Minutes August 9, 1996CITY OF DENTON CITY COUNCIL MINUTES
AUGUST 9, 1996
The Council convened into a Work Session at 9:00 a.m. at the
Radisson Hotel (Trustees Room), 2211 I35-E North.
PRESENT: Mayor Miller; Mayor Pro Tem Brock; Council Members
Beasley, Cott, and Young.
ABSENT: Council Members Biles and Krueger
1. The Council received staff presentations of the proposed 1996-
97 budget for the City of Denton.
Mayor Miller stated that Council would be receiving answers to any
questions which they might have concerning the budget. Council
would not be asking detailed questions nor receiving details
regarding the budget at this point in time.
City Manager Benavides stated that this was a policy-oriented
budget with a focus on issues for policy rather than specifics.
This budget was a self-supporting budget for reoccurring costs,
balanced on-going expenses with reoccurring revenues, addressed the
need to pay for increases in the operating expenses associated with
the hiring of 12 additional fire fighters, the 1995-96 pay program
and a bond rating upgrade.
1. General Fund Reserve Level
Council had adopted a policy of having a 10% fund balance which was
key in bond rating analysis. Due to the amount in the General Fund
Reserve Level, there were opportunities for one time expenses for
building needs, vehicles, a pay merit award, an incentive program,
street buttons and miscellaneous one time needs such as a utility
attorney, office furniture and equipment for that attorney.
Council Member Biles arrived at the meeting.
2. Revenues
A. Sales Tax - ½ cent to reduce property taxes - this
formula was based on the last 12 months actual figures from the
State Comptroller's office which did not allow for projections or
forecasts on how the sales tax would rise or fall. It was
estimated that there would be a $4,300 decrease in sales tax which
did not generate a property tax decrease based on the State's
required formula.
Council Member Cott stated that he could accept a pay merit award
but did not accept how it was done. A memorandum had been sent out
to all employees and it was now anticipated that this was a done
deal.
City Manager Benavides stated that a memorandum was given to
employees as pay and benefits were important. The memorandum
indicated that this was a proposal with an explanation that the
Council would still be evaluating that proposal.
City of Denton City Council Minutes
August 9,1996
Page 2
Mayor Miller stated that this was done to better communicate with
the employees regarding this situation.
B. Sales Tax - one percent general purpose tax - the
proposed budget projected a 4.5% growth for 1996-97 over the
current year estimate. Currently the City was experiencing a 3.25%
growth over the prior year.
C. Property Tax - the proposed property tax rate was
$.5309/$100 valuation which represented a 1.85% reduction in the
tax rate. The proposed rate represented the fourth consecutive
year the .rate had been set below the effective tax rate and the
seventh straight year the rate had been set at or below the
effective rate.
D. Swimming Pool Fee - the current fee was established in
1984 at $1.00. The new Parks strategy was to review fees every
three years and recommend adjustments as required to offset costs
and market positions. The proposed $1.25 fee generated an
additional $13,775 in additional revenues.
3. Pay Plan Adjustments
Tom Klinck, Director for Human Resources, stated that this would be
a 3% one time lump sum award effective October 1st and paid on
October 4th. This would be for Civil Service and non-Civil Service
employees and regular full-time and part-time employees. Civil
Service would continue to receive step increases. Probationary
employees, employees on disciplinary status or performance
improvement plans would receive the award if they successfully
completed the plans. The cost to the General fund was $690,000 with
a total cost of $1,070,865. Another proposed program was the
Incentive Plus Program which would provide monetary and non-
monetary awards to employees in the amount of $25-$250. Department
heads would develop the selection system with awards being given
any time of the year. Awards could be given for innovative ideas
or suggestions; for an employee's high level of professionalism;
for an action which saved health, life or property; and unique and
beyond usual customary activities. Approximately $81,000 was
budgeted for this proposed program.
4. Benefits Adjustments
A. Health Insurance - it was suggested to continue with
Harris Methodist with a 4.1% rate reduction for HMO only selection
effective January 1, 1997 with a related reduction in premiums for
retirees.
B. Retirement (TMRS)- the City was currently at a 6% two to
one match program with Denton being only one of two cities not at
a 7% two to one match in a metroplex survey. The cost of a 7% two
City of Denton city council Minutes
August 9,1996
Page 3
to one match was $176,992 for on-going costs· There was no
proposed change in the 1996-97 benefit.
· sit - it was recommended by. the
C. Work Force D~er _~ ' tee to have additional
Employee's W~k ~orc~= ~v%rj~l~orC~el~rain_the-tra~ner progra~
recruitment ~fzorts anu.u~ ~ _..=~.. In,tit and sponsor a
for the National coalition Du~u~..~ ...... ute -
diversity community luncheon.
5. Public Safety
A. Police
. deral Grants - the city was apply~n~ for
1. State and Fe _ . - ~ ..... ,{1,1 omestic vlo£ence
o ~lre a ju~ .... .d
a fiv~ year state grant t - ~ -~ ~--stice ~rant of $106,500
investigator and a one year Depar~men~ o~ ~
to purchase mobile date computers with a city match of $9,682.
Pro4ecto Amistad - this was a.proposed full-time
· - . ' s coordinator who would be
bilingual/bicultural community service
responsible for the initiation, facilitation, and promotion of
available services to the Hispanic community· The position would
be assigned to both the East and West community offices, recreation
centers, and the Central Police Station. The position could also
leverage future grants. The cost would be $45,000 to the budget
for a social worker in the Family Services unit of the Police
Department·
council Member Young stated that he had a problem with this
position. Having someone who only spoke Spanish would not help
someone who could not speak English. He also had a problem with
the expense of this item.
'tions - a civilian property technician and two
3. -~w~ were DroDosed in the upcoming budget. The
civilian duty ~
Police Department maintained the management and control of
approximately 18,000 pieces of property· Currently a full-time
detective spent 70% of his time managing this property. It was
proposed that a civilian property technician would replace that
o ositions would be the addition of two
fficer. The other tw ? ...... ~,e~n ion of a program
o ' ' w~ ~ ...... uat
tatted 4-5 years ago. ~= =~- = ·
s ..... =e and also allowed an Increase in
the fill9 wh~re they snouxu ~
diversification of the Police Department.
eous - proposed expenditures in this
4. Miscellan ...... ~,d with the new Public
category wQ~ld be office supplies as~uu
Safety Computer System and an additional $4,000 ~or an area
coordinator for the COPS program.
City of Denton City Council Minutes
August 9,1996
Page 4
37
B. Fire
1. Dispatchers - it was proposed to add three
additional dispatchers to the proposed budget to help meet the
minimum staffing requirements for quality control for emergency
response.
2. EMS non-emergency transfer service - this program
was the non-emergency transportation of patients between hospital
to hospital, extended care facilities, a patient's home, health
care facilities and specialty clinics. The program would add six
full-time civilian transfer attendants at a cost of $124,000 and
would generate $214,000 in additional revenues. The net revenue
would be used to fund reoccurring public safety packages.
3. Miscellaneous - truck diagnostic eguipment for an
in-house mechanic, breathing apparatus, fire rescue equipment, a
fire internship position, and the reclassification of 3 drivers to
battalion chiefs were recommended in the proposed budget.
Council Member Young stated that the increase of pay for the
drivers to battalion chiefs was too great an increase. There was
a need for more minorities in the Fire Department.
6. Fire Reserve Fund - this fund was created to phase in the
fiscal impact of opening new fire stations. As of October i the
balance of the fund would be $84,000 and was included in the 1996-
97 proposed budget. The fund would be closed out at this point in
time.
7. Other Agency Contributions - The Human Services Committee had
recommended Community Development Block Grant contributions of
$186,000 and the Human Services Committee recommended General Fund
contributions of $163,868 with a total contribution to Human
Services agencies of $349,868.
8. Tax Exemption for persons over 65 - the goal of the Council in
1988 was to increase exemptions from $16,000 to $25,000 over the
years. The current exemption was $23,000 and the proposed budget
included an increase of the exception of $1,000 to $24,000.
