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Minutes May 14, 1996372 CITY OF DENTON CITY COUNCIL MINUTES May 14, 1996 The Council convened into a Closed Meeting on Tuesday, May 14, 1996 at 6:15 p.m. in the Civil Defense Room of City Hall. PRESENT: Mayor Miller; Council Members Beasley, Biles, Cott, Krueger, and Young. ABSENT: Mayor Pro Tem Brock 1. The Council considered the following in Closed Meeting: A. Legal Matters -- Under TEX. GOV'T CODE Sec. 551.071 B. Real Estate -- Under TEX. GOV'T CODE Sec. 551.072 1. Considered acceptance of a possible assignment on behalf of a 4B non-profit economic development corporation to be formed by the City from Bill Methenitis, Trustee, relative to the vacant Texas Instruments facility. Ce Personnel/Board Appointments -- Under TEX. GOV'T CODE Sec. 551.074 The Council convened into a Work Session on Tuesday, May 14, 1996 at 7:00 p.m. in the City Council Chambers of City Hall. PRESENT: Mayor Miller; Council Members Beasley, Cott, Krueger, and Young. ABSENT: Mayor Pro Tem Brock; Council Member Biles 1. The Council received a report, held a discussion and gave staff direction concerning impact fees. Rick Svehla, Deputy City Manager, stated that the Council had received a report from the consultant regarding the impact fee issue. At this point it was felt that this was not the time to institute impact fees. Reasons for this decision were the latest bond issue, Department of Transportation funding on highways, and the possibility of reinstituting pro rata for utility lines. Council Member Krueger stated that because of the City's current abiliti~ and ~u~ent ~t~ategies, impact fees were not needed. He questioned how that intermixed with the economic development % cent sales tax. Svehla replied that there were a number of cities which had impact fees. Impact fees were viewed as an impediment to growth and d~v~lopment. Council Member Biles joined the meeting. 373 City of Denton City Council~Minu~es~ ~ ~ May 14, 1996 Page 2 Council Member Krueger stated that if theCity had the ½ cent sales tax for economic development, the impact fee issues would not be discussed. Svehla replied that it would depend on how and on what the Economic Development Committee was using those funds. If the City had the ½ cent it could look at ways to help eliminate those effects that a development might have by the use of the sales tax or other kinds of incentives or uses of the money. Consensus of the Council was to not consider th~ impact fees at this point in time. Council Member Biles stated that one area from the economic development sales tax discussion that needed serious consideration was the dedicating of a large share of the sales tax to the development of infrastructure. That was a must and was an effective tool to bring the right kinds of business to the City. He suggested forwarding to the Economic Development Board of Directors the impact fees and notes on the direction taken by Council. This needed to be in the equation in sales tax discussion and debate. Mayor Miller stated that the impact fee would not be for industrial .development but would be for residential development. 2. The Council received a report, held a discussion and gave staff direction regarding the Human Services Committee recommendations for use of 1996 human services funds. Recommendations include both CDBG and general fund dollars. The Human Services Committee recommended approval of the 1996 Community Development Action Plan and approval of the general fund recommendations. Barbara Ross, Community Development Coordinator, stated that the City had not estimated correctly the amount of CDBG and HOME funds it would be receiving from the Federal government. The city had received notice that it would be receiving $95,000 more than anticipated. That was about $20,000 more in combined HOME and CDBG funds than received last year which equated to an increase in Federal funding. The agenda packet contained the current action plan which included the estimated funds which the Committees considered and allocated. With Council's approval, the Committees would ask the Council at the next meeting to approve that estimated amount o~ ~unding and the way it was set up in the action plan. The additional funds received would be set up as unprogrammed funds. The Committees would then deliberate on how to distribute the additional funding. Along with the increase there was 3:74 City of Denton City Council Minutes May 14, 1996 Page 3 additional increases in set asides including an increase in the administration set aside, an increase in the set aside for the community housing development organizations and an increase in the human services set aside of 15%. With the possibility of additional human services dollars, the Committees would be requested to consider possibly shifting some of those funds from CDBG to the general fund to those activities which were previously funded with general fund dollars. The request for Council approval next week did not include the general fund human services dollars. Sandy Kristoferson, Chair-Human Services Advisory Committee, reviewed the recommendations from the Committee as noted in the agenda back-up materials. Council Member Young asked why the proposal from "Starting Over" was not considered. Kristoferson stated that several years ago when the organization first made application, it did not have a non-profit status. This year it did not have a facility to operate in at this point in time. Historically, the Committee had not funded agencies which were not operational to take care of clients. The organization also had significant funding from other agencies. Council Member Krueger stated that in the backup materials, Interfaith Ministries was asked the question about clients who were United States citizens who received the assistance. Ms. Ross indicated that there was no policy stated and could not be asked with CDBG funds. Kristoferson stated that regarding CDBG funds, the only criteria was low to moderate income and did not have anything to do with nationality. Council Member Krueger asked about the funding for Planned Parenthood. The back-up materials indicated that with the use of public funds for an organization that did abortions, Federal grants and Title 10 and 20 had to have an assurance that no tax dollars were being spent on abor%ion~. Did %h~ dollars which the city wa~ going to give Planned Parenthood fall under Federal grants. Kristoferson stated that Planned Parenthood was not receiving any dollars from the City. The money asked for was for equipment but it was not recommended for funding. Council Member Young asked if the Adult Day Care was receiving funds. 375 City of Denton City Council~Minutes ~ May 14, 1996 Page 4 Kristoferson replied yes that they were receiving $12,000. Council Member Young asked if the agency was helping minorities. Kristoferson stated that that question was addressed to the presenters. They were trying to gather clients from the community as a whole. The African-American and Hispanic communities tended to have larger extended families which cared for their elderly and at this time there seemed to be no way to encourage those people to bring their adults to the Center. Cott motioned, Biles seconded to proceed with the staff recommendations. On roll vote, Beasley "aye", Brock "aye", Cott "aye", Krueger "aye", Young "aye", Biles "aye", and Mayor Miller "aye". Motion carried unanimously. Mayor Miller requested that the project ProyectoAmistad at the MLK Center be considered for funding under the budget process. There was a need for a person in the form of a social worker to help the Hispanic community. Council Member Beasley also suggested that staff investigate how this program could be implemented. There was a great deal of need for this in the Hispanic population. She asked staff to see how this could be funded in the regular budget process. Council Member Young requested staff to look at funding for Starting Over as there was a need for this type of agency. Council Member Cott suggested that staff look at all related services and see how to begin the long process of consolidating services. Kristoferson stated that the agencies were currently in the process of beginning such a consolidation. 3. The Council received a report, held a discussion and gave staff direction regarding the Community Development Advisory Committee's recommendations for use of 1996 Community Development Block Grant (CDBG) and HOME funds. The Community Development Advisory Committee recommended adoption of the 1996 Community Development Action Plan. Lisa Polack, Community Development Advisory Committee, presented the 1996 Action Plan for use of the Community Development Block Grant and HOME funds. The Action Plan was based on funding of $1, 646,747. The funding was broken down into four major categories of affordable housing, human services, public facilities and 3:7 6 city of Denton City Council Minutes May 14, 1996 Page 5 improvements and economic development. The major goal was to provide money for projects that benefited moderate to low income households. In terns of affordable housing, funding totaled 68% of the total budget, human services totalled 13% of the funds, public facilities and improvements totalled 16.5% of the funds and economic development totalled 2% of the funds. Council Member Young felt that the speed bumps on Ruddell should be removed from the budget. The people in the community did not want the speed bumps as they aggravated traffic and the Fire chief had indicated that they put a strain on the fire trucks. They appeared to be more of a problem rather than a help. He suggested lowering the speed limit rather than putting in the speed bumps. The people in the community wanted an activity stage which was not considered for funding. He requested that the activity stage be included in the funding. Young motioned, Cottseconded to remove the speed bumps on Ruddell and add the activity stage for Fred Moore Park for funding. Council Member Biles stated that he understood that the speed bumps did not have a broad level of support in the area and that they were not necessarily the answer to the problem in the area. Ross replied that this proposal came to the Engineering Department from the neighborhood. Council Member Biles felt that the geographical layout of the streets would not achieve the desired situation. There would be some future drainage improvements in the area and he hoped the speed bumps would not be added before completing that work. For at least a year a performance stage at Fred Moore Park had been requested. The funding for the stage was estimated at $45,000. He was not sure that amount of money needed to be spent on a performance stage but given the amount of activities which went on in that park and the emphasis on the need to further positive relations in the area, he supported the idea of moving ahead with the stage. $45,000 might not be the level which was needed. Perhaps progressive additions to the stage could be added through the years. He agreed with taking out the speed bumps and putting it towards the stage. Mayor Miller asked if there were funds available for this request. R~ r~plie~ ~ha~ ~here was $34,000 in CDBG funds and $22,000 in HOME funds to be allocated. City of Denton city Council Minutes May 14, 1996 Page 6 Mayor Miller stated that depending on the cost and if the speed bumps were removed, there would be funding for all the other recommended areas. Council Member Biles stated that the $45,000 might be the minimum funding needed. He would like to know other alternatives for funding for the stage. Ross stated