Minutes February 11, 1997344
CITY OF DENTON CITY COUNCIL MINUTES
February 11, 1997
The Council convened into a Closed Meeting on Tuesday, February 11,
1997 at 5:45 p.m. in the Civil Defense Room of City Hall.
PRESENT: Mayor Miller; Mayor Pro Tem Brock; Council Members
Beasley, Biles, Cott, Durrance, and Young.
ABSENT: None
1. The Council considered the following in Closed Meeting:
A. Legal Matters -- Under TEX. GOV'T CODE Sec. 551.071
Received attorney-client privileged legal advice on
legality of provisions within the proposed
ordinance rewriting the Zoning Chapter of the City
Code relating to appropriate zoning district
classifications within which parochial schools
should be located and the specific use permit
process.
B. Real Estate -- Under TEX. GOV'T CODE Sec. 551.072
Personnel/Board Appointments -- Under TEX. GOV'T CODE
Sec. 551.074
The Council convened into a Special Called Meeting on Tuesday,
February 11, 1997 at 7:00 p.m. in the City Council Chambers.
PRESENT: Mayor Miller; Mayor Pro Tem Brock; Council Members
Beasley, Biles, Cott, Durrance, and Young.
ABSENT: None
1. The Council considered approval of an ordinance of the City of
Denton authorizing the Mayor to execute on behalf of the City of
Denton a memorandum of understanding with N.W. Realty, Inc. and
Terrano Realty, Inc. relating to economic development program
incentives for International Isotopes, Inc. (AIPC) to effectuate an
expansion of operations and an increase in employment levels of
AIPC in Denton by locating facilities in 475 acre North Texas
Research Center.
Linda Ratliff, Director of Economic Development, stated that this
ordinance would authorize the execution of a memorandum of
understanding for the purpose of constructing a 2,332 foot road.
Although the road was not proposed on the CIP program at this point
in time, it had always been on the long range thoroughfare plan.
The property owners had asked to expedite the construction of that
road for the purpose of locating a medical isotope company on that
DroDerty. The company was very interested in Denton and had had a
relationship with the University of North Texas for several years.
The location of the company could ultimately greatly benefit the
University. The cost of the road was estimated at $606,000 with
engineering and design costs of another $103,000. The property had
two options related to the construction of the road. If the City
constructed and designed the road, the total cost of the project
would be $709,000 with an 18 month term once the City received
city of Denton city Council Minutes
February 11, 1997
Page 2
345
written notice from the property owners to proceed. If the
property owners provided the City with the design plans, the cost
of the project would be $606,000 and take 12 months to complete
from written notice to proceed. In consideration of the road, the
property owners would dedicate the right-of-way and guarantee that
two buildings would be built with a total value of $4.75 million.
The structures would be equipped with personal property valued at
approximately $7.5 million. They would also guarantee that a
payroll of $4 million would be obtained by the end of the fourth
quarter of 1999. The property owners would execute a promissory
note in the amount of the construction, design and engineering
costs, if included. A deed of trust for the property would be
provided as collateral for the purpose of reimbursing the City
should the improvements or personal property values not be met.
Since it was anticipated that this location would generate more
development in the area, the contract would allow the property
owners to sell or develop other pieces of land. Depending on the
total amount of the note, the property owners would transfer $1,500
for a $606,000 note or $1,700 for a $709,000 note into an escrow
account to reduce the principle of the note. All sales of any
property in that tract would be approved bythe City of Denton. If
at the end of a three year term of the note, the combined total of
the improved value of the new structures and equipment was
$12,250,000 or greater or the payroll generated at the North Texas
Research Center was $4 million or greater, the responsibilities of
the property owners would be considered met and the note would
expire. If at the end of the three year term, the improved value
or the payroll thresholds were not met, the property owners would
reimburse the City for the amount of the note. Consideration would
be given for any improvements made over the three years. The
contract provided a formula of the amount of the promissory note
less an increase in City of Denton annual property tax revenues
times ten years.
Mayor Pro Tem Brock asked if the amount of repayment would increase
annual taxes based on the actual tax figures. That would not be
known until a new appraisal was done after the improvements.
Ratliff replied correct.
chris Coil stated that he had some major concerns regarding this
facility. He had a concern when such a large facility would be
producing radioactive materials. He questioned if an environmental
impact study had been done on what would happen with this facility
in place. He had a concern dealing with fact that Denton just had
a lopsided election dealing with the recent EDC vote and whether to
use sales tax money for private entities in order to promote
growth. The public decided that that was not a proper use of tax
dollars. He did not think it would be proper following the results
of that election to spend taxpayers money to build this road.
