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Minutes April 9, 1996302 CITY OF DENTON CITY COUNCIL MINUTES April 9, 1996 The Council convened into a Closed Meeting on Tuesday, April 9, 1996 at 5:15 p.m. in the Civil Defense Room of CitY Hall. PRESENT: Mayor Castleberry; Mayor Pro Tem Biles; Council Members Brock, Cott, Krueger, Miller and Young. ABSENT: None 1. The Council convened into a Closed Meeting to discuss the following: A. Legal Matters -- Under TEX. GOV'T CODE Sec. 551.071 1. Considered settlement of Carreiro claim. B. Real Estate -- Under TEX. GOV'T CODE Sec. 551.072 Discussed the acquisition of property for expansion of the city's landfill and wastewater treatment plant. Ce Personnel/Board Appointments -- Under TEX. GOV'T CODE Sec. 551.074 Deliberated and considered the appointment of the Board of Directors of the Economic Development Corporation of Denton, Inc. The Council convened into a Work Session on Tuesday, April 9, 1996 at 6:00 p.m. in the City Council Chambers of City Hall. PRESENT: Mayor Castleberry; Mayor Pro Tem Biles; Council Members Brock, Cott, Krueger, Miller and Young. ABSENT: None 1. The Council received a report, held a discussion with staff, the consultant, and the Planning and Zoning Commission concerning the re-write of the zoning ordinance. Frank Robbins, Director of Planning and Development, stated that there w~re a number of detail~ to work through on this i~sue. Since 1989 there had been a number of amendments to the zoning Ordinance. One of the recommendations of the Planning and Zoning Commission was to continue to phase in the rewrite. Summary - Mixed Use Districts, grandfathering zoning, bufferyards, and phasing. Recommendations from the Planning and Zoning Commission included that Phase I should continue to review the re- write and incorporate no-glare standards into the current supplementary regulation section and refer the mixed use district 303 City of Denton City Council. Minutes i.? i~' April 9, 1996 Page 2 to the Development Policy Committee. Phase II suggested that after the Planning and Zoning Commission made a Phase I ordinance recommendation, it begin to revise the landscape ordinance including bufferyard standards, requiring bufferyards for all new development in five years and review new non-residential districts using the new standards. Phase III included that the Development Policy Committee would make the MDX and DDP policy recommendations to the Planning and Zoning Commission and the Council. Mayor Castleberry indicated that the Council could not take a vote on these items but could take a consensus. Robbins stated that without Council objection, staff would write the ordinance as proposed. Consensus of the Council was to proceed with the summary recommendations as noted above. Issue (4) Planned Development. Staff was proposing to follow all eight recommendations as noted on Page 23-24 in the agenda back-up information. Recommendation 7 and 8 dealt with expiring planned development districts and old planned development districts which were undeveloped. One issue dealt with how long a development plan or a detailed plan would be good. The current standard was ten years. If the planned development was not developed over that period of time, that type of zoning might be a problem for adjoining development and would be out of context in the future. It had been suggested to shorten that period of time to ten years for a development plan and a detailed plan to two years. Once any part of the development plan or detailed plan was built it would be good forever and could not expire. Mayor Castleberry asked if the ten years was a recommendation of the Planning and Zoning Commission. Robbins stated that the Commission had not made a recommendation at this point in time. A concept plan or development plan currently was good for ten years unless a detailed plan was submitted. If a detailed plan was not submitted, it expired in ten years. The issue was to decrease that amount of time. A detailed plan, when approved, was good for two years before something was built on it. After two years, if anything was built, the plan would stay in effect permanently. The issue was should any part of the undeveloped detailed plan continue to expire. Bob Powell, Planning and Zoning Commission, stated that the Commission did not take a vote on this issue but there was a consensus that the current time frames were appropriate. 3O4 City of Denton City Council Minutes April 9, 1996 Page 3 Mayor Pro Tem Biles stated that once construction or improvements had been placed on a detailed plan, then the entire plan had a permanent application. He questioned the paragraph dealing with inappropriate zoning and the requirement of a super majority vote of the Council if protested by 20% of the land within the area. Robbins replied that State law indicated that if 20% of the land within the area being zoned protested that rezoning, a super majority of Council was required or if 20% of the land within 200 feet was protested by the owners. Consensus of the Council was to follow the ten-two plan. Issue (5) Design Guidelines. Staff recommendation was to delete the Design Guidelines as written from the zoning ordinance re-write. Some of the guidelines would be added into the Planned Development section as detailed plan criteria as recommended by the consultant. Consensus of the Council was to proceed with the recommendation. Issue (6) - Historic Landmark Ordinance. The Historic Landmark Commission recommended that no changes be made at this point in time and may make recommendations at a later date. Consensus of the Council was to accept the recommendation. Issue (7) - Farms in SF, 2F and MF districts. The staff recommendation was to regulate directly the impacts of animals. Farms and ranches, including grazing, would be allowed in most zoning districts as was done now and to make no change to the current standards. Consensus of the Council was to proceed with the staff recommendation. (8) Cumulative residential zoning. The issue was if single family homes should be allowed in a multi-family and manufactured housing district. The staff recommendation was to make no change in the current regulations. Consensus of .the Council was to proceed with the staff recommendation. Issue (9) Cumulative non-residential zoning. The issue was if low intensity non-residential uses would be allowed in the new Heavy Environmental Impact district. The staff recommendation was to delete some uses and develop new non-residential districts with narrower and shorter lists of less cumulative, more compatible 305 City of Denton City Council Minutes April 9, 1996 Page 4 permitted uses as part of Phase II. Mayor Castleberry stated that the Planning and zoning Commission had not had the opportunity to discuss the last several recommendations. Robbins replied correct. Mayor Pro Tem Biles stated that on the issue of whether