9. Vehicles - the 1996-97 proposed budget included $345,894 to
purchase and replace 44 General Fund vehicles. There was a one-
time expense of $171,442 with an on-going expense of $174,452.
10. Long Range Technology plan - the first phase of the Long Range
Technology Plan provided PC's for employees who needed them, but
currently did not have one. It also replaced PC's that were five
years old or older. It upgraded current equipment (memory/storage)
and connected all PC's to the local area network and mainframe and
standardized software. Two new positions were proposed in the
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City of Denton City Council Minutes
August 9,1996
Page 5
budget for a network manager and a computer system trainer.
11. City Hall in the Mall - 12.5% of the counter utility payments
were made at the Mall. The current hours were 11:00 a.m. - 8:00
p.m. Monday through Friday. Proposed hours were 10:00 a.m. - 9:00
p.m. Monday through Saturday and 12:00 noon - 6:00 p.m. on Sunday.
The office would be staffed with three part-time customer service
representatives and one part-time computer operator.
Council Member Beasley asked about transferring current employees
to the City Hall in the Mall rather than hiring three new
employees.
Harlan Jefferson, Director of Fiscal Operations, stated that
although the number of actual customers in City Hall was down, the
department was moving from working with customers in person to
working with the customers on the phone.
12. Main Street - it was proposed in the budget to use Lalor funds
to pay for an Assistant Main Street Manager's position at a cost of
$29,209.
13. Facilities - there was a backlog of building needs and
$568,456 worth of one-time expenditures. The expenditures would
include ADA compliance, safety hazards, replacing heating and air
conditioning units, maintenance and repair and renovations.
14. SPAN - it was anticipated that there would be a 43% reduction
of Federal funding thus necessitating a need to redesign the
existing route system. The City would be asking SPAN to consider
eliminating fixed routes and demand services during certain times
of the day. The budget contained a proposed transfer of funds from
a previous Federal grant to meet 1996-97 needs on a one-time only
basis.
15. Other Services
A. Legal - it was proposed to hire a Utility Attorney for
in-house representation of suits filed against the City. There had
been an increase from 20% to 60% in these types of suits. A large
portion of the current suits and legal issues were related to
utility matters.
B. General Government - due to the growing demand for
special projects/increased size and frequency of agendas, a request
was being made for a part-time Clerk III in the City Manager's
office. This position would report to the City Secretary.
16. Recreation Fund - proposed expenses in the 1996-97 budget
included computer registration as a one-time expense, sound and
recreation equipment for a one-time expense, gymnastic equipment
City of Denton City Council Minutes
August 9,1996
Page 6
39
for a one-time expense, fitness equipment for a one-time expense,
a pool feasibility study for a one-time expense and a swim team
expansion which would be an on-going expense.
Mayor Miller stated that he had received a memorandum on April 19th
from the Finance Department which called for a 1% reduction in the
ad valorem tax. That was not generated by the sales tax for
property tax reduction because the calculations by the
Comptroller's office did not support that. The budget proposal
still called for that reduction. Based on either decisions made
last year or the dynamics of on-going programs, $1.5 million was
needed this year just to fund on-going programs. If that did not
have to be done, a 7 cent reduction in ad valorem taxes might have
been possible.
18. Other funds - internal service funds - This category included
the warehouse, motor pool, Tourism & Convention, Emily Fowler
Library, police confiscation, and debt service. The warehouse
category included .a shed enclosure, a conference work room, a
desktop color copier and a laminator. The motor pool had no
changes from the current year. The Emily Fowler Library fund
included supplies and maintenance. This was the first time this
was included in the budget document. Police confiscation fund
included seizures of vehicles, property, and cash.
19. Designation of fund balance - in 1983 $518,000 of the General
Fund balance was designated for future needs. A comprehensive
search did not reveal a specific purpose for this money. The
Finance Department's option was to use for part of this money for
streets with additional money for Council consideration.
