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March 10, 2009 Minutes CITY OF DENTON CITY COUNCIL MINUTES March 10, 2009 After determining in Open Session that a quorum was present, the City Council convened in a Closed Session on Tuesday, March 10, 2009 at 3:00 p.m. in the City Council Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items were considered: PRESENT: Mayor Burroughs; Mayor Pro Tem Kamp; Council Members Heggins, Moreno, Mulroy, Thomson and Watts. ABSENT: None 1. Closed Session A.Deliberations regarding Personnel Matters – Under Texas Government Code Section 551.074. 1.Deliberated and discussed the evaluation, duties, discipline, procedures, and contracts of the Municipal Court Judge, City Attorney, City Auditor, and City Manager. B.Consultation with Attorney – Under Texas Government Code Section 551.071, Deliberations regarding Economic Development Negotiations – Under Texas Government Code Section 551.087. 1.Received a report and held a discussion regarding legal issues on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional conduct of the State Bar of Texas clearly conflicts with the provisions of the Texas Open Meetings Act, Chapter 551 of the Texas Government Code. Also hold a discussion regarding granting economic development incentives to Allegiance Hillview Development, LP with respect to development at Rayzor Ranch. This discussion shall include commercial or financial information the City Council has received from Allegiance Hillview Development, LP which the City Council seeks to have locate, stay, or expand in or near the territory of the city, and with which the city council is conducting economic development negotiations; including the offer of financial or other incentives. C. Consultation with Attorneys – Under Texas Government Code, Section 551.071. 1. Consulted with City’s attorneys on legal issues, including potential settlement, of litigation styled Collegiate Community Outreach d/b/a UNT Chi Alpha, et al. v. City of Denton, et al., Cause No. 4:07cv564, currently pending in the US District court, Eastern District, Sherman Division. 2. Consulted with City’s attorneys and held a discussion limited to legal issues potentially or consequentially associated with implementation and pursuit of the City of Denton Growth Management Study. Council Member Heggins left the meeting during the discussion of C. 1. City of Denton City Council Minutes March 10, 2009 Page 2 nd Following the completion of the Closed Session, the Council convened in a 2 Tuesday Session at 6:16 p.m. to consider the following: 1. The Council received a report, held a discussion and gave staff direction regarding the City of Denton Growth Management Study. Mark Cunningham, Director of Planning and Development, presented information on the growth management study. Background Information- In 1999 when the Denton Plan was adopted, the city’s land area was 39,695 acres. To accommodate future population and development growth, the Denton Plan anticipated annexation of approximately 27, 100 acres of land within the city ETJ. This was based on population projections and an average density of 2,250 people per square mile. Per the Denton Plan, the total anticipated land area required to accommodate future population and development was 66,795 acres which was 9,661 acres below that which was anticipated. Element Two of the City’s growth management strategies specified an aggressive annexation plan in order to manage the density and quality of growth within the current ETJ and maintain the City’s existing certificate of convenience and necessity. State Statutes – Section 43.052 established the elements of a required annexation plan but did not apply to an area proposed for annexation if the area contained fewer than 100 separate tracts of land on which one or more residential dwellings were located on each tract. Section 43.055 allowed a municipality to annex up to 10% of the incorporated area as of January 1 of the current calendar year, plus any unused acreages carried over from the previous year’s allocation. Involuntary annexation could not exceed 30% of the incorporated area as of January 1 of the current year. Based on this formula, the city could involuntarily annex approximately 16,917 acres. Planning Rationale – Goals for this area included: protect the north Interstate 35 corridor, protect future “west Loop 288” corridor, manage growth in the city’s CCN, manage land uses, create a logical and contiguous city boundary and provide future growth areas as recommended in the Denton Plan. Project Methodology - Factors in determining potential areas for annexation included physical features (creeks, railroads, roadways, etc.); property configuration boundaries; proximity to current city boundaries; ability to serve (fire, police EMS, DME, etc.); and all areas within the city’s CCN. Factors in determining potential areas for expansion included extent of recent development activity; number of residentially developed parcels; and limited number of gas wells. Analysis- Guided by the Denton Plan, Texas Local Government Code, and the previously mentioned goals and factors, Freese and Nichols studied 15 areas encompassing over 48,000 acres and identified potential annexation areas. Five of the potential annexation areas were located in the northwestern quadrant of the City. Also identified as potential annexation areas were 16 unincorporated pockets located within the current city limits; three of those had more than 100 lots and might require an annexation plan; 3 other unincorporated pockets were encumbered with restrictive covenants. The total acreage of potential annexation area was 12,342 acres with the maximum the city could annex at 16,917 acres. City of Denton City Council Minutes March 10, 2009 Page 3 Annexation Options – Options included proceed with the annexation process for all of the identified areas, proceed with the annexation process for only some of the identified areas; or do not proceed with annexation of any of the identified areas. Consensus of the Council was to not consider the three areas with restrictive covenants. In absence of any other reason, proceed with the other five major areas, bringing back specifics for pocket areas. The UNT parcels should also be included in the analysis. 2. The Council received a report, held a discussion, and gave staff direction regarding development and submission of grant applications by the City of Denton for funding under the American Recovery and Reinvestment Act. Barbara Ross, Community Development Coordinator, provided a general overview of the method used to develop grant applications and research and reviewed the grants available under the Act. A committee of staff members from various departments was formed to participate in the study. Information received from Barbara McCall, the City’s lobbyist in Washington, was used in determination of the projects. The Committee was also working on the budgetary implication of the grants for the future plus the availability of matching funds. The proposed ordinance Council would consider later in the meeting would allow staff to submit grant applications and allow the City Manager to sign any funding agreements that might be received. Mayor Burroughs stated that if a matching fund situation might be a problem staff should provide that information to Council before dismissing a project due to a matching fund situation. Mayor Burroughs asked about the weatherization of homes. Ross stated that the State grant went out to various agencies. Some of the formulas for funding would go to the State and a city would have to make application to the State for those funds. This might delay the receipt of funds as the State would have to develop application standards before applications could be made. 3 The Council received a report, held a discussion, and gave staff direction regarding a proposed strategy for Utilities Customer Service. Bryan Langley, Director of Finance, presented information on this issue. Overview and Purpose - Review key aspects of the customer service organization, consider key elements of the Navigant recommendations for customer service; describe key objectives and elements of proposed customer service strategy; provide overview of payment types accepted by the city; and discuss next steps and city council direction Overview – the FY 2008-09 Customer Service budget was $4,013,361 and included 42 full time equivalents. Staff was organized into teams consisting of the call center; cash, billing and administration. Navigant characterized customer service as high cost with high service. Costs have risen 35% over the last five years and 145% during the last eight years. Factors contributing to the rising costs included growth of the community; department specialization leading to increases in staffing needs; underdeveloped self service tools, continued growth in walk-in customers. The City of Denton City Council Minutes March 10, 2009 Page 4 majority of customers were paying by check with walk-in payments the most expensive payment option. There was a low adoption rate of the direct debit program. Areas of opportunity – currently were not using call/walk-in arrival patterns to guide staffing decisions; a quality evaluation system was not currently in place; a great deal of specialization impacted cross training of staff; staffing was spread thinly across many duties; attrition and absenteeism would have a profound impact on the department as it was currently structured, and a high percentage of walk-in payments led to higher costs and increased staff. Solutions currently being pursued included developing daily volume, efficiency and staffing reports utilizing those reports to guide staffing decisions; create employee scorecards to encourage accountability for personnel and department performance; efficiency, quality and empowerment were key performance indicators; creating a quality observation program to encourage first call/contact resolution, and cross training employees to reduce specialization. Navigant study recommendations – (1) empower customer service employees so they can enter information as they handle calls or process in-person transaction; (2) revamp the IVR and telephone systems to improve the call flow, better integrate account information and encourage self-service; (3) simplify the application process for new customers; (4) identify and handle customer accounts based on credit/collection risk; (5) refine payment options and channels; (6) set up a performance measurement and benchmarking program to routinely measure and communicate performance; (7) change bad debt write-off procedures and (8) define and deploy a customer service strategy and communicate this effectively throughout the organization and to customers. Customer Service Strategy Objectives – develop and implement a strategy to guide future decision making which would enhance the experience for customers, provide customers with more options to pay their bill and obtain information regarding their account, attempt to improve efficiency and effectiveness of Customer Service operations, and limit or reduce cost increases in the future. Key Elements of Strategy – Key elements included reduce staffing specialization and improve cross training; staff each area to “average arrival” call and walk