to allow a single family home in a multifamily district, his opinion way that if an individual wanted a detached home in a multifamily area, he should be allowed to do so. It was di£ferent if an individual wanted to place apartments in the middle of a single family detached area. Consensus of the Council was that the Council was not interested in the recommendation to narrow the current regulations. Issue (10) Heavy Environmental Impact zoning adjacent to residential zoning. Staff's recommendation was that if the Heavy Environmental Impact zoning classification was sought for a tract of land adjacent to a residential use or district, the City should impose conditions and restrictions on such pursuant to the provisions contained in the conditioned zoning section. Consensus of the Council was to proceed with the staff recommendation. Issue (11) - Major activity center Denton Development Plan, Single Family policy and the Central Business district's permitted uses. Staff was recommending to continue to allow single family use in that unique area of the downtown area. Consensus of the Council was to proceed with the staff recommendation. Issue (12) - Specific use permits. The current ordinance required the same public hearings and notice to landowners within 200 feet before Planning and zoning Commission and in the newspaper before Council's pubic hearings, the same way as for a rezoning amendment. Staff recommendations were to clarify the ordinance that SUP's were not zoning map changes or rezonings, continue the current decision making process with notice, state that the super majority rule did not apply and state that a denied SUP could not be considered again for 12 months unless a more restrictive SUP was applied for, or Planning and Zoning Commission or Council found that conditions changed from those at the time of the earlier application. 306 City of Denton City Council Minutes April 9, 1996 Page 5 Mayor Pro Tem Biles stated that he liked the original recommendation that the super majority rule did not apply on a specific use permit because a specific use permit was not a zoning change. Council Member Brock stated that technically a specific use permit was not a zoning change. If that use went away, the land retained the original zoning. However, a specific use permit did have the same impact as a zoning change. She asked what the State law indicated in this area. Terry Morgan, consultant for Morgan, Freilich, Leitner and Carlisle, stated that State law was silent on the particular impacts on what to do in terms of a specific use permit. He knew of nothing to distinguish a specific use permit from a zoning amendment as it might just as well be called a zoning amendment. The problem with that was that it could be challenged as spot zoning. Robbins stated that staff was recommending that the super majority would apply for specific use permits. Consensus of the Council was to keep the language as suggested by staff. Issue (13) - Number of members on the Board of Adjustment. The staff recommendation was to continue the existing membership number, appoint two alternates as ex-officio members who would attend all meetings, and delegate by ordinance that alternate members would serve in the absence of a regular member at the request of the chair, rather than the Mayor or City Manager. Mayor Pro Tem Biles stated that there were a number of boards and commissions on which certain Council Members did not have an appointment. He asked for more information and discussion about having a seven member Board of Adjustment. Consensus of the Council was change to the membership number to seven members. Issue (14) - Changes to Non-Conforming uses. The current ordinance allowed the Building Official or the Board of Adjustment to allow a more restrictive but still non-conforming use to occur in a non- conforming building, but with different conditions. The staff recommendation was to retain the Building official's authority but with the more detailed conditions and change the 50% damage rebuild section. 3O7 City of Denton City Council..Minutes:;'~i~'i~~ April 9, 1996 Page 6 Consensus was to proceed as recommended. Issue (15) Non-Conforming Abandonment. since the Zoning ordinance Task Force made its recommendations, staff discovered a problem with the current criteria for determining whether non-conforming use rights were lost. The current criteria required intent to abandon as a necessary criteria for loss of non-conforming rights. The intent of an owner could for many reasons be impossible to discern or it might change. The consultant recommended that whenever a nonconforming use was abandoned, all nonconforming rights would cease and the use of the premises would be in conformance to the ordinance. A non-conforming use would be considered abandoned if the intent of the user or owner to discontinue the non-conforming use was apparent, the characteristic equipment and furnishings of the non-conforming use had been removed from the premises and had not been replaced by similar equipment within six months, the non-conforming building, structure, or land had remained vacant for a continuous six months, and the non-conforming use had been replaced by a conforming use. Consensus of the Council was to proceed with the recommendation. Issue (16) - Zoning change petition to Planning and Zoning Commission. Staff recommendation was to add the Planning and Zoning Commission to whom a petitioner could petition to for a zoning district or regulation change. Consensus of the Council was to proceed with staff recommendation. Issue (17) Denied rezoning waiting period conditions. Staff recommendation was to add to the planned development provision not to require a 12 month wait before submitting another application on property with a denied zoning case, more restrictive conditions of a conditioned zoning petition. Also, in a case where there was withdrawal after the Planning and Zoning Commission public hearing when the Planning and Zoning Commission recommended denial and there was no appeal to the Council, the 12 month wait would be triggered. The current ordinance stated that if the Planning and Zoning Commission recommended denial, the applicant must apply within ten days in writing for an appeal to Council. Morgan pointed out that the purpose of Issue #9 was to not impede economic development but was just the opposite. If an incompatible use was allowed in the heavy industrial area, those uses might try to keep out a heavy industrial use and if the heavy use was authorized, there could be complaints with that use. The land might be tied up with other uses if low intensity uses occupied the area first. 