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January 6, 2009 Minutes CITY OF DENTON CITY COUNCIL MINUTES January 6, 2009 After determining that a quorum was present, the City Council convened in a Work Session on Tuesday, January 6, 2009 at 4:30 p.m. in the Council Work Session Room at City Hall. PRESENT: Mayor Burroughs; Mayor Pro Tem Kamp; Council Members Heggins, Moreno, Mulroy, and Thomson. ABSENT: Council Member Watts 1.Staff responded to requests for clarification of agenda items listed on the agenda for January 6, 2009. Council Member Thomson asked about the dollar amount for the base bid and alternatives for Consent Agenda Item O. Council Member Mulroy left the meeting with a conflict of interest. Tom Shaw, Purchasing Agent, stated that the alternatives were selected on what would be the most cost advantageous for the programs. The intent was to spend the dollars as efficiently as possible. He did not know the basis for the selection of the alternatives. The back page of the evaluation indicated the added options that increased the base amount. Council Member Thomson stated that if all the alternatives were chosen, the amount of the bid would be greater than the published amount. Gary DeVries, BRW, stated that there were six alternatives for the project. #1 was for the parking lot, #2 was for the painting of a number of existing rooms, #3 was for the retiling of the existing restrooms in the front of the lobby, #4 was for a new public address system, #5 was for an exhaust system for the wood shop, and #6 was for electrical outlets and pull down electrical cords for the wood shop. The total with the base bid was the number referenced. Mayor Burroughs stated that the CIP Bond Committee had forwarded a recommendation to research whether another location could be found as an alternative to an expansion of the current Senior Center. Emerson Vorel, Director of Parks and Recreation, stated that BRW did a full feasibility study for a smaller renovation to the existing structure, vacant properties, or to renovate other properties. With the funds available, these renovations were the best answer at this point in time. Council Member Mulroy returned to meeting. Council Member Mulroy asked several questions regarding Consent Agenda Item 3L - Western Blvd. He asked for a follow-up on the reason for the pipe failure. Mayor Burroughs asked about Consent Agenda Item J and if expanded times for review would be available. PS Arora, Wastewater Division Manager, stated that the times would not change. The engineers would be available on Mondays, twice a month for review. Plans could be turned in at any time but must wait until the next review date for acceptance. City of Denton City Council Minutes January 6, 2009 Page 2 Mayor Burroughs stated that the issue he had heard about was after the initial submittal but this time frame would not change Arora replied correct. Mayor Burroughs asked about Consent Agenda Item M and how partners were found for such contracts. Tom Shaw, Purchasing Agent, stated that in 2005 the Dallas ISD had bid for an outsourced fleet and since then other cities had done the same. Denton had done such a contract for three years to see how the program would work and had extended the contact from September to January to see what was going on with the market in terms of competition. This was a renewal for one more additional year to have the market develop. Council Member Mulroy had questions regarding Item 5B under Items for Individual Consideration relative to the airport lease and the indemnification clause and the non- performance clause. He asked that Legal review those provisions and have alternative wording ready for the consideration of the ordinance at the regular meeting. 2.The Council received a report, held a discussion, and gave staff direction regarding adding a section to Chapter 18 of the Code of Ordinances – “Use of Hand Held Mobile Telephones Prohibited in School Zones Roy Minter, Police Chief, provided an update on the proposed ordinance. There were two main aspects of the proposed ordinance. One was that the restriction would be only in school zones during school hours. The second was the restriction applied to hand held devices only. The ordinance also allowed for emergency situations. There were 31 school zones in the city and the estimated cost for two signs for each zone was approximately $1500 for the signs only, labor charges would be additional. An informational campaign and grace period of 30-45 days would be done regarding the ordinance. Research had also been done regarding the restriction of two way radios in school zones but this would be difficult to enforce