up patterns, better develop automated payment options, limit or reduce number of full-service payment locations, recognize good customers and prioritize their calls. Payment acceptance - In June 2006, the Council eliminated face-to-face credit card transactions to reduce costs. Credit card payments could still be accepted on the internet/kiosk if the customer paid a convenience fee. Over time, business needs had necessitated variances to this policy and had led to inconsistent payment acceptance practices throughout the city. Staff would like to standardize payment acceptance for all departments except utilities customer service. Also revise the process that would provide better customer service with back office procedures simplified to improve efficiency. A recommendation would be to accept cash and face-to-face credit cards at all city locations; the Internet payments would not require convenience fee with the program phased in over time. Next steps - staff was currently evaluating a number of issues including improvements to various automated payment options; potential outsourcing of bill printing and mailing, revising deposit, credit and collections procedures. Future programs would be implemented according to the strategy recommended by the PUB and Council. City of Denton City Council Minutes March 10, 2009 Page 5 nd Following the completion of the 2 Tuesday Session, the Council convened in Open Session to consider the following: 1. The Council considered adoption of an ordinance of the City of Denton, Texas, authorizing the City Manager to make application to any State or Federal entity administering funding allocated under the American Recovery and Reinvestment Act of 2009 that is deemed appropriate to support projects within the City, and to allow the City Manager to take all other actions necessary to obtain grants under the Act. The following ordinance was considered: NO. 2009-063 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY MANAGER TO MAKE APPLICATION TO ANY STATE OR FEDERAL ENTITY ADMINISTERING FUNDING ALLOCATED UNDER THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 THAT IS DEEMED APPROPRIATE TO SUPPORT PROJECTS WITHIN THE CITY, AND TO ALLOW THE CITY MANAGER TO TAKE ALL OTHER ACTIONS NECESSARY TO OBTAIN GRANTS UNDER THE ACT. Mulroy motioned, Kamp seconded to adopt the ordinance. On roll vote, Kamp “aye”, Moreno “aye”, Mulroy “aye”, Thomson “aye”, Watts “aye”, and Mayor Burroughs “aye”. Motion carried unanimously. 2. The Council considered adoption of an ordinance approving the adoption of an amended Chapter 380 Agreement with Allegiance Hillview, LP; and providing an effective date. Linda Ratliff, Director of Economic Development, stated that the proposed ordinance would amend the current agreement due to the current economic situation. The amendment would divide the agreement into phases. Phase I represented the property north of Highway 380 and Phase II represented the property south of Highway 380. The revised agreement would limit the amount of incentive to $20 million in Phase I and $42 million in Phase II. The total incentive reimbursement of $62 million remained the same as originally granted. It also required a minimum of $20 million in infrastructure expenditures for Phase I and a minimum of $42 million for phase II; provided a 15-year term for Phase I and a 20-year term for Phase II. The term for the original agreement was 20 years. Other requirements included a minimum of 400,000 square feet of retail for Phase I and 600,000 square feet for Phase II, and grant payments were still based on a percentage of the sale tax generated by the project, excluding any anchor or junior anchor stores that might leave the Golden Triangle Mall to locate at Rayzor Ranch. Ratliff stated that a question had been asked at an earlier meeting regarding the letter of credit and cost of the total project versus the letter of credit. She indicated that any reduction of the balance of the letter of credit would have to have authorization of the City and could not be reduced less than the amount of the road. City of Denton City Council Minutes March 10, 2009 Page 6 The following ordinance was considered: 2009-064 AN ORDINANCE APPROVING THE ADOPTION OF AN AMENDED CHAPTER 380 AGREEMENT WITH ALLEGIANCE HILLVIEW, LP; AND PROVIDING AN EFFECTIVE DATE. Mulroy motioned, Thomson seconded with the amended language as suggested by the City Attorney and Mayor. On roll vote, Kamp “aye”, Moreno “aye”, Mulroy “aye”, Thomson “aye”, Watts “aye”, and Mayor Burroughs “aye”.Motion carried unanimously. 3. The Council clitigation styled onsidered adoption of an ordinance authorizing settlement of Collegiate Community Outreach d/b/a UNT Chi Alpha, et al. v. City of Denton, et al., Cause No. 4:07cv564, currently pending in the US District Court, Eastern District, Sherman Division, under terms previously discussed in closed session, and further authorizing the City Manager to approve a compromise settlement agreement, and such other documents recommended by the City’s attorneys as necessary or appropriate to effectuate such terms of settlement. City Attorney Burgess suggested that this item be tabled until the next Council meeting. Kamp motioned, Mulroy seconded to table the ordinance to the next regular council meeting. On roll vote, Kamp “aye”, Moreno “aye”, Mulroy “aye”, Thomson “aye”, Watts “aye”, and Mayor Burroughs “aye”. Motion carried unanimously. With no further business, the meeting was adjourned at 7:30 p.m. ____________________________________ MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS ____________________________________ JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS