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August 2, 2010 MintuesCITY OF DENTON CITY COUNCIL MINUTES August 2, 2010 After determining that a quorum was present, the City Council convened in a Closed Session on Monday, August 2, 2010 at 11:30 a.m. in the Council Work Session Room, 215 E. McKinney Street, Denton, Texas. PRESENT: Council Member Watts, Council Member Heggins, Council Member Gregory, Council Member Engelbrecht, Mayor Pro Tem Kamp, Council Member King, and Mayor Burroughs. ABSENT: None 1. Closed Meeting: A. Consultation with Attorneys -Under Texas Government Code Section 551.071. 1. Consult with City's attorneys regarding: (1) legal issues associated with the regulation of gas well drilling and production within the City Limits and the extraterritorial jurisdiction, including Constitutional limitations, statutory limitations upon municipal regulatory authority and statutory preemption of municipal regulatory authority; (2) Federal preemption (and limitations on that preemption) of certain municipal regulations relating to the compression and transmission of natural gas, and the location of gas pipelines; (3) analysis of risks and enforceability of such regulations, including impacts and strategies associated with local permit protections; (4) legal limitations associated with the setting of fees for administration, inspection, enforcement, and other governmental or proprietary services related to gas well drilling and production, both within the City and its extraterritorial jurisdiction and; (5) legal issues relating to item No. 1 on the Work Session and item No. 1 on the Open Session. B. Deliberations regarding Certain Public Power Utilities: Competitive Matters -Under Texas Government Code Section 551.086. 1. Receive a report and presentation from Denton Municipal Electric staff regarding future strategic competitive and financial planning issues regarding the operations of Denton Municipal Electric and its involvement in the City's capital improvements plan; discuss, deliberate and provide staff with direction regarding such matters. 2. Receive a report and presentation from Denton Municipal Electric staff regarding future additional compliance and regulatory issues with the THE (Texas Regional Entity) and NERC (North American Electric Reliability Corporation) to begin in 2011, and the methods and practices necessary for meeting those requirements, together with strategic competitive and financial planning issues regarding the operations of Denton Municipal Electric; discuss, deliberate and provide staff with direction regarding such matters. City of Denton City Council Minutes August 2, 2010 Page 2 Mayor Pro Tem Kamp motioned, Council Member Watts seconded that Items B 1 and B2 were appropriate for discussion under the Public Power Exception of the Open Meeting Act. On roll call vote, Council Member King "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Burroughs "aye", Council Member Watts "aye", and Mayor Pro Tem Kamp "aye". Motion carried unanimously. Following the completion of the Closed Meeting, the Council convened in a Work Session at which the following items were considered: 1. Receive a report, hold a discussion and give staff direction regarding Ordinance 2010-181 and any other matter relating to gas well drilling and production in the ETJ and within the City limits of the City of Denton. City Attorney Burgess indicated that this item would be for discussion and direction with regard to the ordinance passed at the last council meeting. There was an accompanying action item later in the agenda with regard to fees assessed with the last ordinance. Staff listened to comments made in open session at the last meeting and in light of those comments, wanted to discuss with Council if there was anything in that ordinance it would like to consider. Staff was moving forward into Phase II but that did not curtail looking at items from the current ordinance. Mayor Burroughs stated when trying to get something done in a prompt time frame, he knew there might be occasions when an adjustment would have to be done. As Council deals with some of these issues, they were trying to address them as globally as possible. As the issues came forward and they identified issues, there might be a need to adjust what had been previously done. Council Member Gregory stated that Council had discussed as the process went to Phase 11 that they would continue to seek input as they had done for Phase I from representatives who understood the technicalities involved in the industry. He understood that citizens in the neighborhoods were also stakeholders and Council needed to hear from them also. He wanted Phase II to be a higher quality than Phase I. Mayor Burroughs asked staff to work in the general direction to have outreach to both industry and local citizens for input on the issues for Phase I and Phase 11. Council Member Watts stated that some common thoughts he heard at the last council meetings were regarding the language on grandfathering and how it could be tightened regarding multi- well sites. He questioned how the new ordinance would apply to that and if it might help stop the proliferation of wells over a large parcel of land. He felt that issue needed to be addressed before starting Phase II as it would help both the industry and neighborhoods. Council Member Gregory asked why staff recommended the adjustment to the fees and to temporarily set aside inspection fees for wells in the ETJ. City Attorney Burgess stated that quite a few comments had been received from the industry regarding the assessment of these fees. Their recommendation to council was to have the interim ordinance not assess fees at this time which would allow additional time to ensure that the fee City of Denton City Council Minutes August 2, 2010 Page 3 assessment was consistent with the powers the city had with the ETJ. This was a cutting edge area and it was in the best interest of the city to be careful on how it proceeded. The City needed to be fair and equitable in this matter. Council Member Gregory stated that the City still had regulatory jurisdiction over some actions and behaviors of gas well drilling in the ETJ. City Attorney Burgess stated that was correct and was the law. It was the extent of the authority they needed to look at and assess the fees accordingly. Council Member Gregory stated that the City wanted to be sure it was not overcharging the industry for a service but wanted to be certain the fee covered the cost. Mayor Burroughs requested staff return this item to council as soon as possible after the evaluation of the ETJ cost of service 2. Receive a report, hold a discussion and give staff direction regarding approval of Clear Creek Natural Heritage Center Long Range Plan. Catherine Barnett-White, Utility Project Coordinator, presented an update on the Center. The current lecture series included "Bat World" with over 300 participants. The Master Naturalists were still very involved with continuing projects and volunteer opportunities. She reviewed the information regarding the hunting area at the Center and the long range plan for the Center. Council Member Heggins asked how the hunting program at the Center was advertised. White stated that it wasn't formally advertized; that the hunters knew of it through word of mouth. Council Member King left the meeting. Council Member Gregory stated that signs were also posted in the area informing people that a permit was needed to hunt in the area and how to get the permit. He asked about the long range plan in terms of funding for the Center that was in the last CIP. He questioned how much funding was there and what was it for. White stated that there was approximately $600,000 approved in the CIP. $100,000 had been used for the Center building and the rest was held to be used as matching funds for Texas Parks and Wildlife applications. Council Member Gregory asked for a rough estimate on how the money might be spent. White stated that if they partnered with Texas Parks and Wildlife, they would be limited on what the money could be used for. They were currently revisiting that philosophy. There might be other opportunities to move money around for use in different projects. She felt that by 2015 the first phase of the advanced center should be open. City of Denton City Council Minutes August 2, 2010 Page 4 Mayor Pro Tem Kamp stated that the Committee on the Environment had talked about projects to do jointly with the DISD at the facility and felt that it might be a good topic of discussion at a future joint meeting with the DISD. Following the completion of the Work Session, the City Council convened in Open Session to consider the following: Ordinance No. 2010-183 1. Consider adoption of an ordinance setting Planning and Development fees relating to gas well drilling and production in the City of Denton and its ETJ; repealing Section 4 of Ordinance 2010-181; and setting an effective date. City Attorney Burgess stated that this item was discussed in the Work Session. The proposed ordinance would not assess fees during the course of the interim ordinance and would have an effective date the same as the effective date of the other ordinance. Mayor Pro Tem Kamp motioned, Council Member Engelbrecht seconded to adopt the ordinance as written. On roll call vote, Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Burroughs "aye", Council Member Watts "aye", and Mayor Pro Tem Kamp "aye". Motion carried unanimously. With no further business, the meeting was adjourned at 2:35 p.m. MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS