October 14, 2008 Minutes
CITY OF DENTON CITY COUNCIL MINUTES
October 14, 2008
After determining that a quorum was present, the City Council of the City of Denton, Texas
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convened in a 2 Tuesday Session on Tuesday, October 14, 2008 at 4:00 p.m. in the City
Council Work Session Room at City Hall.
PRESENT: Mayor Burroughs; Mayor Pro Tem Kamp; Council Members Heggins, Moreno,
Mulroy, Thomson, and Watts.
ABSENT: None
1. The Council received a report, held a discussion and gave staff direction regarding the
establishment of a Tax Increment Reinvestment Zone for Downtown Denton.
Linda Ratliff, Director of Economic Development, stated she had attended a TIF workshop in
Austin last Friday and would interject any new information she had learned at the appropriate
time.
Ratliff stated that during a prior Council discussion regarding TIFs, a request had been made to
evaluate the impact if the properties on the west side of Carroll Blvd. and the south side of Eagle
Drive were removed from the TIF boundaries. The total estimated revenue of the TIF was $46
million. A recalculation of the TIF revenue, excluding these properties, amounted to
approximately a $4.4 million reduction over the 30-year term. Ratliff also calculated how much
would go to the general fund and the TIF fund, and also calculated the County’s contribution to
the TIF fund. With this calculation, the total estimated TIF revenue was $41.6 million.
Council Member Mulroy requested that the minutes of the EDP Board meetings be made
available to the Council.
Mayor Burroughs asked what the reason was for proposing the change in the boundary of the
TIF.
Ratliff replied that the original downtown master plan did not include all the area of the TIF.
The boundaries were expanded to the north to include drainage improvements, to the east around
the downtown transit center, to the west of Carroll Blvd. and south of Eagle were added.
The Council had requested detail on the types of projects to be considered for TIF funding. The
following were listed:
Parking/Transportation, Streetscape Projects, Support for Downtown Projects, Utility
Improvements
Ratliff stated that staff was in the process of developing an implementation plan for downtown.
This plan would address future parking needs, zoning analysis, design standards for downtown
and the area around the transit station, open space and solid waste service. Staff recommended
that the implementation plan be completed before approval of a specific TIF project.
Ratliff stated that the Council had discussed establishing a target ratio of single family to multi-
family units within the City. Since the preferred ratio had not been determined yet, it was staff’s
recommendation to allow a higher density in downtown.
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October 14, 2008
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Ratliff stated that in the feedback from other cities, the Arlington comments indicated that one
thing the Council might want to consider was to include the ability to allow Chapter 380 grants.
Bryan Langley, Director of Finance, reviewed the City’s five-year forecast and the long term
financial impact of the TIF to the General Fund. The impact of the TIF on the General Fund
would be a reduction in the ad valorem tax revenues by an average of $119,681 from FY 2010 to
FY 2013. Based on the assumption that appraised values would continue to increase, the
forecast predicted that ad valorem tax revenues would be reduced by an average of $360,510
from FY 2014 to FY 2018 and $641,532 from FY 2019 to FY 2024.
Mulroy stated that in order to achieve the 15% reserve fund balance they were looking at a
potential, over the next 5 years, $0.0847 tax increase.
Langley recommended that if the Council wanted to increase the tax rate to offset and recapture
some of the revenue to spread it out over a number of years.
The Mayor questioned whether the next CIP bond package would be reduced if the GO Debt
Service Fund was expected to be reduced.
Langley replied that it would see a reduction also.
Ratliff indicated that a concern was raised regarding use of TIF funds to pay for utility
improvements within the TIF, which would normally be paid by the utility ratepayer. Utility
infrastructure was a qualified use of funds within a TIF. The Council could choose to remove
“utility improvements’ from the eligible projects list or limit the utility improvements to drainage
improvement projects, a General Fund operation.
Ratliff stated that there were certain criteria that had to be met for an area to be designated as a
TIF area. The criteria included – substantial number of deteriorating or substandard structures;
inadequate sidewalks or street layout; faulty lot layouts; unsanitary or unsafe conditions;
substandard and aging sewer and water lines; tax or special assessment delinquency that
exceeded the fair market value of the land; defective or unusual conditions of title; conditions
that endangered life or property by fire or other cause; area was predominantly open due to
obsolete platting, deteriorated structures or other factors that substantially impaired the growth of
the local government; the area was in or adjacent to a federally assisted new community. Ratliff
also stated that if the area met the criteria to establish an enterprise zone, then it automatically
met the criteria of a TIF.
The Council discussed enabling legislation. Council Member Mulroy requested that the City
Attorney provide a follow-up memo to Council regarding enabling legislation.
Ratliff stated that the purpose of creating the TIF was to redevelop the area. The criteria was the
reason for creating the TIF.
City Attorney Anita Burgess stated that it really was a question of whether or not this project met
the minimum criteria.
Ratliff reviewed the powers of the TIF Board. She stated that the Council could authorize the
board to exercise any of the City’s powers with respect to administration, management or
operation of the zone or the implementation of the project plan for the zone. However, the City
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October 14, 2008
Page 3
could not authorize the board to issue bonds, impose taxes or fees, exercise the power of eminent
domain, or give final approval to the project plan. The Council could limit the powers of the
Board in the language of the ordinance that established the board.
The Council discussed other aspects of the TIF with members of the Economic Development
Partnership Board and the Downtown Task Force.
Council Member Mulroy stated he would like to see some data on potential sales tax.
Ratliff stated that something else she learned at the workshop in Austin was that the city could
amend the finance plan and redirect the TIF funds to the General Fund for safety and security
purposes, and had to allow the county to amend their fund also.
Ratliff stated that at the workshop she had attended last week, she also learned that the city could
use TIF funds outside the allowable district as long as the funds were used for affordable housing
or a transit-related use.
The Council discussed the direction they wanted to go with the TIF.
Ratliff stated that staff would provide the following information to the Council: information
regarding eligibility criteria, and information Ratliff had learned at the Austin workshop
regarding diverting funds.
Ratliff stated that the Council would have to adopt the ordinance forming the district by
December 6 in order to use 2008 property valuations for a basis. If they did not adopt the
ordinance by December 6, the City would use 2009 property valuations for a basis. Once the
ordinance was adopted, it was effective immediately.
Ratliff asked the Council if they wanted to bring the item back to another work session or
proceed with a public hearing and adoption of the ordinance, and if so what boundaries did they
want included in the TIF.
Council Member Watts indicated that he would like to see the implementation plan for
downtown completed.
Consensus of the Council was to bring this item back to another work session. The Council also
requested that staff provide a draft ordinance with a sample agreement, criteria for forming the
district, identify the criteria under which the downtown TIF for the city would be established,
and to include the properties shown in black on the map in the TIF boundary.
With no further business, the meeting was adjourned at 6:28 p.m.
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MARK A. BURROUGHS JANE RICHARDSON
MAYOR ASST. CITY SECRETARY
CITY OF DENTON, TEXAS CITY OF DENTON, TEXAS