due to FCC licensing agreements. The Traffic Safety Commission approved the proposed ordinance. Increased traffic enforcement had also been done in the school zones. Crossing guards had expressed concern regarding drivers paying attention in the zones. This ordinance was another step to increase driver awareness in school zones. The ordinance only applied to hand held devices in active school zones. Council Member Moreno questioned several schools that did not have marked school zones such as the Ann Windle School and the school at the Catholic Church. Frank Payne, City Engineer, stated that staff had talked with those schools about marked school zones but there were very few children walking to those schools and the schools felt zones were not necessary. Consensus of the Council was to proceed with the ordinance as presented. City of Denton City Council Minutes January 6, 2009 Page 3 Following the completion of the Work Session, the City Council convened in a Closed Meeting at 5:00 p.m. to consider specific items listed below under the Closed Meeting section of this agenda. 1.Closed Meeting: A. Consultation with Attorney – Under Texas Government Code Section 551.071. 1. Considered and discussed status of litigation styled David Johnson v. City of Denton, Cause No. 4:07cv449, currently pending in the U.S. District Court, Eastern District, Sherman Division. 2. Received legal advice and information from the City’s attorneys pertaining to the lawsuit that is currently pending involving Russell Pettway d/b/a Maaco Collision Repair and Auto Painting, Plaintiff v. the City, Defendant in Cause No. 2008-10344-16 pending in the 16th Judicial District Court in and for Denton County, Texas; discuss, deliberate, and provide the City’s attorneys with direction and any recommendations regarding such legal matter. A public discussion of these legal matters would conflict with the duty of the City’s attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. 3. Received legal advice and information from the City’s attorneys pertaining to the lawsuits that are currently pending involving the Texas Municipal Power Agency (“TMPA”) and its member cities, in Cause No. 28169 pending in the 506th Judicial District Court in and for Grimes County, Texas; Cause No. D-1-GN-08-003426, pending in the 126th Judicial District Court in and for Travis County, Texas; and Cause No. D- st 1-GN-08-003693, pending in the 261 Judicial District in and for Travis County, Texas, discussed, deliberated, and provided the City’s attorneys with direction and any recommendations regarding such legal matters. A public discussion of these legal matters would conflict with the duty of the City’s attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. B. Deliberations regarding Real Property – Under Texas Government Code Section 551.072; Consultation with Attorneys – Under Texas Government Code Section 551.071. 1.Discussed, deliberated, and received information from Staff and provided Staff with direction pertaining to the acquisition or the condemnation of several street right-of-way tracts and several temporary construction, grading and access easement tracts for Westcourt Road improvements, the limits of which being from F.M. 1515 (Airport Road) to Springside Road, in the City of Denton, Denton County, Texas. Consultation with the City’s attorneys regarding legal issues associated with the acquisition or condemnation of the tracts referenced above where a public discussion of City of Denton City Council Minutes January 6, 2009 Page 4 these legal matters would conflict with the duty of the City’s attorneys to the Denton City Council under the Texas Rules of Disciplinary Conduct of the State Bar of Texas, or would jeopardize the City’s legal position in any administrative proceedings or potential litigation. Regular Meeting of the City of Denton City Council on Tuesday, January 6, 2009 at 6:30 p.m. in the Council Chambers at City Hall. 1.PLEDGE OF ALLEGIANCE The Council and members of the audience recited the Pledge of Allegiance to the U. S. and Texas flags. 2.PROCLAMATIONS/PRESENTATIONS A. Proclamations/Awards 1. The Denton Lions Club Day 2. Presentation of the Achievement of Excellence in Procurement Award from the National Purchasing Institute Mayor Burroughs presented a proclamation for Denton Lions Club Day. Jon Fortune, Assistant City Manager, announced that the Materials Management Department had been awarded the Excellence in Procurement Award from the National Purchasing Institute. 3. CONSENT AGENDA Council Member Mulroy requested that Item O be removed for separate consideration. Mulroy motioned, Kamp seconded to approve the Consent Agenda and accompanying ordinances and resolutions with the exception of Item O. On roll vote, Heggins “aye”, Kamp “aye”, Moreno “aye”, Mulroy “aye”, Thomson “aye”, and Mayor Burroughs “aye”. Motion carried unanimously. Item O was considered Council Member Mulroy left the meeting with a conflict of interest. A Request to Speak Card was submitted by Richard Hunt who spoke in favor of the item. Kamp motioned, Thomson seconded to approve Consent Agenda Item O. On roll vote, Heggins “aye”, Kamp “aye”, Moreno “aye”, Thomson “aye” and Mayor Burroughs “aye”. Motion carried unanimously. Council Member Mulroy returned to the meeting. City of Denton City Council Minutes January 6, 2009 Page 5 A. 2009-001 - An ordinance of the City Council of the City of Denton, Texas authorizing the City Manager to execute a First Amendment to an Agreement for Professional Legal Services with Ford & Harrison, LLP for professional legal services relating to litigation styled David Johnson, individually and as class representative v. City of Denton Fire Department and City of Denton, Cause No. 4:07cv449, currently pending in the U.S. District Court, Eastern District, Sherman Division; authorizing the expenditure of funds therefor; and providing an effective date. B. Approved the minutes of: December 1, 2008 December 2, 2008 December 9, 2008 C. 2009-002 - An ordinance of the City Council of the City of Denton, Texas, approving the third amendment to that agreement between the City of Denton and the Denton Affordable Housing Corporation; authorizing the City Manager to execute the third amendment that will increase the current program budget by $78,684 and revise the requirements regarding program proceeds allowing DAHC to use funding for housing and administrative activities that may not fall within current HOME program regulations; and providing for an effective date. D. R2009-001 - A resolution of the City of Denton suspending the effective date of CoServ Gas Ltd.'s requested rate changes to permit the City time to study the request and to establish reasonable rates; approving cooperation with other cities within the CoServ system to hire legal and consulting services and to negotiate with the company and direct any necessary litigation; requiring reimbursement of cities’ rate case expenses; authorizing intervention in the proceeding at the Railroad Commission; requiring notice of this resolution to the company; and establishing an effective date. E. 2009-003 - An ordinance of the City of Denton, Texas approving and authorizing the City Manager to execute an Interlocal Ambulance Agreement between the City of Denton and Denton County for ambulance services; and declaring an effective date. F. 2009-004 - An ordinance of the City of Denton, Texas approving and authorizing the City Manager to execute an Interlocal Fire Protection Agreement between the City of Denton and Denton County for fire protection services; and declaring an effective date. G. 2009-005 - An ordinance of the City of Denton, Texas, authorizing the expenditure of funds to pay the Denton Central Appraisal District (DCAD) the City of Denton’s portion of the budget allocation in an amount not to exceed $359,551.59; and providing an effective date. City of Denton City Council Minutes January 6, 2009 Page 6 H. 2009-006 - An ordinance of the City of Denton authorizing an Agreement between the City of Denton, Texas and Opening Doors Immigration Services for provision of assistance to victims of domestic violence; providing for the expenditure of funds; and providing for an effective date. ($1500) st I. R2009-002 - A resolution supporting a legislative position during the 81 Texas Legislature on the discontinuation of diverting transportation user revenues to non-transportation uses and the appropriation of all revenue generated from highway user fees and taxes to fund transportation projects. The Mobility Committee recommended approval (3-0). J. 2009- 007 - An ordinance providing for in-house engineering review by City staff development review engineers for those development review tasks that were performed by the outside consulting firm Freese & Nichols, Inc.; and these tasks were then deleted from the new contract with Freese & Nichols, Inc. dated November 4, 2008; establishing engineering review fees that are payable by developers to the City of Denton for variances, alternative development plans, general development plans, planned development district detailed site plans, comprehensive plan amendments; building permit site plan review; clearing/grading permit review; engineering preliminary plat and final plat review for one and two lot residential subdivisions; providing for