that the $45,000 was based on a band shell similar to the one at the Civic Center Park. Something could be done with less funds if needed. Council Member Beasley stated that the speed bumps were from the CIP and was an issue raised at a community meeting at MLK. Having driven those streets, there might not be a need for the speed bumps but rather a lower speed limit. She supported the idea of an activity stage but supported the idea of having a sound back on the stage so that it was done correctly from the start rather than done half way. Mayor Miller stated that if the motion was approved, the direction to staff would be to erect a stage which would be appropriate for the use of the park. He felt that the band shell with a back was needed. The motion was to approve the recommendations from the CDBG Committee to have the staff bring back the recommendations at the next meeting for Council approval, taking out the speed bumps and putting in an amount for the activity stage at Fred Moore park. Ross stated that an application had to be submitted by June 15. Would the Council allow the $7500 to be unprogrammed and give the Committee time to reconsider the activity stage with the new funding. The $7500 and the speed bumps would be pulled and consider that as unprogrammed in this application to HUD with a letter to HUD that that money would be programmed very quickly and the additional application amounts sent to them. Council Member Biles stated that the $7500 would be specifically diverted to the activity stage. Ross replied that that could be done or the Committee could review the request. Mayor Miller stated that next week the CoUncil would see an application with the $7500 removed and then a supplemental application would be done in the future for a stage in Fred Moore Park. 378 City of Denton City Council Minutes May 14, 1996 Page 7 City Manager Benavides stated that the motion could designate the $7500 would be for the activity stage. Young and Biles agreed to the change in the motion and second to designate the $7,500 for an activity stage. On roll vote, Beasley "aye", Brock "aye", Cott "aye", Krueger "aye", Young "aye", Biles "aye", and Mayor Miller "aye". Motion carried unanimously. 4. The Council received a presentation of six month financial statements for the general, utility and internal service funds. Kathy DuBose, Executive Director for Finance, stated that the ad valorem taxes were due in October and became delinquent in February. Currently they were at 47% collection for both current and delinquent taxes. At the end of March, the city was at 50% of the budget but was at $122,000 under the year to date budget for the sales tax. since that time, the city had had another month where the sales tax had fallen below budget and was now $185,000 under the current year to date estimate. Mayor Miller asked if that was heavy loaded on the front end due to the christmas sales. DuBose replied yes as well as the fact that the increase in sales tax to reduce property taxes became effective in October of 1994 and the City saw the receipts of that increase in January of 1995. Council Member Biles stated that the City was still behind in sales tax. DuBose stated that the City was $185,000 behind the year to date estimate in sales tax. Council Member Cott stated that part of that might be the fact that Wal-Mart was moving. There were also many empty stores at the Golden Triangle Mall. DuBose stated that many of the metroplex cities around the State had all ~hown a decrease in the sales tax for the same period. She detailed the financial comparisons of the various categories as presented in the agenda back-up materials. Council Member Krueger felt that it was not true that the sales tax revenue was front end loaded. He felt that in a six month projection, there was not much difference between the first six months and the last six months. City of Denton City Counci~Minutes : ~ May 14, 1996 Page 8 DuBose stated that there was because the Christmas season was the highest quarter receipts. There were monthly taxpayers and there were quarterly taxpayers so once every three months, the City had a large payment. The quarter which reflected the sales for christmas was a large receipt. Council Member Krueger stated that September-October's receipts were lower so that there was not a great deal difference between the two six month quarters. DuBose stated that a regression analysis was done to look over the trends and took into consideration new facilities on line, etc. Council Member Krueger asked what would happen if the trend continued and the overall budget was 1% over projection in revenues but the sales tax maintained its trend. Last year during the budget process a negative amount was needed to make up before the'process could start. Even though the sales tax projections might be weak, if the budget came in over projections, why did the process start with a negative amount when working on the budget. DuBose replied that the Council had set a standard to retain approximately 10% of the fund balance for 10% of the expenditures. When there was a year where there was over 10%, one overage was incorporated into one time expenditures. Last year it was estimated to come in at 15% and were $1.7 million over the 10%. That allowed money to be used for one time expenditures such as vehicle replacement. Council Member Krueger stated that when the budget preparations were started, there was a shortfall of approximately $120,000 due to the sales tax revenues being off. He was asking why, if the final figures were over budget, the process had to start with a negative figure. DuBose replied that between June and the time the final sales tax numbers were received, lost sales tax was realized. Council Member Krueger stated that it was confusing that at the end of the budget process a revenue surplus was shown as compared to a expenditure deficit, when in fact there was no deficit. City Manager Benavides stated that evenif more money was made than budgeted, some of that money was one time and not reoccurring. There was a need to go back to the base and determine what would be reoccurring income to support reoccurring costs. 380 city of Denton city Council Minutes May 14, 1996 Page 9 Council Member Biles stated that the bond analysts indicated that the city should have not less than 10% in the fund balance because if it dropped, the City would spend that much money in one year just on the additional interest charges on outstanding bonds. DuBose stated that two years before in the same time frame, it was possible to indicate that the actuals were higher than the projections and allowed the Council to look at other possibilities. Last year it was different as the sales tax was low. She reviewed the expenditures year to date as indicated in the agenda back-up materials. 5. The Council received a report, held a discussion and gave staff direction regarding a credit for February wastewater bills. Bob Nelson, Executive Director for Utilities, stated that wastewater charges were based on water volumes. Two months ago staff asked for a fine tuning of the methodology of doing rates and gave a rebate for some abnormal high usages for December. There continued to be dry weather and some customers had requested a closer look at the rate. In December 1995 the City's customers used a lot of water and were 56% above normal usage. In January the customers were 13% below the seven year average and in February the customers were 17% above the normal average. There were three issues to consider with this item. One was should credit be extended for the above normal February sewer bills. About 30% of the customers had bills which were at least 25% above normal. The second was should the calculation change the methodology and use the historical average of the band width between less than 25% or greater than 25% or leave it at the 50% band width above or below the historical average. The third was if a change was made to the 25% band width, should a credit be made for March, April and May as those months were already billed. The Public Utilities Board recommended to grant a credit for 25% above average, change the band width to 25% and give an adjustment for the March, April and May bills. The new average would be used for the rest of the year. Consensus of the Council was to proceed with implementing the PuDllc utilities Board recommenda%ions. On roll vote, Bea~le¥ "aye", Cott "aye", Krueger "aye", Young "aye", Biles "aye", and Mayor Miller "aye". Motion carried unanimously. 6. The Council received a report and distributed supplemental 1996-97 budget priority questionnaire. Kathy DuBose, Executive Director for Finance, stated that staff was requesting Council to provide a supplemental budget questionnaire with the new Council Member now on board. She reviewed the process 381 City of Denton City Council Minutes :~ May 14, 1996 Page 10 for completing the questionnaire. Following the completion of the Work Session, the Council convened into a Special Called Meeting. PRESENT: Mayor Miller; Council Members Beasley, Biles, Cott, Krueger, and Young. ABSENT: Mayor Pro Tem Brock 1. The Council considered approval of a resolution amending Resolution No. R96-017 authorizing the creation of the Economic Development Corporation of Denton, Inc. as an instrumentality of the City of Denton; to more clearly express the purposes of the Economic Development Corporation of Denton, Inc. City Attorney Prouty stated that this resolution provided for a technical correction as the result of a recent Attorney General's opinion which indicated that a county could not make loans or grants of public money to an industrial development corporation for promotion of economic development unless the activity accomplished a public purpose. This resolution would amend Section 4 of the original resolution which created the economic development corporation to express that everything the new economic development corporation did would accomplish a public purpose. It would more clearly state that the purpose for which the EDC could be formed under the Economic Development Act of 1979. It also made clear that if programs for economic development were going to be done under Section 380.001 of the Local Government Code they would be consistent with the Economic Development Act of 1979 and would be for a public purpose. The changes did not alter the basic format of the EDC and continued the same Board of Directors and structure of the bylaws and Articles of Incorporation. The following resolution was considered: NO. R96-023 A RESOLUTION AMENDING RESOLUTION NO. R96-017 AUTHORIZING THE CREATION OF THE ECONOMIC DEVELOPMENT CORPOEATION OF DENTON, INC. AS AI~ INSTRUMENTALITY OF THE CITY OF DENTON; TO MORE CLEARLY EXPRESS THE PURPOSES OF THE ECONOMIC DEVELOPMENT CORPORATION OF DENTON, INC.; AND PROVIDINGAN EFFECTIVE DATE. Krueger motioned, Young to approve the resolution. On roll vo%e, Beasley "aye", Cott "aye", Krueger "aye", Young "aye", Biles "aye", and Mayor Miller "aye". Motion carried unanimously. 382 City of Denton City Council Minutes May 14, 1996 Page 11 City Manager Benavides stated that there were two suggested dates for the Council's planning session - June 21-22 or June 28-29. He asked Council which dates would be better for their schedules. Consensus of the Council was that June 28-29th would be the better dates. Staff would look for locations at which to hold the planning session and return to Council with suggestions. With no further business, ~TY S~CRETARY C~TY OF DENTON, TEXAS the meeting was adjourned at 8:45 p.m. JACK/~ILLER, MAYOR CIT~/OF DENTON, TEXAS ACCO030D