Other roads in the city were a priority. He was curious if traffic
studies had been done in the area. He did not see any kind of
traffic flow into that area.
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February 11, 1997
Page 3
Dorothy Damico stated that she had three points regarding this
issue. She had been gathering information regarding the proposal
and felt that it would be an excellent company for Denton. It was
high tech/high salary and good for the community. She supported
the company in Denton. Because she was involved in the group that
educated voters who ultimately voted against the recent sales tax,
she wanted to assure Council that many who voted against that
package were not opposed to economic development activities. There
were a number of people who were opposed to the idea of having tax
dollars spent to directly benefit private developers for private
businesses. This appeared to be such a case. If so, there were
many questions she would need answered before she could completely
support the proposal. Such a question would be if there was a real
need for the road in order to have the company. Could the
developers do part of the project. She did not support 100% the
City's participation in the project.
Council Member Cott asked what would happen if the petitioner
indicated that he would not come to Denton without the road.
Damico replied that the tax payers in the City of Denton were
people she knew. She would have to consider whether or not to ask
them to support this project.
Mayor Pro Tem Brock stated that she would like to deal with some of
the questions raised by Mr. Coil. The Council was aware of the
magnitude of the recent election. One of the things said by many
of the leaders of those who were working against the sales tax was
that a special designated tax was not needed. There was no need
for a separate group to make decisions without open discussion or
without the recall that elections provided. They indicated that
projects such as this could be created within the structure of the
City Council in full view of the public with citizens able to
express their opinions. Even though some felt that the timing was
very unfortunate, Council felt that the timing might be good as it
would show that the system in place still worked. She initially
had some concerns about safety and environmental issues. The City
did not deal directly with issues of this type. This was a very
highly regulated matter on the federal level and the manufacturer
had to receive permits from federal agencies. The city did not
have the expertise or authority to regulate those environmental
decisions. The fundamental answer as to whether to spend taxpayers
mOney for such a project was would the project create new taxes.
There would be a payback for this development. This was a unique
project and did something that many wanted which was to bring very
high tech jobs to Denton. It would bring jobs related to the assets
which the community had. She saw this as creating other jobs and
developments which would be similar in nature. She felt it was
appropriate for Denton to have a research oriented development of
this kind and it would be valuable as it would be the first of this
sort.
Council Member Young stated that the road was going to be built
anyway. Money would be saved in the long term as the company
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February 11, 1997
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347
would be paying for the road. This project did not have anything
to do with the sales tax. The people who voted against the sales
tax were not against economic development. He felt this was
economic development at its best. It would bring good high paying
jobs to Denton and eventually be a research center for north Texas.
Mayor Miller stated that the safety aspect of the project was
regulated by several governmental agencies both in terms of
creation and utilization. He was delighted that the company would
consider Denton for this proposal. The City had an opportunity to
develop not just one proposal but over 400 acres of a research
park. The Vision project for Denton worked on what the community
would look like 20 years from now. One aspect of the Work Group
was a research park to bring in high tech - high paying jobs to
broaden the tax base. He felt it was appropriate to spend tax
dollars to leverage this aspect of the vision project.
Council Member Beasley stated that there had been questions about
the project but felt that they had been answered to everyone's
satisfaction. The consensus of feeling from the citizens was that
this was a good project. She was sorry it was coming at this
particular time when the City was trying to continue with economic
development. She felt good about the project and knew that there
would be some continued questions about the project. She felt that
by putting the road in the City would recoup the tax money very
quickly.
The following ordinance was considered:
NO. 97-040
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE MAYOR TO
EXECUTE ON BEHALF OF THE CITY OF DENTON A MEMORANDUM OF
UNDERSTANDING WITH N.W. REALTY, INC. AND TERRANO REALTY, INC.
RELATING TO ECONOMIC DEVELOPMENT PROGRAM INCENTIVES FOR
INTERNATIONAL ISOTOPES, INC. (AIPC) TO EFFECTUATE ANEXPANSION
OF OPERATIONS AND AN INCREASE IN EMPLOYMENT LEVELS OF AIPC IN
DENTON BY LOCATING FACILITIES IN THE 454 ACRE NORTH TEXAS
RESEARCH CENTER AND DECLARING AN EFFECTIVE DATE.