a repealer; providing for a severability clause; providing an effective date. K. 2009-008 - An ordinance authorizing the City Manager to execute Change Order Number Three to the contract between the City of Denton and JRJ Paving LP.; providing for the expenditure of funds therefor; and providing an effective date (Bid 3897–Shady Oaks and Brinker Paving and Drainage Improvements Change Order Number Three in the amount of $32,474.60 for additional repairs to Shady Oaks outside of the original contract including the installation of handrails over four box culverts and a decrease to reflect actual work performed versus original estimates for paving, curb/gutter and storm drains). . L. 2009-009 - An ordinance authorizing the City Manager to execute Change Order Number Four to the contract between the City of Denton and Ed Bell Construction; providing for the expenditure of funds therefor; and providing an effective date (Bid 3929–Western Blvd. Paving and Drainage Improvements Change Order Number Four in the amount of $89,895.60 60 to raise the level of Cindy Lane for drainage improvements and to reflect the actual work done versus original contract estimates for fencing and junction boxes). M. 2009-010 - An ordinance extending a contract awarded by Council on September 22, 2005 for one additional year by way of an Interlocal Cooperative Purchasing Program Participation Agreement with the Dallas Independent School District under Section 271.102 of the Local Government Code, for the purchase of products and services for an onsite vehicle parts facility; providing for the expenditure of funds therefor; and providing an effective date (File 3405– Interlocal Agreement for the Purchase of Products and Services for an Onsite Vehicle Parts Facility with the Dallas Independent School District, contract awarded to Genuine Parts Company in the estimated amount of $1,344,000). City of Denton City Council Minutes January 6, 2009 Page 7 N. 2009-011 - An ordinance accepting competitive bids and awarding a public works contract for the construction of curb, gutter, and driveway structures and radiuses on Headlee Street; providing for the expenditure of funds therefor; and providing an effective date (Bid 3516–awarded to the lowest responsible bidder meeting specification, Floyd Smith Concrete, Inc. in the amount of $217,060.34). O. 2009-012 - An ordinance of the City of Denton, Texas accepting competitive sealed proposals and awarding a best value contract for the renovation and expansion of the City of Denton Senior Center; authorizing the expenditure of funds therefor; and providing an effective date (RFSP 4206–Denton Senior Center Renovations and Addition awarded to H.C.I. General Contractors, Inc. in the amount of $1,184,300). P. 2009-013 - An ordinance of the City Council of the City of Denton, Texas, approving a grant application from Elk River Investments, Inc. from the Downtown Incentive Grant Program not to exceed $15,000; and providing for an effective date. The Economic Development Partnership Board recommended approval (4-0). Q. 2009-014 - An ordinance finding that a necessity exists to acquire street right-of- way and temporary construction, grading and access easements and authorizing the acquisition thereof through agreement or eminent domain on various hereinafter described parcels of real property for paving and drainage enhancements related to the “Westcourt Road Improvements Project”; providing a severability clause; providing an effective date. 4.PUBLIC HEARINGS A. The Council held a public hearing and considered adoption of an ordinance of the City of Denton, Texas, providing for an amendment to the Comprehensive Plan for the City of Denton, Texas, for approximately 4.23 acres of land, located on the northwest corner of Loop 288 and Sherman Drive, from an “Existing Land Use/Infill Compatibility” land use designation to a “Community Mixed Use Centers” land use designation; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, providing a severability clause; and providing an effective date. (CA08-0001) The Planning and Zoning Commission recommended approval (6-0). Mark Cunningham, Director of Planning and Development, presented information for both Items A and B. Item A was a request for a comprehensive plan amendment from existing land use/infill compatibility to community mixed use center. Item B was a request to rezone the property from Neighborhood Residential 4 to Community Mixed Use General. The applicant was requesting the same land use on his property as what was on the property across the street. The permitted uses for Mixed Use General versus Neighborhood Residential were noted as well as the