker the implementation of the program. 238 city of Denton City Council Minutes February 27, 1996 Page 11 Council Member Young asked that if the program were funded would it be just for City participants. Klinck replied that if City funds were used, it would be for city positions. Acting City Manager Svehla stated that one issue for staff was the funding if Council wanted to continue the program. This program was not funded for as the program was funded through Federal funds in the past. If Council decided to proceed with the program, it would have an impact on the reserves of approximately $120-130,000. Council Member Miller stated that the cost for the city program would be approximately $70-80,000. Krueger motioned, Young seconded to explore avenues of funding in the budget to finance this program for the city without going into reserves. Council Member Miller suggested an addition to the motion to encourage the JTPA staff work with other agencies to encourage them to do the same until it was known what would happen with the program. Krueger and Young agreed to the addition to the motion and second. Mayor Pro Tem Biles felt that the reserves should not be used given the slide in the sales tax revenue. The reserves might be needed if the sales tax did not come up. On roll vote, Miller "aye", Young "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. 7. The Council received a report, held a discussion and gave staff direction concerning the Development Policy Committee. Council Member Krueger left the meeting. Frank Robbins, Director for Planning and Development, stated that staff was needing direction on the list of names which would be included in the draft resolution for Council consideration. If the Council passed the resolution at a later meeting, it would appoint the committee and charge them with the previously approved program. Nominations had been received from all other entities. The Council had ten nominations, seven neighborhood representatives, two Council Members and a chairperson. Mayor Pro Tem Biles stated that the back-up indicated that staff was aware of six names submitted to Council for appointment a~ neighborhood representatives. He had not seen those six names. 239 City of Denton City Council~Minutes February 27, 1996 Page 12 Robbins stated that staff understood, from individuals who had submitted names, that the list was submitted. Acting City Manager Svehla stated that staff understood that Council wanted people to recommend to one or all of the Council who they thought those representatives should be. Staff did not solicit names and understood that the individuals or groups would meet with one or all of the Council with nominations. Council Member Krueger returned to the meeting. Council Member Miller suggested that during.~he next week, each Council Member be responsible for appointing someoneat the next meeting within the spirit of neighborhood representation. Mayor Castleberry asked which Council Members wanted to be on the committee. Council Member Miller recommended Mayor Pro Tem Biles and Council Member Brock to serve on the committee. Council Member Krueger recommend Council Member Young instead of Mayor Pro Tem Biles due to his schedule. Council Members Brock and Young agreed to serve on the committee. Mayor Castleberry stated that Council needed to decide whether these would be nominations or appointments. Mayor Pro Tem Biles stated that Council had already decided that these would be appointments. Council Member Krueger asked for the difference between a nomination and an appointment. Mayor Pro Biles stated again that Council had already decided that these were appointments as per prior discussion. Miller motioned, Young seconded that each Council Member make an appointment at the next meeting. Council would have a list of nominees from staff but Council would appoint someone from neighborhood groups. Krueger motioned, Young seconded to amend the main motion to have nominations rather than appointments. On roll vote of the amendment, Miller "nay", Young "aye", Krueger "aye", Brock "nay", Biles "aye", and Mayor Castleberry "aye". Motion carried with a 4-2 vote. 24O City of Denton City Council Minutes February 27, 1996 Page 13 On roll vote of main motion as amended, Miller "aye", Young "aye", Krueger "aye" Brock "nay" Biles "aye" and Mayor Castleberry "aye" Motion carried with a 5-1 vote. Young motioned, Krueger seconded to nominate the chair of the committee. On roll vote, Miller "aye", Young "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. Following the completion of the Work Session, the Council convened into a Special Called Session in the City Council Chambers. PRESENT: Mayor Castleberry; Mayor Pro Tem Biles; Council Members Brock, Krueger, Miller and Young. ABSENT: Council Member Cott 1. The Council considered adoption of an ordinance canvassing the election results of the February 24, 1996 City of Denton Bond Election. Mayor Castleberry read the results of the bond election per proposition. The following ordinance was considered: NO. 96-046 AN ORDINANCE CANVASSING ELECTION RETURNS OF THE BOND ELECTION HELD ON FEBRUARY 24, 1996 AND PROVIDING FOR AN EFFECTIVE DATE. Biles motioned, Krueger seconded to adopt the ordinance. On roll vote, Miller "aye", Young "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. 2. The Council considered appointments to the Diversity Task Force. Council Member Krueger appointed Teri Rheault to the Diversity Task Force. The Council reconvened into a Closed Meeting to discuss the following: A. Legal Matters -- Under TEX. GOV'T CODE Sec. 551.071 B. Real Estate -- Under TEX. GOV'T CODE Sec. 551.072 1. Discussed the acquisition of property for expansion of the City's landfill and wastewater treatment plant. C. Personnel/Board Appointments -- Under TEX. GOV'T CODE Sec. 551.074 241 City of Denton City Council Minutes February 27, 1996 Page 14 Discussed the appointment and evaluation of the applicants for the position of City Manager. With no further business, the meeting was adjourned. CITY OF DENTON, TEXAS BOB CASTLEBERRY, MAYOR/ CITY OF DENTON, TEXA~ ACC002F0