Young motioned, Cott seconded to adopt the ordinance.
Mayor Pro Tem Brock stated that no city money would be spent and no
city activity would be initiated until all promissory notes and
other legal papers were signed and in place.
On roll vote, Beasley "aye", Brock "aye", Cott "aye",
"aye", Young "aye", Biles "aye" and Mayor Miller "aye".
carried unanimously.
Durrance
Motion
Following completion of the
convened into a Work Session
considered:
Special Called Session the Council
at which the following items were
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city of Denton City Council Minutes
February 11, 1997
Page 5
1. The Council received a report, held a discussion
staff direction regarding the final recommendations
Diversity Task Force.
and gave
of the
Mary Ann Fulgium, Acting Director for Human Resources, stated that
on November 12, 1996 Dr. Richard Lewis, a diversity consultant,
presented a report of findings and recommendations to Council. On
December 28, 1996 Dr. Lewis sent additional recommendations which
were included in the back-up. These recommendations would effect
the organization internally and the community externally. Staff
was recommending that some of the recommendations be taken into
consideration. The first would be to implement a diversity
management panel. This panel would be chaired by the Director of
Human Resources and would consist of other management who would be
designated by the Director of Human Resources. This panel would
ensure the implementation of the recommendations which were
approved bythe Council. It would be given a sunset review date in
order to complete the recommendations. The City's Work Force
Diversity Committee would continue to serve as an advisory group to
the Director of Human Resources. Other recommendations would be to
expa~dthe current internship program; establish mobility positions
which would give internal employees the opportunity to cross train
and move upward in the organization; training for the unemployed
and underemployed which would expand on such programs as the summer
youth program; create an employee recruitment plan; consider off-
site Civil Service examinations; update the compensation plan; and
investigate considerations for disadvantaged business. Staff was
asking direction on implementing these recommendations.
Mayor Miller asked if staff had any recommendation for a sunset
date.
Fulgium suggested waiting until all recommendations were completed
and then decide a date at that time.
Mayor Pro Tem Brock asked about the funding for the mobility
positions. Would these be new positions.
City Manager Benavides indicated that these would be new positions.
Mayor Pro Tem Brock asked if they would be similar to internships.
City Manager Benavides stated that the positions would be like
internships and the individuals would probably spend time in other
departments to learn how the City worked.
Mayor Miller assumed that the diversity management panel would take
up each of the recommendations and after discussions with the City
Manager and staff, return them to the City Council. Budgetary
needs would be handled at that time.
Council Member Beasley stated that most of the recommendations of
the task force had been put in a manageable way to address those
issues.
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February 11, 1997
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349
Consensus of Council was to proceed with the recommendations.
2. The Council received a report, held a discussion and gave
staff direction regarding the Texas Department of Transportation's
Routine Airport Maintenance Program (RAMP).
Linda Ratliff, Director for Economic Development, stated that the
Texas Department of Transportation had development a new project
for routine maintenance at airports. Staff had visited with TxDot
individuals who inspected the Airport and who identified
maintenance projects for a 50-50 grant. TxDot was asking that the
City enter into a contract with them and each year they would
inspect the Airport to identify projects. The State would
participate in a grant up to $10,000. The City would have the
opportunity to decline participating in any year. Once the
projects were identified, TxDot combined all of the airports in the
region and sent all of those projects to bid for lower costs of the
projects. The City would not have to bid or manage the project.
The first proposed project was for erosion control in which there
would be some reseeding and reshaping of the drainage channel.
Another project was to paint the south access road to the t-
hangers yellow. Herbicide and vegetation control would also be
done. The total cost of the projects would be $19,426 with the
City paying $9,713. Staff recommended that the City enter into the
contract and participate in the program for this year. Staff was
also requesting to take $9,000 from excess funds left over when the
Economic Development Corporation was terminated.
Council Member Cott asked if any tenants at the Airport were late
on payments to the City.
Mayor Miller stated that that was not listed on the agenda for
discussion.
Council Member Cott suggested having the Airport Board create a
relative marketing concept of all area airports and see why the
City should stay in this business.
Mayor Miller felt that this was a whole different issue to be taken
up at a future time. Staff was seeking a recommendation for
specific funding.
Mayor Pro Tem Brock asked what was spent annually on maintenance.