17. Major Issues - Utilities
A. Electric - there was a $77,296,209 revenue projection
with a projected $75,225,883 expenditure budget request. The KWH
sales projection was 3.2% above the 1996 estimate. Major
budget/program changes included $1 million for a CIS/computer
system upgrade and administration; $1 million for power supply
options in production; $1.9 million increase in ROI/street rental
transfers in administration; $2.2 million decrease in purchased
power/fuel cost in production; the elimination the demand
management division with the transfer of functions to
administration; a new Service Center which was included in the CIP
for dispatch operations; and proforma included $2.6 million for
TMPA debt retirement fund. New positions for Electric included a
new utility service worker in metering, a new secretary in
distribution, a new half-time safety specialist in administration,
a new temporary/~ea~onal employee in dispatch operation~, a new 1/4
office clerical position in communications. It was proposed to
have no change in the base rates and a proposed energy cost
adjustment increase on October 1st from 1.90 cents to 2.00 cents
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City of Denton Cfty Council Minutes
August 9,1996
Page 7
with another change projected on January 1st. The average ECA for
a full year was projected to be 2.08 cents. In order to meet the
Charter requirement to not transfer more than a 6% return on asset,
3.6% needed to be on revenues and 4% on street rental. The Pubic
Utility Board indicated that as that was a 4% street rental fee it
should be listed on the utility bill. If that were done, the
electric rate would have to be decreased bythat amount. The total
number would be the same.
Council Member Biles asked if that was a rate issue or a disclosure
lssue.
Neison indicated that it would be a disclosure issue. The Public
Utilities Board felt that it should be noted on the utility bills.
Council Member Biles indicated that as it did not alter the amount
of the utility bill, he was not in favor of changing the billing
system.
Consensus of the Council to keep the billing system as it current
was sent out to customers.
B. Water - there was a $15,624,309 revenue projection and a
$15,021,382 expenditure budget associated with the Water
Department. The $4.752 billion gallon sales projection would be
close to 1996 estimate. Major budget/program changes included
increased costs by $740,000 due to refinancing the Ray Roberts debt
which would provide significant long term savings; $350,00 of the
$450,000 reserve would be used for water tank painting; and a
$331,500 decrease in ROI transfers (5.6% of rate revenue). New
positions included a new Director of Water/Wastewater Field
Services with Engineering and Drainage Department sharing 40% of
the funding. There would be no rate changes in the Denton rates
but the wholesale rate to the Upper Trinity Regional Water District
would be increased by 1.56%.
C. Wastewater - wastewater projected $11,032,551 in revenues
with $10,343,596 projected in expenditures which was below 1996.
Major budget/program changes included $1 million budgeted for
electric debt repayment; a $606,100 decrease in ROI transfer (5.6%
of rate revenue); and a $108,800 increase in debt service for
$2.?50 bond sale in 1996. New positions included a new Director of
Water/Wastewater Field Services with Engineering and Drainage
funding 40% of the position; a new Administrative Assistant I in
treatment; a transfer of a welder/fabricator from the Machine Shop;
and a new temporary Environmental Monitoring Technician in
pretreatment which was grant funded. There would be no change in
Denton rates but the wholesale rate to Corinth/UTRWD would be
increased by 3.2%.
City of Denton City Council Minutes
August 9,1996
Page 8
41
D. Solid Waste - $6,712,672 revenue was projected with a
$7,100,938 expenditure budget! request. Major budget/program
changes included completion of!the landfill expansion in 1997 for
$3.2 million; the operating 'portion of the budget would be
essentially unchanged from 1996; the recycling program would be
held to the 1996 funding level;:a $462,800 increase in debt service
for a $5 million bond sale in 1996; $75,000 of $150,000 for
container purchases to come from reserves in the commercial area.
New positions included two new positions. A transfer would be made
from the Machine Shop (welder/fabricator and maintenance mechanic),
a new light equipment operator in recycling, and the elimination of
a Maintenance Worker I position in Residential. There would be no
change in residential rates with a 13% increase in commercial rate
revenue, a 16.7% dumpster increase (average), an 8.1% open top
increase (average), and a 5.7% compactor increase (average). The
proposal would continue to restructure rates to encourage larger
containers with fewer pickups. The landfill rate would be
increased from $7.00 to $8.20 per cubic yard, the landfill rate for
outside the City customers would be increased from $16.00 to $16.75
per cubic yard.