3108 City of Denton City Council Minutes April 9, 1996 Page 7 The Council convened into a Special Call Meeting on Tuesday, April 9, 1996 at 7:30 p.m. in the Council Chambers of City Hall. PRESENT: Mayor Castleberry; Mayor Pro Tem Biles; Council Members Brock, Cott, Krueger, Miller and Young. ABSENT: None 1. Presentation by Paul J. Cowan. Mr. Cowan stated that several weeks ago he was in eastern Kentucky and discovered a book entitled "It's Hard to Make a Living on a Mayor's Salary". He presented the book to Mayor Castleberry plus a cap from the City of Olive Hill, Kentucky. 2. The Council considered a request for exception to the noise ordinance for the Denton Gospel Mission on Thursday, April 11, 1996, from 6:30 p.m. until 12:00 midnight. Veronica Rolen, Administrative Assistant, stated that the Denton Gospel Mission was requesting an exception to the noise ordinance for April 11, 1996. Their event was scheduled to take place on Fry and Hickory Streets from 6:30 p.m. to midnight. There was a street closure associated with six parking spaces in which all of the property owners had signed in favor of the closure. Krueger motioned, Young seconded to approve the request. On roll vote, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. Item #9 was considered. 9. The Council received recommendations and annual report from the Juvenile Crime Interagency Coalition. Margaret Smith, Chair, stated that the Coalition had a requirement to provide an annual report to Council. The Coalition had had great successes in th~ past year. Tom Josey, Court Administrator, stated that the Coalition was making a recommendation to the Council to execute an agreement with "Contracts and Bonuses" which was a counseling program for juveniles. Funding should be coming from a grant program. The Coalition also recommended to continue to search for grant sources, programs and ideas. The combining of two groups currently servicing juvenile programs was suggested and the Coalition asked the Council to defer appointing members until the Coalition had a 309' City of Denton City CounciL~Minutes~, ~ April 9, 1996 Page 8 recommendation on how to combine the tWO groups. The Coalition secured a Title V grant for juvenile preVention and the two grants received would service juveniles for twoyears. Total grant money to be received was approximately $399,000 which were external funds. By leveraging the County, City and DISD cooperation, facilities were used which would not cost the program but for which the internal component value was $300,000. The Council returned to the regular agenda order. 3. Public Hearings A. The Council held a public hearing and considered adoption of an ordinance to rezone 0.9485 acres from the Single Family 7 (SF-7) zoning district to the Commercial (C) zoning district and Multi-Family i (MF-1) zoning district. The property was located on the north side of Dallas Drive, at the intersection of Cook Street. Z-96-009 (The Planning and Zoning Commission recommended approval ?-0. ) Frank Robbins, Director for Planning and Development, stated that this was a rezoning to the commercial and multi-family district. It was anticipated that the property would be used as an auto parts supply store. This proposal was in a low intensity area but given the adjacent uses and because the infrastructure was in place, the Planning and Zoning Commission recommended approval. The Mayor opened the public hearing. Joe Dodd stated that this item was incorrectly shown on the zoning map as commercial. The back-up information indicated that the official zoning map would be changed to show the correction in the zoning classification. He hoped that this indicated that someone was reviewing the zoning map and was preparing an official zoning map of the City. ~ Rob Rayner stated that the petitioners had a neighborhood meeting with individuals in the area. An Auto Zone would be built on the property. The Mayor closed the public hearing. The following ordinance was considered: 310 City of Denton City Council Minutes April 9, 1996 Page 9 NO. 96-087 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, PROVIDING FOR A CHANGE FROM THE SINGLE FAMILY 7 (SF-7) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION TO THE COMMERCIAL (C) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION FOR 0.9382 ACRES OF LAND, AND FROM THE SINGLE FAMILY 7 (SF-7) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION TO THE MULTI- FAMILY 1 (MF-1) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION FOR 0.0103 ACRES OF LAND LOCATED ON THE NORTH SIDE OF THE INTERSECTION OF DALLAS DRIVE AND COOK STREET; PROVIDING FOR A PENALTY IN THE MAXIMUM AMOUNT OF $2,000.00 FOR VIOLATIONS THEREOF; AND PROVIDING FOR AN EFFECTIVE DATE. Krueger motioned, Young seconded to adopt the ordinance. On roll vote, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. B. The Council held a public hearing and considered adoption of an ordinance to rezone 3.1176 acres from the Agricultural (A) zoning district to the Commercial (C) zoning district. The property was located on the north side of University Drive (US 380), 580 feet west of Cooper Creek Road. Z-96-006 (The Planning and Zoning Commission recommended approval 7-0.) Frank Robbins, Director for Planning and Development, stated that this was zoning for the existing use. There was a need for expansion on the property and it was discovered that the property was actually zoned agricultural. There was no opposition to the proposal. The applicant would not make a presentation but was present if there were any Council questions. The Mayor opened the public hearing. No one spoke during the public hearing. The Mayor closed the public hearing. The following ordinance was considered: NO. 96-088 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, PROVIDING FOR A C~L~NGE FROM THE AGRICULTURAL (A) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION TO THE COMMERCIAL (C) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION FOR 3.1176 ACRES OF LAND LOCATED ON THE NORTH SIDE OF UNIVERSITY DRIVE 311 City of Denton city Council Minutes April 9, 1996 Page 10 (U.S. 380), 580 FEET WEST OF COOPER!CREEK ROAD; PROVIDING FOR A PENALTY IN THE MAXIMUM AMOUNT OF $2,00.00 FOR VIOLATIONS THEREOF; AND PROVIDING FOR AN EFFECTIVE DATE. Young motioned, Krueger seconded to adopt the ordinance. On roll vote, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. C. The Council held a public hearing and considered adoption of an ordinance to rezone 1.211 acres from the Single Family 7 (SF- 7) zoning district to the office Conditioned (O[c]) zoning district. The property was located on the west side of Hinkle Drive, approximately 500 feet south of Haggard Lane. Z-96-003 (The Planning and Zoning Commission recommended approval 7-0.) Frank Robbins, Director of Planning and Development, stated that this was an office zoning in a low intensity area but with conditions, the intensity allocation was on target. The conditions included that the use would be for professional and administrative offices only, there would be a fifty-five foot building and dumpster setback from the southern property line, and lighting would not directly illuminate adjoining property. The Mayor opened the public hearing. No one spoke during the public hearing. The Mayor closed the public hearing. The following ordinance was considered: NO. 96-089 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, PROVIDING FOR A CHANGE FROM THE SINGLE FAMILY 7 (SF-7) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION TO THE OFFICE CONDITIONED (O[c]) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION FOR 1.211 ACRES OF LAND LOCATED ON THE WEST SIDE OF HINKLE DRIVE, APPROXIMATELY 500 FEET SOUTH OF HAGGARD LANE; PROVIDING FOR A PENALTY IN THE MAXIMUM AMOUNT OF $2,00.00 FOR VIOLATIONS THEREOF; AND PROVIDING FORAN EFFECTIVE DATE. Young motioned, Brock seconded to adoPt the ordinance. On roll vo%e, Mille~ "aye", Young "aye", Cott "aye". Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. 312 city of Denton City Council Minutes April 9, 1996 Page 11 4. Ordinances A. The Council considered adoption of an ordinance authorizing the City Manager to execute a real estate contract between the City of Denton and Robert W. Callahan, James E. Callahan and Ann C. Stark. Acting city Manager Svehla stated that Council had considered this item in Closed Meeting and staff was recommending approval. The following ordinance was considered: NO. 96-090 AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A REAL ESTATE CONTRACT BETWEEN THE CITY OF DENTON AND ROBERT W. CALLAHAN, JAMES E. CALLAHAN AND ANN C. STARK; AUTHORIZING THE EXPENDITURE OF FUNDS; AND PROVIDING AN EFFECTIVE DATE. Biles motioned, Young seconded that the city offer to purchase the land for $575,000 total. It would be comprised of 151.2 acres flood plain at $1,500 per acre and 110.6 acres upland at $3,148 an acre for a total of $575,000. On roll vote, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. B. The Council considered adoption of an ordinance retaining Wayne Paul Frank to provide part-time Municipal Court prosecutorial services on certain dates between April 15, 1996 and May 30, 1996. city Attorney Prouty stated that Mr. Frank had resigned from the City Attorney's office but that this agreement enabled him to serve as a part-time prosecutor to back-up the full-time prosecutor. His salary would be $25 per hour. The dockets in Municipal Court for the rest of this month and for the next month were full and having this service would be very helpful. The following ordinance was considered: NO. 96-091 AN ORDINANCE OF THE CITY OF DENTON, TEXAS RETAINING WAYNE PAUL FRANK TO PROVIDE PART-TIME MUNICIPAL COURT PROSECUTORIAL SERVICES ON CERTAIN DATES BETWEEN APRIL 15, 1996 AND MAY 30, 1996; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. 313 City of Denton City Council Minutes April 9, 1996 Page 12 Young motioned, Cott seconded to adopt the ordinance. On roll vote, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. C. The Council considered adoption of an ordinance authorizing the Mayor to execute Amendment No. 3 to an agreement between the City of Denton, the Denton Chamber of Commerce, and the Economic Development Corporation of Denton, Inc. for the purpose of providing a program to promote economic development. City Attorney Prouty presented suggested changes to the contract from those in the back-up materials. Article 1, Section 1 of the agenda back-up amendment would transfer all of the economic functions from the Chamber under the contract to the new Economic Development Corporation with the exception of some marketing functions. The proposed change would transfer all economic development functions including all of the tasks set forth in the contract to the new Economic Development Corporation from the Chamber and then the EDC could contract with the Chamber to perform promotional and marketing functions or any other type of economic development functions with a limitation that the expenditures on promotional purposes would not exceed 10% of the EDC's revenues in accordance with that section of the Economic Development Act. A fourth change on page two carried that through and stated that the Chamber would, upon the formation of the EDC, transfer to it all funds previously approved in the city's budget for economic development. With the change from the agenda back-up contract there was a blank left in the contract whereby all but-a certain portion of the funds could be left with the Chamber for marketing purposes. He was not sure if the change in Section 8 of the resolution would require in the proposed Article i to indicate "shall" rather than "may". Mayor Pro Tem Biles stated that Section $ did refer to the resolution. The wording "shall" was conditioned on the fact that the sales and use tax election would pass. The version which was different from the agenda back-up materials indicated that promotional expenditures could not exceed 10% of the EDC's revenues. Promotional purposes was the marketing intent of the State statute on the sales tax. The way this was written was "of the EDC's revenues". It was his understanding that the State statute directed the 10% maximum for marketing purposes to the sales tax revenue which was different from all EDC revenues because the EDC might solicit private contributions and as such, did the City have the ability to place a 10% cap on private funds. 314 City of Denton city Council Minutes April 9, 1996 Page 13 city Attorney Prouty stated that that was not the intent. The definition indicated that promotional expenditures would not exceed 10% of the Corporation's revenues which was the EDC. That was not defined and he did not feel that that included private donations. The intent was that the EDC would initially be funded only with those municipal revenues from the public utility department to the EDC and not private contributions. The intent of the contract was to transfer municipal revenues and not private revenues which would remain with the Chamber. Mayor Pro Tem Biles suggested inserting a more descriptive phrase of the EDC's revenues "derived from the economic development sales tax or received directly from the City of Denton". That omitted any other sources of funding which the private sector might raise. There were two sources of funds currently on deposit at the Chamber. One source was dollars received directly from the City. The other source was private sector contributions. His concern was that the City could not compel the Chamber to take those private sector dollars and give them to the EDC. He asked where that protection was located in the amendment. City Attorney Prouty stated that that was covered in Section 4. That section indicated the Chamber would transfer to the EDC all funds previously approved in the City's budget for economic development. Mayor Pro Tem Biles expressed a concern because the City council's approval on an annual basis of that budget did incorporate into it dollars which were in an annual budget. He suggested using that