Ratliff stated that she was not sure at this point in time. Most
of the maintenance was done by the Parks Department.
Council Member Young asked if the Airport was making money.
Ratliff stated that the revenues from the Airport were put directly
into the operating account. The Airport did not operate off
revenue.
city Manager Benavldes stated that it probably was in the red.
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February 11, 1997
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Council Member Young felt that a tower was needed at the Airport
especially with added traffic from the speedway.
Mayor Miller stated that that was not a point for discussion.
Council Member Beasley felt that this was another economic
development project. She felt that the Airport would be beneficial
to the City if it could be put into the kind of .shape needed to
attract people to use it.
Mayor Miller asked if the proposal had been reviewed by the Airport
Advisory Board.
Ratliff stated no but it would be discussed the next day at their
meeting.
Consensus of the Council was to proceed with the proposal.
Council Member Cott felt that a marketing plan was needed.
Mayor Miller suggested that Council Member Cott include that
suggestion at the end of a Regular Session and put it on an agenda
to see if Council was interested in doing such a study.
3. The Council received a report, held a discussion and gave
staff direction regarding 1997-98 Airport Improvement Plan projects
and the funding thereof.
Linda Ratliff, Economic Development Director, stated that this year
money from the FAA would be received through the Texas Department
of Transportation. Staff had visited with FAA and TxDot for
possible funding for projects on the Airport Master Plan. Two
projects were proposed. One was a reconstruction of the terminal
apron at a cost of $1 million. Because the FAA did not have
funding this year, that project would not be considered. Only
safety related projects would be considered. The second project
was safety related but it had a moderate rating. The City would
have about a 50-50 chance for money this year from FAA through
TxDot. The City's 10% share would be $10,000. TxDot had requested
a resolution from the Council stating that the City was interested
in the project and would reserve $10,000 to apply towards the
project should funding be received. If desired by Council a
resolution would be presented at the next meeting. Money for the
project would be used from the excess from EDC funds.
Council Member Beasley stated that this project would be an
enhancement to the Airport. This was a safety issue and would make
the Airport safer in the future.
Consensus of Council was to proceed with preparing a resolution for
consideration.
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February 11, 1997
Page 8 .... ~ ......
351
4. The Council received a report on the schedule for City Hall
renovation.
Bruce Hennington, Facilities Manager, discussed the reconstruction
phases of the project as detailed in the agenda back-up materials.
Rick Svehla, Deputy City Manager, stated that City Council meetings
would be held in the Jury Selection Room which was a large room
with good visuals and acoustics. That room had seating for 100
citizens with the ability to do sound and television. It also had
space for Executive Sessions. The Council would have to pass an
ordinance indicating the change in meetings rooms.
Mayor Miller asked when the move would take place for the Council
meetings.
Rick Svehla, Deputy city Manager, stated that the first meeting in
July would be in held in the Jury Room.
Mayor Pro Tem Brock stated as compared with other cities, the
Council Chambers had about the same amount of seating. Money was
going to be spent to bring the building up to code with sprinklers
and ADA requirements. Electrical work, heating and fire exits
would also be improved.
Consensus of the Council was to proceed with the ordinance to
accept the bids.
5. The Council received a report, held a discussion and gave
staff direction on the Emergency Management Plan.
Ross Chadwick, Fire Chief, stated that the plan was based on four
basic principles. Mitigate emergencies from happening in the first
place, prepare for those emergencies, respond to those emergencies
and recover from those emergencies. The basic plan set the
foundation for all responses. The State guidelines and format were
used but was made specific to Denton. The keys for effective
emergency management were to have a disaster plan in place and
ready to be implemented. Good standard operating procedures should
be in place with adequate checklists, adequate training and
exercises, use of a standard emergency management system, an
effective emergency operations center and community integrated
emergency management system. A goal was to complete all of the
above projects so as to be ready for any emergency which might
happen.
Consensus of the Council was to proceed with the Droject.
6. The Council received a report, held a discussion and gave
staff direction regarding the Bolivar Water Supply Corporation
Service Area issues.
Bob Nelson, Executive Director for Utilities, stated that this
service area was north of the City. The area was in Denton's
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City of Denton City Council Minutes
February 11, 1997
Page 9
extraterritorial jurisdiction (ETJ) in 1976 when the PUC
established the certified area when the various utilities could
operate. At that time the City made application to cover its ETJ.