E. Fleet Services - there was a $2,428,122 revenue
projection with a $2,440,622 expenditure budget request. Major
budget/program changes included a new fleet services garage
budgeted in 1997; a $1 million loan from Electric reserves; the
elimination of the machine shop division with functions being
transferred to the Electric/Wastewater/Solid Waste Divisions. New
positions included the transfer of 3 machine shop positions to the
Wastewater and Solid Waste divisions. Rate changes included
increasing the garage rate from $40 to $42 which was 85% of
competition rates and increasing gas/diesel revenue cost margin by
6 cents (estimated gas price of~ $1.05 per gallon)
20. Economic Development Corporation
City Manager Benavides stated that the Economic Development
Corporation (EDC) Board needed to submit a budget to the City
Manager to be presented to the Council for consideration and
approval. Staff had been assisting the EDC staff to develop a
budget. The EDC was developing performance measures which
indicated what the EDC would accomplish with the money asked for.
Originally the EDC had asked for a $365,000 transition budget. Some
money given would be rollover money ($40,000), the EDC would
continue to received $85,000 from the Utility Department and the
General Fund would have to find $72,000 to reach the EDC's new
budget amount of $97,000.
Council Me~er Biles stated that the private sector money was not
included.
Herb Prouty, City Attorney, replied correct.
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City of Denton City Council Minutes
August 9,1996
Page 9
City Manager Benavides stated that the EDC indicated that they
would be spending the money faster than first assumed so that the
rollover amount might be less and additional funding would have to
be found to make up the difference. The money would be used for
supplies and services rendered to the EDC. Quite a bit of money was
a transfer to the Chamber to do work for the EDC. That figure did
not include time spent byhimself, the city Attorney, the Executive
Director for Finance, and other staff on the project.
Council Member Biles stated that there was an absence of
administrative transfers.
City Manager Benavides replied correct.
City Manager Benavides stated that the Chamber was receiving money
for work from the EDC but City employees were not being reimbursed.
Council Member Beasley asked if the EDC was just funding what the
Chamber was already doing.
Council Member Biles stated that previously the City and the
private sector were putting money into an economic development
fund. Out of that account, salaries were paid for economic
development and supplies. In the beginning of the formation of the
corporation, it was indicated that it had to contract with the
Chamber and would have to continue until the sales tax election.
Mayor Pro Tem Brock stated that in the past, those activities were
funded half from public funds and half from private funds. The
proposal was to fund all with public money.
City Manager Benavides presented outstanding issues associated with
the EDC - (1) Would the transitional budget be funded with General
fund dollars?; (2) Would the entire year be funded?; (3) Would the
funding only be supplied until the election?; (4) Should the
election fail, what would be the next step?; (6) If the Council
decided to providing the funds, would one-time funding sources be
used?
Council Member Biles stated that what the EDC proposed would be
entirely from public dollars - no matter where they came from
either general fund or utilities. The private sector money would
stay at the Chamber for some of their current projects which were
not in the realm of the EDC.
council Member Cott stated that if this was public money, then
goals and objectives needed to be set for them for the next six to
twelve months. If tho~ goals and obj~ctiv~ were not met, then
discontinue the funding.
City Manager Benavides stated that that was one of the requirements
City of Denton City Council Minutes
August 9,1996
Page 10
43
of the ordinance. The EDC had to provide productivity/performance
measures tied to the dollars provided by the City.
City Attorney Prouty stated that the usual process was to have a
sales tax election and then form the EDC.
City Manager Benavides stated that there might have to be an
interim budget based on the passed sales tax.
City Attorney Prouty stated that there might be the need for a
contingent budget as part of promoting the election to make it
successful. This would develop and communicate to voters what was
going to be done with the money.
Council Member Young stated that there was a need to start work on
selling the idea of the sales tax as people were having problems
with the idea of the EDC buying land. It was felt that this was
government competing with private enterprise.