development code comparison regulations for land use. Five notices were mailed with none returned. The recommendation was to approve both the comprehensive plan amendment as well as the rezoning request. The Mayor opened the public hearing. City of Denton City Council Minutes January 6, 2009 Page 8 Jeremy Sain, applicant, stated that he was available to answer questions from Council. The proposed comprehensive plan amendment and rezoning would complement the current non- residential uses in the area. The Mayor closed the public hearing. The following ordinance was considered: NO. 2009-015 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, PROVIDING FOR AN AMENDMENT TO THE COMPREHENSIVE PLAN FOR THE CITY OF DENTON, TEXAS, FOR APPROXIMATELY 4.23 ACRES OF LAND, LOCATED ON THE NORTHWEST CORNER OF LOOP 288 AND SHERMAN DRIVE, FROM AN “EXISTING LAND USE/INFILL COMPATIBILITY” LAND USE DESIGNATION TO A “COMMUNITY MIXED USE CENTERS” LAND USE DESIGNATION; PROVIDING FOR A PENALTY IN THE MAXIMUM AMOUNT OF $2,000.00 FOR VIOLATIONS THEREOF, PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. Kamp motioned, Thomson seconded to adopt the ordinance. On roll vote, Heggins “aye”, Kamp “aye”, Moreno “aye”, Mulroy “aye”, Thomson “aye”, and Mayor Burroughs “aye”. Motion carried unanimously. B. The Council held a public hearing and considered adoption of an ordinance providing for the rezoning of approximately 4.23 acres of land, located on the northwest corner of Loop 288 and Sherman Drive, from a Neighborhood Residential 4 (NR-4) zoning district classification and use designation to a Community Mixed Use General (CM-G) zoning district classification and use designation; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, providing a severability clause; and providing an effective date. (Z08- 0002) The Planning and Zoning Commission recommended approval (6-0). The Mayor opened the public hearing. No one spoke during the public hearing. The Mayor closed the public hearing. The following ordinance was considered: NO. 2009-016 AN ORDINANCE PROVIDING FOR THE REZONING OF APPROXIMATELY 4.23 ACRES OF LAND, LOCATED ON THE NORTHWEST CORNER OF LOOP 288 AND SHERMAN DRIVE, FROM A NEIGHBORHOOD RESIDENTIAL 4 (NR-4) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION TO A COMMUNITY MIXED USE GENERAL (CM-G) ZONING DISTRICT CLASSIFICATION AND USE DESIGNATION; PROVIDING FOR A PENALTY IN City of Denton City Council Minutes January 6, 2009 Page 9 THE MAXIMUM AMOUNT OF $2,000.00 FOR VIOLATIONS THEREOF, PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. Mulroy motioned, Heggins seconded to adopt the ordinance. On roll vote, Heggins “aye”, Kamp “aye”, Moreno “aye”, Mulroy “aye”, Thomson “aye”, and Mayor Burroughs “aye”. Motion carried unanimously. C. The Council held a public hearing and considered adoption of an ordinance amending Subchapters 3 and 16 of the Denton Development Code conforming procedures to statutory provisions relating to proportionality of development exactions; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, severability and an effective date. (DCA08-0011) The Planning and Zoning Commission recommended approval (6-0). Frank Payne, City Engineer, stated that the reason for the proposed amendments was to conform the current procedures for handling exaction appeals to the standards set forth in the Texas Local Government Code. The Denton Development Code set forth a variance process that provided an avenue of appeal to the Planning and Zoning Commission. Section 212.904 of the Local Government Code established the City Council as the appellate body for consideration of exaction appeals. It could be argued that the current Code could unintentionally deprive the applicant of the due process provided by State law. The proposed amendments were intended solely to remedy this potentially litigious situation, not to provide methods of calculation on rough proportionality. Rough proportionality was not intended to be a precise, mathematical determination. The proposed procedures for an exaction variance were reviewed. The procedural modifications would provide applicants with an exaction appeal process, consistent with the correct legal standard, and would help avoid confusion from the existing conflict. The Mayor opened the public hearing. No one spoke during the public hearing. The Mayor closed the public hearing. The following ordinance was considered: NO. 2009-017 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AMENDING SUBCHAPTERS 3 AND 16 OF THE DENTON DEVELOPMENT CODE, CONFORMING PROCEDURES TO STATUTORY PROVISIONS RELATING TO PROPORTIONALITY OF DEVELOPMENT EXACTIONS; PROVIDING FOR A PENALTY IN THE MAXIMUM