Shortly thereafter, several individuals wanted water and the
Bolivar Water Supply Corporation began extending lines into that
area even though they did not have certification to do so. In 1992
Bolivar was in need for funding to expand their system and went to
the Federal Government for a loan. One of the provisions of that
loan was that the District needed a certificate to serve in the
area and could not lose that territority and thus be unable to pay
back the loan. The City asked the TNRCC to make the area dual
certified similar to Argyle but because of the loan criteria, the
TNRCC granted a single certification to Bolivar. The only concern
about the transfer was that in the event that an urban development
was proposed in the area, a large amount of paper work was required
to have the CCN back in Denton's name. The current service policy
was to allow the individuals in the area to drill a well or have
the normal extension policy from the nearest line. There were
several options to consider with this proposal. One option was
that Denton continue it's present position which was to allow
individual properties which had requested a transfer from Denton' s
single CCN to the Bolivar Water Supply Corporation, to do so
without contesting such a transfer. Option two would be to grant
a blanket transfer of the CCN to the Bolivar Water Supply
Corporation for all properties adjoining the present service.
Staff's recommendation was to proceed with the second option.
Possible conditions for Option 2 included that Denton would
purchase the water lines at net book value, the city would not be
obligated to pay any fee to Bolivar for lost revenue of existing or
future potential customers; Denton would pay Bolivar for a period
of five years or until they had enough growth in the area to equal
the area that would have been taken.
Council Member Cott stated that Denton had been asked by Austin to
stay away from the area. He suggested waiting until the citizens
requested the service.
Nelson stated that the residents had asked for Denton water. This
area was not seen as a market share or market profit. Denton only
wanted to serve what the customers wanted. If that area sometime
in the future became urban and wanted urban type densities, there
would be a need for some type of fire protection in the area.
Council Member Beasley asked that if option two were adopted and in
the future someone outside the area who was now within 200 feet of
Bolivar's water line wanted water, would the process start again.
Nelson replied that that might be a case by case basis.
Mayor Miller stated that part of the issue was political. They had
had visits with State Representatives and there were a number of
people in the area who did not like option 1. If no other type of
solution was suggested, legislation would probably be introduced
which would put the TNRCC in charge and not Denton. If something
City of Denton City Council Minutes
February 11, 1997
Page 10
353
were not done, it would be done for Denton.
Council Member Biles stated that when the TNRCC prepared the
certificate of transfer order, they would insert an agreed upon
valuation methodology and thus conditions would be put into the
order to transfer from Denton to Bolivar. That would bind the
legal relationships between the two parties.
Nelson replied correct.
Council Member Biles asked if that were to happen, would Bolivar
have the. opportunity to protest a transfer in the future or were
they bound by the transfer order.
Nelson stated that the implied issue was that Bolivar would not
protest.
Council Member Biles suggested including another condition in which
Bolivar could not protest a transfer back to Denton. He asked if
this was a contract matter from a regulatory point of vie~.
City Attorney Prouty stated that it could be a contract with
Bolivar with all items indicated under the circumstances when
Denton would give up its CCN and the circumstances under which
Bolivar would retransfer to Denton. That contract could be
incorporated as part of the order from TNRCC.
Council Member Biles stated that he had seen correspondence from
1996 indicating that Denton would not oppose individual transfers
from Denton to Bolivar. He requested wording as suggested for a
transfer back from Bolivar to Denton. He requested that the city
Attorney advise Council as to whether a contract could be
incorporated between the two entities and put into the TNRCC order.
Council Member Durrance asked if future expansion with regards to
Lake Ray Robert was within growth guidelines as far as inclusion in
the area.
Nelson replied correct.
Biles motioned, Young seconded to proceed with Option 2 but to
further advise Council on a contract between the two entities. The
subject matter would be Option 2 and to amend Option 2 to include
an item that Bolivar would not oppose a retransfer of any subject
area back to the City of Denton.
Mayor Miller asked if his motion included having staff discuss the
item with Bolivar.
Council Member Biles replied correct.
On roll vote, Beasley "aye", Brock "aye", Cott "aye",
"aye", Young "aye", Biles "aye" and Mayor Miller "aye".
carried unanimously.
Durrance
Motion
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City of Denton City Council Minutes
February 11, 1997
Page 11
With no further business, the meeting was adjourned at 8:55 p.m.
TNI'FE~rWALTERS
Y SECRETARY
CITY OF DENTON, TEXAS
ACC00366