same language in which the Chamber would transfer to the EDC all funds previously received directly from the City of Denton. The following ordinance was considered: NO. 96-092 AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE MAYOR TO EXECUTE AMENDMENT NO. 3 TO AN AGREEMENT BETWEEN THE CITY OF DENTON, THE DENTON CHAMBER OF COMMERCE, AND THE ECONOMIC DEVELOPMENT CORPORATION OF DENTON, INC. FOR THE PURPOSE OF PROVIDING A PROGRAM TO PROMOTE ECONOMIC DEVELOPMENT; AND PROVIDING AN EFFECTIVE DATE. Biles motioned, Young seconded to adopt Amendment No. 3 to the agreement between the City of Denton and the Denton Chamber of Commerce as submitted by the City Attorney with the following changes: #1 - Article 1, Section 1 would add language" from the EDC sales tax or received directly from the city of Denton". ~2 - city of Denton city Council Minutes April 9, 1996 Page 14 Article 3, Section 4 would include the Wording "received directly from the City of Denton for economic development purposes. Council Member Miller felt that to have funding in the Chamber of Commerce doing economic development and funding from the City going to the Economic Development Corporation diffused the issue. He did not see anything wrong with the EDC subcontracting with the Chamber for those items which the Chamber currently was doing. One group would be responsible for the economic development. He felt that the Chamber, as well as the City, needed to support the Economic Development Corporation. That Corporation would decided the best place to provide these services which right now was with the Chamber. The Corporation needed to subcontract with the Chamber for services. On roll vote, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. 5. Resolutions A. The Council considered approval of a resolution authorizing the creation of the Economic Development Corporation of Denton, Inc. as an instrumentality of the City of Denton; approving bylaws and articles of incorporation; and containing other provisions relating to the subject. Joe Dodd stated that a plan was being presented to establish an Economic Development Corporation and to fund the Corporation with a % cent sales tax. He still did not know how much the CEO would be paid, how big the staff would be and how much they would be paid, what they would be able to spend on consultants, where the office would be located, and what would be spent on that location. He did not know the long term goals of this organization. What kind of industry would they be trying to attract to Denton. He liked the prohibition of using City money to promote the sales tax election. He suggested a second question on the ballot asking if the voters approved of the EDC's existence. A voter could vote against the sales tax but vote for economic development. City Attorney Prouty stated that this resolution would authorize the creation of the Economic Development Corporation of Denton. A change was recommended in Section 8 which carried through the idea of transferring all the economic development functions that the Chamber had, once the EDC was formed, to the EDC. The EDC could contract with the Chamber to provide marketing services and other services to promote economic development. Another change included Section 2.01 which required the EDC rather than the Chamber to 3 3.6 City of Denton City Council Minutes April 9, 1996 Page 15 perform all the tasks and charges of Amendment Two and Three between the City and the Chamber. The by-laws in Section 10.01 would be changed to authorize the Board of Directors, either at a special or regular meeting, to make amendments to the bylaws. There was no authority for the City Council to initiate amendments to the bylaws. This change would allow, by affirmative vote of four or more members of the City Council, an amendment of the bylaws. The agenda back-up materials would not allow the City Council to make amendments to the bylaws but no amendment of the bylaws initiated by the Corporation would be effective until the City Council approved the amendment. Another change stated that the City Attorney would be the registered agent with the registered office in the City of Denton. The Council needed to appoint five members of the Board of Directors and had to appoint three incorporators who could be the same as the Directors. The initial office had been established at 215 E. McKinney. As per the bylaws and recommendations made by the Economic Development Transition Committee, the Council had the right to name up to 5 non-voting ex- officio members to the Board of Directors. It had been suggested that three of these five ex-officio members be the City Manager, and the volunteer head and staff head of the Chamber of Commerce. The bylaws made all members of the city Council ex-officio non- voting members. Council Member Miller felt that the section in the Articles of Incorporation which dealt with amendments gave the Council the opportunity to decide on what was going to happen in the corporation itself. He felt that for the bylaws to then only provide for the Board of Directors to do it would provide a situation whereby if the Council felt it needed to provide an amendment, it would not be able to do that. He felt it needed to be consistent between the two documents. Council Member Cott felt that there was no reason for the Council to be involved in this operation. There was no need for ex-officio members. Council should be kept out of the process. Council Member Miller stated that both documents provided for amendments and he felt there should be consistency between the two documents. The City would be held accountable for the dollars put into the corporation. Mayor Pro Tem Biles stated that the Articles of Incorporation provided for amendments by the Board of Directors who then obtained approval of those amendments by the Council or the City Council could amend the Articles of Incorporation at any time. He felt Council, rather than at its sole discretion at any time, should discuss any proposed changes with the Board of Directors. That City of Denton City Council Minutes April 9, 1996 Page 16 317 should be included in the Articles of Incorporation as well as in the bylaws. He suggested a change in the Articles of Incorporation to state that the City Council may, at its sole discretion, but only after obtaining the advise of the Corporation's Board of Directors, amend the Articles of Incorporation. By incorporating that particular phrase into both the Articles of Incorporation and the bylaws, the Council would demonstrate a trust of the Board of Directors to act in the best interest of the citizens. Council should not second guess the Corporation. The following resolution was considered: NO. R96-017 A RESOLUTION AUTHORIZING THE CREATION OF THE ECONOMIC DEVELOPMENT CORPORATION OF DENTON, INC. AS AN INSTRUMENTALITY OF THE CITY OF DENTON; APPROVING BYLAWS AND ARTICLES OF INCORPORATION; CONTAINING