AMOUNT OF $2,000.00 FOR VIOLATIONS THEREOF, SEVERABILITY AND AN EFFECTIVE DATE. (DCA08-0011) Kamp motioned, Mulroy seconded to adopt the ordinance. On roll vote, Heggins “aye”, Kamp “aye”, Moreno “aye”, Mulroy “aye”, Thomson “aye”, and Mayor Burroughs “aye”. Motion carried unanimously. City of Denton City Council Minutes January 6, 2009 Page 10 5.ITEMS FOR INDIVIDUAL CONSIDERATION A. The Council considered adoption of an ordinance of the City of Denton, Texas, on first reading, annexing by consent two tracts of land consisting of approximately 865.92 acres, contiguous and adjacent to the city of Denton, generally located in two distinct areas, the first area (annexation area #1) being approximately 24.94.23 acres in size and is generally located between the City’s current northern city limits and Lake Ray Roberts, south of FM 2153, and the second area (annexation area #2) is approximately 843.35 acres and is generally located east of FM 2164 and north of Shepard Road; approving a service plan for the annexed property; providing a severability clause and an effective date (A08-0001). The Planning and Zoning Commission recommended approval (5-0). Mark Cunningham, Director of Planning and Development, stated that this was the first reading of the annexation ordinance. Council had held two previous public hearings on this proposed annexation. The proposal was a voluntary annexation of approximately 865.92 acres in multiple ownerships and consisting of two separate and non-contiguous areas used for rural residential and agriculture. The future use of the property was a proposed master planned community. Staff found the request consistent with city’s annexation policy and recommended approval. Mayor Burroughs asked for a general time frame for providing public services. Cunningham indicated that it would be contingent on when the applicant submitted an official plan. The following ordinance was considered: FIRST READING AN ORDINANCE OF THE CITY OF DENTON, TEXAS, ON FIRST READING, ANNEXING BY CONSENT TWO TRACTS OF LAND CONSISTING OF APPROXIMATELY 865.92 ACRES, CONTIGUOUS AND ADJACENT TO THE CITY OF DENTON, GENERALLY LOCATED IN TWO DISTINCT AREAS, THE FIRST AREA (ANNEXATION AREA #1) BEING APPROXIMATELY 24.94.23 ACRES IN SIZE AND IS GENERALLY LOCATED BETWEEN THE CITY’S CURRENT NORTHERN CITY LIMITS AND LAKE RAY ROBERTS, SOUTH OF FM 2153, AND THE SECOND AREA (ANNEXATION AREA #2) IS APPROXIMATELY 843.35 ACRES AND IS GENERALLY LOCATED EAST OF FM 2164 AND NORTH OF SHEPARD ROAD; APPROVING A SERVICE PLAN FOR THE ANNEXED PROPERTY; PROVIDING A SEVERABILITY CLAUSE AND AN EFFECTIVE DATE (A08-0001). Heggins motioned, Kamp seconded to adopt the ordinance. On roll vote, Heggins “aye”, Kamp “aye”, Moreno “aye”, Mulroy “aye”, Thomson “aye”, and Mayor Burroughs “aye”. Motion carried unanimously. B. The Council considered adoption of an ordinance approving the termination of that certain lease of Airport Property between the City of Denton, Texas and Sykes-Vaughan Investments (US Aviation Group); authorizing the City Manager to execute a Fixed Base City of Denton City Council Minutes January 6, 2009 Page 11 Operator Airport Lease Agreement between the City of Denton, Texas, and US Aviation Group which includes among other provisions the right to sell aviation fuel to the public for a five- percent fuel flow fee, provide commercial hangar and tie-down service and the expansion of the US Aviation Group leasehold by approximately 168,000 square feet; and providing an effective date. Mark Nelson, Transportation Director, stated that US Aviation Group had requested a renegotiated lease that would allow for a longer term to the existing lease and allow their organization to expand the level of aviation services they provided to the public to include Fixed Base Operation services. The proposed lease rate was $0.17 per square foot per year for non- aircraft movement area parcels and $0.13 per square foot per year for aircraft apron areas. A 10% tie-down and hangar commission would be in effect the first year of the proposed seven year lease, would be adjusted to 11% in December 2009 and adjusted to 12% in December 2019. The lease provided for a fuel flow rate of 5% of wholesale cost of fuel until December 2009 and the opportunity to renegotiate the fuel flow fee in December 2019. The City would be required to participate in drainage improvements for the proposed apron expansions. Staff and the Airport Advisory Board were proposing that gas well royalties be utilized to enhance the drainage infrastructure immediately east and south of the existing south public apron to better facilitate the expansion of the south pubic apron by the tenant. The