Council Member Beasley stated that as the process was done in
reverse with the formation of the corporation before the approval
of the additional sales tax and as the EDC had contracted with the
Chamber to pay for services the Chamber previously provided, she
felt it was best to ask the EDC to continue those traditional
activities with the Chamber which were now in the EDC and funded
with utilities money. After the sales tax election other
activities could be started.
Council Member Biles stated that the City and the EDC could not
spend money to promote the economic development sales tax. There
was a plan to use the private sector $40,000 by the Chamber to
promote advertising for the sales tax election.
Council Member Biles stated that right now the City was putting
money in the EDC and the EDC was giving money to the Chamber of
Commerce. He had made the observation to the Chamber of Commerce
Board of Directors and the Executive Committee, that if Council did
not provide the Chamber funding by moving Ken Burdick to the EDC
immediately, the Chamber would financially fail at that point in
time because they had signed leases for equipment and that was why
he had pushed to have the EDC contract with the Chamber for a
transitional period of time. His suggestion, at this point in
time, was that the EDC was a City board. Therefore, the City had
an obligation to fund the EDC through the entire City fiscal year
which took funding to September 30, 1997. However, he suggested
that the Council adopt a resolution that stopped that obligation of
the EDC contract with the Chamber effective March 31, 1997 which
was the Chamber's fiscal year. If that was done in this budget with
that resolution, it would provide the Chamber time, from March
31st, to develop their own budget without the EDC funding. If the
EDC wanted to have Ken Burdick as an employee doing economic
City of Denton city Council Minutes
August 9,1996
Page 11
development, then the EDC, after April 1st, would have him working
for them. The City would then assume 100% of the fiscal
responsibility for its board and would remove the job of economic
development from the Chamber.
Mayor Miller asked for Council response to Council Member Biles'
proposal.
Council Member Young stated that he was 100% behind the proposal.
Mayor Pro Tem Brock felt that the City's formation of the EDC was
based on the idea that there would be a new source of funding.
That was the only reason for the formation of the EDC. She felt
that a mistake was made in appointing the Board before the sales
tax election.
Council Member Biles asked if the economic development sales tax
did not pass, was Mayor Pro Tem Brock recommending that the EDC be
dissolved.
Mayor Pro Tem Brock indicated that that was one of the issues which
still remained. She was concerned about using General Fund dollars
to increase the funding to the Chamber.
Mayor Miller stated that Council Member Biles' suggestion was to
set a deadline to continue to contract with the Chamber and then
discontinue funding after that date.
Mayor Pro Tem Brock stated that over the last several months she
had lost confidence in the EDC Board. She felt that Council Member
Biles had a good point in that there needed to be a decision on the
issue.
City Manager Benavides stated that the City would meet the
Chamber's commitment until March 31st. The City would treat it as
any other board, support them with staff and incur the cost
involved in economic development until the election. After that
point in time, they would have their own money to hire their own
staff.
Mayor Pro Tem Brock felt that the City would have to give the
Chamber considerable staff support until after the sales tax
election.
Council Member Biles felt that the Chamber had not been effective
in delivering the product for which the City had been giving them
money for over the years. It was time for a policy decision to be
made and time to move forward.
Mayor Pro Tem Brock stated that several years ago, the city entered
into a contractual relationship with the Chamber. The city was
City of Denton City Council Minutes
August 9,1996
Page 12
45
going to share the cost of an economic development operation which
would be based in the Chamber. At the same time, the city would
have an economic development office in the City government. If the
Council followed Council Member Biles' suggestion, it would be
saying that it felt the Chamber had not done a good job and
therefore would be ending that contractual relationship. There was
another body in place which had a contract with the Chamber. There
was a charter for that body and Council Member Biles' suggestion
was to give that body more direction. But the charter of that body
was changed drastically from the State direction. Every bit of
Council control, which was not absolutely required by State law,
was removed. The EDC would not have to follow the city's control
except by the annual review of the program and budget.
Mayor Miller stated that a positive view of the proposal was that
since the EDC had been formed, which was set up at the request of
the Chamber and others, a wayto provide economic development was
to make the board accountable and responsible as a City board.