OTHER PROVISIONS RELATING TO THE SUBJECT; AND PROVIDING FOR AN EFFECTIVE DATE. Biles motioned, Young seconded adopt the resolution making a change to Section 8 of the resolution so that it was worded the way the city Attorney had just handed out indicating that until the sales and use tax election passed and the EDC was fully funded, the EDC shall contract with the Chamber to continue to provide marketing services and the services to promote economic development set forth in the Chamber contract as amended. That the Articles of Incorporation be adopted except for a change in Article 8 adding a clause "but only after obtaining the advice of the Corporation's Board of Directors" and striking the words "and at any time". That the bylaws be adopted adding to Section 10.1 the clause stating "after obtaining the advice of the Corporation's Board of Directors". The five members and ex-officio members would be a separate motion. Council Member Miller felt that the Council would still be dictating to the Economic Development Corporation. He felt this was inconsistent with the philosophy of the Corporation. Council Member Brock felt that there was support in the community for the EDC and for the sales tax. She still had reservations on some of the issues. There originally was a long list of duties in the bylaws which was changed so that the bylaws became very open ended. At the first report to Council by the Economic Development Transition Committee ~he had brought up the issue of accountability as she felt that that was the number one responsibility as elected officials. Even with appointing very knowledgeable people to this Board, the issue was one of being accountable to the citizens. At 318 City of Denton City Council Minutes April 9, 1996 Page 17 that first report, she had been assured that the bylaws and Articles of Incorporation were full of areas where the representatives of the citizens would have some control. Very methodically and persistently, quite a few of those had been removed. The Council had been taken out of the bylaws in many instances. It was down to the point of having an annual review in approving the budget and the program planned for that year. She felt it was possible to trust honorable people and still realize the need to be daily accountable to the taxpayers. She would vote for the resolution with the admission that she was disappointed in some of the changes which were made. On roll vote, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. Mayor Castleberry stated that the next issue was the appointment of the five members of the Economic Development Corporation. city Attorney Prouty stated that the Articles of Incorporation indicated that the Board of Directors would be appointed for staggered terms. One director would have a three year tern, two directors would have two year terns and two directors would have one year terms. The Council would have to determine the length of each director's term. Mayor Castleberry asked if the Council could vote on the five members and then determine their terms. City Attorney Prouty stated that that could be done. also had to name three incorporators at this time. could also be members of the Board of Directors. The Council Those three Council Member Brock asked about the procedure for naming people. Would nominations be done one by one. Mayor Castleberry stated that he would open it to nominations. Council Member Brock nominated Troy LaGrone. Council Member Krueger nominated Carl Anderson. Council Member Young nominated Ed Smith. Council Member Miller nominated Bob Coplen. Mayor Pro Tem Biles nominated Richard Hayes. 3119 City of Denton City Council Minutes April 9, 1996 Page 18 Council Member Krueger nominated Harry Hall. Krueger motioned, Young seconded to cease nominations. Council Member Miller stated that there was one individual who was nominated which he considered to be an elected official. He was not looking at the legal issues of what the State of Texas said about elected officials. But when the bylaws and Articles of Incorporation were set up, it was indicated that no employee of the City of Denton or the Denton Chamber Commerce and no elected official could serve as a voting member of the Board of Directors. That meant that someone elected bythe citizens of Denton could not be elected as a member of the Board of Directors. There were political parties placed on a ballot and were elected. There was one individual who was nominated who was elected under that process. In keeping in the spirit of this, to deny the citizens of Denton to have an elected official on the Board but to allow this to happen for people who were voting throughout the County, was not in keeping with the spirit of what was intended. Council Member Krueger stated that there might be in the future a precinct chairman, who by Miller's definition, was an elected official and who could not serve under this capacity. There was no basic difference between a precinct chairman or the chairman of the party who oversaw those precincts. Richard Hayes was not a public official. Council Member Miller stated that the wording did not indicate a public official but rather an elected official. The intent was to not allow someone from City Council to serve because they were elected. The issue of credibility and representation and the issue of independence were a part of this. Council Member Young stated that Richard Hayes had worked hard to create this corporation. He was not an elected official but only an elected official within the Republican party. On roll vote to cease nominations, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. Mayor Pro Tem Biles stated that Council had sought the opinion of the City Attorney as to the definition of an elected official. The City Attorney advised that since Council was the one which wrote the ordinance, Council was the one which could determine the definition. The minutes of prior Council meetings would show that he was the one who made the suggestion which incorporated that language into the rules. His intent at that time was that elected 32O City of Denton City Council Minutes April 9, 1996 Page 19 officials meant people elected to City Council, Commissioners Court, State legislature or Congress. He felt it was a convenient deception to use those two particular words to try and preclude someone who had devoted a long time to furthering the community. He felt that everyone at that time anticipated that the clause meant no one on Council would be on the Board of Directors. Council Member Miller stated that this was an honest feeling on the issue and was not a deception. At the time Council voted on restricting elected officials, it did not have all of this discussion. Council voted on the nominations to the Board of Directors. On roll vote for Troy LaGrone, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. On roll vote for Carl