tenant would take over management of the south public apron and would assume pavement maintenance responsibility for the apron. Lease obligations would require the tenant to initiate construction on the FBO expansion within 9 months and complete the improvements within two years of the effective date of the proposed lease. The tenant would also be required to start apron expansion within two years of the effective date. Staff and the Airport Advisory Board recommended approval of the proposal. John Knight, Deputy City Attorney, stated that questions were asked during the Work Session about insurance and indemnification provisions. This was a layered approach. Indemnification was the way the city dealt with an applicant. If the tenant refused to deal with it, the general provisions were looked at. Failing that, the named insured would be used. The second issue dealt with termination of insurance language. He provided revised language for Council consideration. Council Member Mulroy stated he was cautious about the last sentence of the indemnification clause. He was not sure he could vote for the proposal as written. Knight stated that they had discussed the proposed language but had not talked about removing the indemnification clause or the last sentence. Mayor Burroughs suggested that a motion could be made with a condition to allow staff and the tenant to finalize the language. Council Member Mulroy requested a clarification on the fuel charges and the charge structure. Nelson stated that staff was recommending a 1% discounted rate on the established fuel flowage fee for the next ten years for the US Aviation Group. The current FOB, Business Air Center, had a flowage fee of 6% and would increase to 7% in 2009. The tenant was requesting a 5% rate for the duration of the 30 year lease. However, the staff was recommending the rate only for ten years. City of Denton City Council Minutes January 6, 2009 Page 12 Council Member Moreno asked if the improvements using the gas well funds would have to be done whether or not the lease was approved. Nelson replied that the improvements would eventually have to be done. Mayor Burroughs stated that he had a hesitation to reduce the usual and customary flowage fee. The proposal was a reduction in the rate to allow the applicant to recuperate the costs for the construction of the fuel farm. Nelson stated that it was recognition of costs for a fuel farm while the current FOB did not have those costs for a fuel farm as it was city owned. Mayor Burroughs felt that the tenant had asked the City to provide a mechanism to recoup funds and to allow them to compete at a lower rate than current competition. He felt that there should be a compelling public interest to subsidize the new tenant and what was the compelling public purpose? The first fuel farm had an environmental issue and no one wanted to build it so the City constructed it for a public purpose. Here there seemed to be no compelling reason. The request was for another FBO subsidized by the public in order to create competition. A compelling reason to subsidize the FBO would be if the current FBO was inadequate. Where was the compelling public need to provide tax payer underwriting for a retail establishment to complete with other retail establishment? Nelson stated that there had been requests by other tenants to seek competition and by working with this entity they would be able to recruit a different market and clientele than the current tenant could do. At the time the city elected to construct a fuel farm, there was another FBO with its own fuel farm at the airport that the tenant had built. The compelling factors were competition and the recognition that the proposed FBO would be required to construct a fuel farm while the exiting one did not. City Manager Campbell stated that the calculations indicated that based on the performed fuel sales, the tenant would not recover, at 5%, the full amount for the fuel farm in the 10 year period. John Knight stated that at this point, he could not give the Council precise language for the phrasing on the indemnification but he and the tenant agreed to rewrite the paragraph with the tenant assuming liability regardless of fault. Don Smith, 2107 Emerson, Denton, 76209, submitted a Speaker Card in support of the proposal. Mayor Burroughs stated that his main issue was whether the public needed to fund, over time, the creation of this FBO. He would have liked to see improvements to public property to be used by the public. Council Member Mulroy felt that it might be in the City’s best interest to have the fuel farm built with their money and let them recoup the costs