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
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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.
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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
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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
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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.
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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.
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February 27, 1996
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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.
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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
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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.
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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.
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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.
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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.
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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
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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