Anderson, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. On roll vote for Ed Smith, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. On roll vote for Bob Coplen, Miller "aye" Young "nay" Cott "aye" Krueger "nay", Brock "aye", Biles "nay", and Mayor Castleberry "aye". Motion carried with a 4-3 vote. On roll vote for Richard Hayes, Miller "nay", Young "aye", Cott "aye", Krueger "aye", Brock "nay", Biles "aye", and Mayor Castleberry "nay". Motion carried with a 4-3 vote. On roll vote for Harry Hall, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. Mayor Castleberry indicated that Troy LaGrone, Carl Anderson, Ed Smith and Harry Hall were the top votes. There was a tie between Bob Coplen and Richard Hayes. On roll vote for Bob Coplen, Miller "aye", Young "nay", Cott "nay", Krueger "nay", Brock "aye", Biles "nay", and Mayor Castleberry "aye". Motion failed with a 3-4 vote. On roll vote for Richard Hayes, Miller "nay" Young "aye" Cott "aye" Krueger "aye", Brock "nay", Biles "aye" and Mayor City of Denton city CoUncil Minutes April 9, 1996 Page 20 Castleberry "nay". Motion carried with"a 4-3 vote. Mayor Castleberry indicated that Richard Hayes would be the fifth Director. City Attorney Prouty asked about the terms of office. Biles motioned, Young seconded that Troy LaGrone be appointed for a three year term, Harry Hall and Richard Hayes for two year terms, and Carl Anderson and Ed Smith for one year terms. On roll vote, Miller "aye", Young "aye", Cott "aye", Krueger "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. Council Member Krueger left the meeting. Biles motioned, Young seconded to appoint Troy LaGrone, Harry Hall, and Richard Hayes as Incorporators. On roll vote, Miller "aye", Young "aye", Cott "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. B. The Council considered approval of supporting the design and development of U. S. proposed by the Texas Department of Transportation. a resolution Highway 77 as Acting City Manager Svehla stated that the Transportation Department would be holding a meeting this Thursday on this project. It was important for Council to show support to the Highway Department on this project. The following resolution was considered: NO. R96-018 A RESOLUTION OF THE CITY OF DENTON CITY COUNCIL SUPPORTING THE DESIGN AND DEVELOPMENT OF U.S. HIGHWAY 77 AS PROPOSED BY THE TEXAS DEPARTMENT OF TRANSPORTATION; AND PROVIDING ANEFFECTIVE DATE. Miller motioned, Young seconded to approve the resolution. On roll vote, Miller "aye", Young "aye", Cott "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". MOtion carried unanimously. 6. The Council received a report, held a discussion and gave staff direction regarding the TMPA/Denton Power Sales Agreemen%. Bob Nelson, Executive Director for Utilities, stated that staff had been working on this amendment for quite some time and the document 322 City of Denton City Council Minutes April 9, 1996 Page 21 was now ready for approval. The amendment to the TMPA power sales agreement changed the agency from being a full requirements agency which was an entity which provided power and energy for the cities with each one of the shares of the cities changing slightly each year, depending on the size of one another. The clause stated that regardless of what happened, the cities would pay all the costs of TMPA. The amendment brought TMPA to a one unit power plant providing power from that unit. There would be provisions that other units could be installed or other activities could be done but each time, each city would enter into a separate agreement on that basis. The agreement would also provide for a fixed amount for this one unit for each city and tightened the payment clauses. Section 3 (a) firmly established the percentage share of TMPA. Denton's percentage would be 21.3%, Bryan would be 21.7%, Garland would be 47% and Greenville would be 10%. The old contract designed a percent share to change annually per a comparison of the size of the cities. The amendment reemphasized the cities obligation to pay TMPA costs regardless of any cause a city might have for not being able to pay, eliminated wording regarding power allocation if TMPA had insufficient power and eliminated force majeure as a cause. Section 3 (b) established the allocation which fell back to the percentages listed in 3 (a) and indicated that TMPA would use its best efforts to provide power. The other section which was changed was Section 7 which set the rates and charges to cover all costs which was essentially the same as the old contract. It eliminated the wording stating that the rates would be non-discriminatory and fair, eliminated the 120 day notice to cities of change of rates, and eliminated the procedure for any kind of arbitration in case a city disagreed with the TMPA rates. Section 7 also set the specific reserve funds which Garland and some TMPA Board members disapproved. Section 13 eliminated all reference to future approval/disapproval of a project and eliminated the "opt-out" provisions, established a right to future TMPA power based on the percentages in Section 3 (a). The amendment tightened Denton's responsibility but allowed the City to do other options. Acting City Manager Svehla stated that the amendment set the percentage~ different and allowed the City to oDt out at any time. Council Member Miller asked if the opt-out clause required the approval of the bond holders to be effective. Nelson replied correct that about 85% of all the TMPA bonds were insured. The procedure was that once the cities and the TMPA Board approved the document, the contract went to the bond insurance companies and large holders for approval. 323 city of Denton City April 9, 1996 Page 22 Mayor Castleberry asked what was the ne~t step in the agreement. Nelson stated that the amendments would be retyped so as to present a comparison of the two documents. That would be brought back to Council for consideration. The other three cities were also looking at the document. Bill Giese, Public Utilities Board, expressed a concern about one part of the amendment. A proposed change in the rates would allow for $2 million in a contingency fund and $$ million for replacement projects and all other funds would be distributed back to the cities. He had a concern that in the last year, a number of assets had been sold and those funds were put into a special bond fund. Under this amendment, those funds would have to be returned to the cities. He felt that when assets were sold, those funds should be used for the retirement of debt. There was also approximately $1 million from oil royalties and the leasing of oil ground. He again felt that that was a disposition of assets and should be used for debt retirement rather than to have to return those funds to the cities. He had a policy objection for a set figure as conditions changed and the view should be what was needed and what would be the best use