There would be an obligation to continue to contract with the
Chamber until March 31st. Currently the EDC had been spending most
of their time worrying about the funding issue of the sales tax
election instead of getting on with economic development. As per
an earlier discussion, the EDC would begin to function as an
economic development corporation and that the responsibility for
determining the sales tax election and associated factors would no
longer be their responsibility. That would be the responsibility
of a task force established by the City Council. The Council
appointed the members of the EDC and the law clearly stated that
those members served at the will of the Council. If one or more of
those members did not do what the Council needed to be done in
terms of economic development, the Council needed to replace those
members.
Mayor Pro Tem Brock stated that this might be perceived that the
City was blaming the Chamber for economic conditions.
Council Member Young felt that the Council was not indicating that
the system did not work for the past 10 years, it was indicating
that things could work better.
Mayor Pro Tem Brock stated that she had heard that the Chamber
planned to house the EDC in conjunction with their building
expansion. The Council was proposing to spend the public's money
to support this function. It would be divorced from the Chamber.
How did that differ from the public perception that the City was
setting up a government entity which would be funded 100% by the
public and would be housed in the Chamber of Commerce. It was a
function which had been directed by the Chamber and half funded by
the public.
Council Member Biles stated that if the EDC received $3-3.5 million
city of Denton City Council Minutes
August 9,1996
Page 13
a year, he doubted if they would want to be in the Chamber
building.
Mayor Pro Tem Brock stated that the Chamber felt that they would be
there.
Council Member Cott stated that too much effort had been spent on
the way how to get the sales tax and no effort on economic
development.
Council Member Beasley felt that it was not possible to have three
economic development operations. The previous City Council decided
to proceed with an economic development corporation which was now
in place. The corporation had been formed and had no funding. It
was suppose to be funded with a sales tax election which had not
yet been held. She felt that it should be separated from the
Chamber and should be a city function. She had a problem with
funding the EDC to the amount they were requesting when she was
unsure of what they were asking for, what would be done with the
money and what the plans were for the year. Until the sales tax
passed or failed, they should be on a small budget and the city
should not put a lot of money into it.
Council Member Biles stated that the $197,000 was less than what
was expended last year to do the same thing.
Mayor Pro Tem Brock asked where the money came from last year.
Council Member Biles replied from the City and the Chamber.
Council Member Young felt that the Council was in favor of severing
ties with the Chamber in March and that a task force would be
formed.
Mayor Miller stated that the task force would be accountable to the
City Council and not to the EDC. He felt that each Council Member
would appoint two people to the task force plus the original 13
members. A chair would be selected from the task force. These
would be appointments and not nominations. The charge for the task
force would include evaluating 4A and 4B, the amount of the sales
tax and possible uses of the money.
Council Member Young felt that the task force would be responsible
for promoting the passage of the sales tax increase.
Mayor Miller felt that there were two issues - economic development
and funding. The EDC was a corporation set up by the City Council
to carry out economic development. The job of the EDC was to
promote the city and establish goals and objectives and criteria
for what was necessary to succeed. At some level, still to be
determined, that would be funded. The Council had directed the EDC
City of Denton City Council Minutes
August 9,1996
Page 14
47
to subcontract the services with the Chamber of Commerce. The
resolution indicated that this would end as of March 31st. It
would be funded for the next year but the funding would be for the
balance of the fiscal year.
Council Member Beasley asked if the charge for the task force would
include deciding what amount of sales tax to ask for, what the
money would be spent on and whether to form a 4A or 4B corporation.
Mayor Miller replied correct. The task force would study the issue
and would recommend what would be best for the community and then
promote that issue.
Council Member Biles
on whether to form
formed a corporation
would be formed.
was not sure that the task force should decide
a 4A or 4B because the Council had already
on the premise of the recommendation that a 4A
Mayor Miller felt that the task force should have the option to
study 4A or 4B.
Council Member Biles felt that the course had already been set for
4A for economic development.