over time. There would eventually be a need for a second location for a fuel farm on site. The City of Denton was the developer and owner of the Airport. As owner and developer, the city made a yearly general government contribution to make the airport self-sufficient. This would serve a public purpose for the development of the Airport. City of Denton City Council Minutes January 6, 2009 Page 13 Mayor Pro Tem Kamp stated that the Mobility Committee had already discussed this item. It had considered many questions regarding a public/private partnership and was in favor of the proposal. Jeff Soules, Managing Director of US Aviation Group, stated a second FBO would make the Airport more efficient as customers would not have to wait for fuel. Some customers felt that there was a monopoly at the Denton Airport and went to other airports for fuel. US Aviation was going to spend $1.8 million for improvements at the Airport plus provide increased national visibility and fuel branding. That provided increased job opportunities and competitive wages, gave customers a choice and provided competition at the airport. Mayor Burroughs asked if the ramp expansion would be a benefit the public. Nelson replied yes that it would be a privately developed public ramp. Mayor Burroughs asked why a portion of that cost was not proposed as an alternative similar to drainage as opposed to fuel flowage fee. Council Member Mulroy stated that US Aviation was asking for the same flowage rate as the current FBO as they would be building the tanks. Soules stated that they would be getting less because the rate would only be for 10 years. The following ordinance was considered: NO. 2009-018 AN ORDINANCE APPROVING THE TERMINATION OF THAT CERTAIN LEASE OF AIRPORT PROPERTY BETWEEN THE CITY OF DENTON, TEXAS AND SYKES-VAUGHAN INVESTMENTS (US AVIATION GROUP); AUTHORIZING THE CITY MANAGER TO EXECUTE A FIXED BASE OPERATOR AIRPORT LEASE AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS, AND US AVIATION GROUPWHICH INCLUDES AMONG OTHER PROVISIONS THE RIGHT TO SELL AVIATION FUEL TO THE PUBLIC FOR A FIVE-PERCENT FUEL FLOW FEE, PROVIDE COMMERCIAL HANGAR AND TIE-DOWN SERVICE AND THE EXPANSION OF THE US AVIATION GROUP LEASEHOLD BY APPROXIMATELY 168,000 SQUARE FEET; AND PROVIDING AN EFFECTIVE DATE. Mulroy motioned, Heggins seconded to approve the lease as discussed with the addition of the 12A language by Legal and with the additional clarification of the indemnification paragraph that would be incorporated between Legal and the applicant, as discussed. On roll vote, Heggins “aye”, Kamp “aye”, Moreno “aye”, Mulroy “aye”, Thomson “aye”, and Mayor Burroughs “nay”. Motion carried with a 5-1 vote. C. The Council considered adoption of an ordinance authorizing an agreement between the City of Denton and Aldi (Texas), L.LC. providing for reimbursement for the acquisition through purchase or condemnation of certain street right of way tracts and temporary City of Denton City Council Minutes January 6, 2009 Page 14 construction, grading and access easements located in the W. Neill Survey, Abstract No. 970 and the J. Hardin Survey, Abstract No. 1656, City of Denton, Denton County, Texas; and providing an effective date. (Westcourt Road Improvements) The following ordinance was considered: NO. 2009-019 AN ORDINANCE AUTHORIZING AN AGREEMENT BETWEEN THE CITY OF DENTON AND ALDI (TEXAS), L.LC. PROVIDING FOR REIMBURSEMENT FOR THE ACQUISITION THROUGH PURCHASE OR CONDEMNATION OF CERTAIN STREET RIGHT OF WAY TRACTS AND TEMPORARY CONSTRUCTION, GRADING AND ACCESS EASEMENTS LOCATED IN THE W. NEILL SURVEY, ABSTRACT NO. 970 AND THE J. HARDIN SURVEY, ABSTRACT NO. 1656, CITY OF DENTON, DENTON COUNTY, TEXAS; AND PROVIDING AN EFFECTIVE DATE. Kamp motioned, Mulroy seconded to adopt the ordinance. On roll vote, Heggins “aye”, Kamp “aye”, Moreno “aye”, Mulroy “aye”, Thomson “aye”, and Mayor Burroughs “aye”. Motion carried unanimously. D. The Council was to consider nominations/appointments to the City’s Boards and Commissions (Human Services Advisory Committee and Traffic Safety Commission). Mayor Burroughs stated that he did not have any nominations at this time. E. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting. No items were suggested at this meeting. F. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no continuation of Closed Meeting. G. Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no official action on Closed Meeting items. With no further business, the meeting was adjourned at 8:41 p.m. ________________________________ ______________________________ MARK A. BURROUGHS JENNIFER WALTERS MAYOR CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON, TEXAS