of the funds. Acting City Manager Svehla stated that both Garland and Greenville were offering language which addressed Mr. Giese's concern. Those cities felt that any assets acquired using debt if sold, should be used to retire debt. Council might consider such language when giving final approval. There could also be wording which addressed reserve funds in different manner. Mayor Pro Tem Biles stated even though Mr. Giese supported this amendment to the contract, it did not go far enough in terms of dollars from disposition of assets as well as oil royalties. Mr. Giese felt that TMPA should be using those funds to pay off bond indebtedness. Giese stated that there were other indebtedness and those should be used also. Mayor Pro Tem Biles asked if two of the four cities or three of the four cities would agree to that. Giese stated that he did not know at this point in time. Mayor Pro Tem Biles stated that there was still have time to make suggestions to include such language. If that language did not reach the agreement, could the city of Denton adopt a policy that if TMPA sent money to the City for such a purpose, the City could City of Denton City Council Minutes April 9, 1996 Page 23 put that money into an account to use for debt retirement in the future. Giese stated that that would be his recommendation. Mayor Pro Tem Biles stated that the City could send a strong message to the rest of the TMPA cities that if dollars were received from the disposition of assets or oil royalties or whatever, it be used to retire the indebtedness. A. The Council considered approval of a resolution requesting the Board of Directors of the Texas Municipal Power Agency to reduce electric rates to actual costs of operations. Bob Nelson, Executive Director for Utilities, stated that this resolution may or may not be necessary at this point in time as the TMPA Board had this on their agenda for consideration. One direction given to the TMPA operation was that by January 1, 1996, TMPA would reduce its total cost of power and energy sold to the cities to 4 cents per Kwh. TMPA made the conversion and phased down some of the personnel but not by January 1, 1996 but rather by April 1, 1996. Thereafter, the staff came to the Planning and Operating Committee and established a rate which would effectively do the four cents per kwh. The Planning and Operating Committee agreed and he had included an addition to change the percentage allocation at that same time. When the proposal came to the TMPA Board, it had a concern that there might be a need to hold on to a few dollars until the change in operation was worked out in August. It was now felt that it could be handled with the amount of money on hand. Council Member Miller asked if there was a middle date to look at. There might be some validity to the point of not changing immediately as the change had just been made in December. Nelson replied that the agency had already phased down the operation and the TMPA staff felt it could operate as it was. Tom Harpool, Chair-TMPA Board of Directors, stated that it could be done May 1st which was on the agenda. Council Member Brook understood that~both representatives of the City to the TMPA Board were not in favor of immediately changing rates. Harpool stated that the question was could the cities look after the money better than TMPA was directed to do bythe bond holders. He was comfortable with the change. 325' city of Denton City Council. Minutes .- April 9, 1996 Page 24 The following resolution was consldered:~ NO. R96-019 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS, REQUESTING THE BOARD OF DIRECTORS OF THE TEXAS MUNICIPAL POWER AGENCY TO REDUCE ELECTRIC RATES TO REFLECT ACTUAL COSTS OF OPERATIONS; AND PROVIDING FOR AN EFFECTIVE DATE. Miller motioned, Young seconded to approve. On roll vote, Miller "aye", Young "aye", Cott "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. 7. The Council received a report, held a discussion on deregulation of the electric industry and its effects on Denton. Bob Nelson, Executive Director for Utilities, stated that one of the major issues driving deregulation was technological changes. Denton's power plants ran 30-33% efficient and the new technology plants ran 55-65% efficient and were run on natural gas. Computer technology used to explore for natural gas now gave a three dimensional picture of geological structures. Existing power producers built and financed their power production plants with the assumption that they would have a firm market in which to sell their power and thus receive the revenues necessary to pay off the long term debt. The Pubic Utilities Commission was holding work sessions to determine the extent of deregulation. Denton's strategy was to work hard to be the power producer and provider of choice in the community. Before there was a system with the bond holders for repayment but now there was the possibility of stranded investments and costs. Julie Zeller, Environmental Compliance Manager, stated that there were 13 states which were working on restructuring initiatives. Public Utilities Commission Project 14045 amended sections of the Public Utility Regulatory Act to permit wholesale transmission service for electric utilities. Other projects involved a response to the Legislature's request for a report on what the industry looked like in Texas. The consultant would provide the Council with detailed information when he made his presentation. 8. The Council received a report, held a discussion and gave staff direction regarding the expansion of the Occupational Health Nurse services contract. Max Blackburn, Risk Manager, stated that three months into the contract with the Occupational Health Nurse it was felt that the savings and the efficiencies of the occupational health nurse had 326 city of Denton City Council Minutes April 9, 1996 Page 25 proven themselves and staff was asking for approval to change to a full-time occupational health nurse. The funds would be paid from the Risk Retention Fund. Council Member Young asked how many employees a day the nurse worked with. Blackburn stated that with 20 hours of work per day, she did not see anyone. She mainly dealt with drug screening and wellness programs. Council Member Brock stated that the nurse was proving to be cost effective but there were no associated figures. Blackburn stated that so far it was cost avoidance, which was hard to put a number on. Most of the people had repetitive motion injuries and she was trying to provide those employees with a way to avoid having to go to a doctor. Young motioned, Brock seconded to proceed with the change. On roll vote, Miller "aye", Young "aye", Cott "aye", Brock "aye", Biles "aye", and Mayor Castleberry "aye". Motion carried unanimously. IF~R WALTERS - SRCRETARY CITY OF DENTON, TEXAS With no further business, the meeting was adjourned at 10:10 p.m. CITY OF DENTON, ACC002FE