Mayor Miller felt that the way to allow the task force to determine
a recommendation which would most saleable to the citizens would be
to give them more leeway.
City Attorney Prouty stated that the City had formed a corporation
under 4A of the Economic Development Act. It was set up before the
sales tax election was held. A 4A and 4B could be held in the same
election.
Mayor Pro Tem Brock stated that the task force could possibly
recommend a 4A and provisions for a 4B but could not have a 4B
election in lieu of a 4A election.
City Attorney Prouty stated that there was an economic development
corporation formed under Section 4A. If the task force recommended
4B it could recommend a sales tax election under 4B and then
convert the 4A to 4B or dispense with the 4A and create a new 4B
corporation after the sales tax election.
Council Member Biles felt that he could not go in that direction as
the Council had already made a policy determination of which path
would be pursued. He was unwilling to return to having to make a
decision between 4A and 4B.
Mayor Miller stated that he was concerned about the passage of the
sales tax increase. He felt that the task force should have the
opportunity to study the options of 4A and 4B. By limiting the
48
City of Denton City Council Minutes
August 9,1996
Page 15
study to 4A, the probability of success of passing the tax would be
limited.
Betty McKean, Executive Director for Economic Development and
Municipal Services, stated that 4B's original intent was to be
project specific. As the program had evolved, it could be an
ongoing list in which the 4B sales tax revenue would not have to be
retired. Other projects could go on as there was an active board.
A list of projects was needed but it could be an ongoing list.
With 4A, strategic efforts would be listed on the ballot and with
4B specific projects would be listed. The 4B board could be
overlapped with what was in place currently, there could be two
separate boards or the Council could be the 4B corporation.
Mayor Pro Tem Brock stated that Euless had passed a 4B corporation
'with some projects which were economic development projects. They
also had an eighth of a cent which was allocated in general for
economic development. Euless was able to sell the sales tax to its
citizens because one eight of a cent was for economic development
and three eighths were for projects which the citizens could see
would benefit the community.
City Attorney Prouty stated that there was more flexibility under
4B than 4A. Under 4B, the projects were more likely to be tax
exempt and the feeling when the EDC was formed, was to create
projects which were taxable in order to increase the tax base.
Under both types of corporations, economic development could be
done and there were more specific municipal/public works type
projects in 4B. One election could probably be held for both a 4A
and 4B sales tax and split between the two. One reason for going
with a 4A corporation was that the board did not want to have a
public hearing before ea=h specific project was done.
Council Member Young stated that the concept was started with a 4A
project and he would continue to support a 4A corporation.
Mayor Miller asked for the City Manager's comments on the issue.
City Manager Benavides wished that the EDC would allow the
discussion on the 4B. He was afraid that the EDC was locking all
other options out and that the election would fail.
City Attorney Prouty stated that if the Council went with a 4A and
4B there would be a need for two separate entities as the
requirements for the boards were very different. A corporation
would prefer to have a 4B as the 4B would own the existing site as
it then would be tax exempt. The 4B would then lease the site to
the corporation.
Mayor Miller asked if the Council was in agreement to have the
staff prepare a work session discussion on the sales tax task force
City of Denton city Council Minutes
August 9,1996
Page 16
with the understanding that a resolution would be prepared to be
considered on September 3rd to appoint the members, etc. The
Council would then discuss the charge for the task force.
Consensus of Council was to proceed with that discussion.
Mayor Miller asked if Council was in agreement that as of March
31st, the City would no longer be subcontracting with the Chamber
so that budget preparations could be made at this time.
Council discussed the proposed budget of the EDC and the amount of
funding which the City would provide.
DuBose indicated that the City was already committed to $125,000
for funding.
Mayor Miller asked how this would come back to Council and how it
would be communicated to the EDC and the Chamber.
city Manager Benavides stated that the EDC would meet on August
21st and the Council could consider this on August 27th.
Consensus of the Council was to proceed with the proposal to
discontinue services as of March 31st.
With no further business, the meeting was adjourned.
49
~]~NNI~ ~ALTERS
~ITY SECRETARY
CITY OF DENTON, TEXAS
~S
ACC0032E