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June 15, 2010 MinutesCITY OF DENTON CITY COUNCIL MINUTES June 15, 2010 After determining that a quorum was present, the City Council convened in a Work Session on Tuesday, June 15, 2010 at 2:30 p.m. in the Council Work Session Room at City Hall. PRESENT: Mayor Burroughs, Mayor Pro Tem Kamp, Council Member Engelbrecht, Council Member Gregory, Council Member Heggins, Council Member King, and Council Member Watts. ABSENT: None 1. Requests for clarification of agenda items listed on the agenda for June 15, 2010. Council Member Watts requested that Consent Agenda Item 3E dealing with the economic development grant be pulled for individual consideration. On Consent Agenda Item 3V, the Walker contract, he asked how involved the firm was with the mediation all of the activities with the negotiations and asked for a justification for the additional fees. City Attorney Burgess stated that the TMPA litigation involved resolving multi-year and multi- case matters with all four member cities and TMPA. The additional fees of $25,000 was for consummating the dismissal all of the cases. Council Member Watts asked if it started with the bond validation suit. City Attorney Burgess replied that suite and the Travis County suit. The PUC issues also required dismissal. There were almost 20 pieces of litigation to settle. Council Member Gregory questioned Consent Agenda Items O, P and Q in terms of one provision in the contract dealing with the current lease holder wanting to release the lease and release it to a new holder. Part of the contract indicated that the original leaseholder would be responsible if the new lease individual backed out of the contract. He requested looking at whether other airports had that same provision to determine if that provision might put Denton in a business disadvantage when leasing. Council Member Gregory asked about Consent Agenda Item 3R and the alternate member to the Board of Directors to DCTA. If Rick Woolfolk was designated as the first alternate, who would be the second alternate. City Manager Campbell stated that if Council felt it was appropriate, either Howard Martin or Mark Nelson could be designated as the second alternate. The ordinance for consideration at this meeting was only for the first alternate. Mayor Burroughs suggested that the wording for the airport leases might be changed so that after a reasonable period of time for the standard form lease assignment the original lease individual would be released. Mayor Burroughs asked about Consent Agenda Item 3S and whether it was projected to receive input from commercial enterprises outside city limits. The wording of the caption indicated "regional". City of Denton City Council Minutes June 15, 2010 Page 2 Howard Martin, Assistant City Manager, stated that the grant was looking at local businesses that provided that resource to use for a pilot project. Mayor Burroughs asked if it would go beyond the city limits to acquire materials. Martin replied not for the initial project. 2. Receive a report, hold a discussion, and give staff direction regarding the 2010-11 Proposed Budget, Capital Improvement Program, and Five-Year Financial Forecast. Bryan Langley, Director of Finance, presented a preliminary FY 2010-11 budget overview. Overview and Purpose - included (1) review of the adopted FY 2009-10 long term financial plan, (2) discuss possible changes to assumptions for long-term financial forecast, (3) review preliminary FY 2010-11 five year financial forecast, (4) discuss strategies to resolve budget issues, (5) preliminary GO debt service fund forecast, (6) preliminary Utility Fund budgets and other key information and (7) next steps. FY 2009-10 Long Term Plan - Langley reviewed a summary of adopted assumptions in terms of appraised value growth, sales tax growth, compensation, health insurance, tax rate/$100, and future bond sales. The adopted 2009-10 General Fund long term plan was reviewed in terms of beginning fund balance, revenues, tax increase, expenditures, new expenses, additional reductions, ending fund balance and effective fund balance percentage. Potential Changes to Assumptions - Areas included fund balance, sales tax, appraised value, other revenues/cost issues, preliminary FY 2010-11 General Fund five year forecast and other considerations Fund Balance Reserves - the beginning level was approximately $948K more than previously forecasted in the FY 2009-10 budget. It was expected to remain above the target level over the short term. The Audit/Finance Committee previously established a target reserve level as a percentage of budgeted expenditures. A 12-15% range was established. The goal was 15%, but the range was provided to allow for flexibility with economic cycles. Bond rating agencies recently indicated that a reserve level below 15% was low compared to similarly rated entities. As a result, staff recommended that no budget be adopted that contemplates a fund balance level below the 15-20% of budgeted expenditures for a single year only. The long term plan should also indicate fund balance levels above this threshold, but the emphasis would be on the current year. Council Member Watts asked if staff had any recent conversations with bond rating agencies that would indicate if the City was not able to maintain that level, would there be a risk of a reduction in rating. Langley stated that there might be a risk but he couldn't say for sure. He continued with information on changes in monthly sales tax from FY 2008-09 and FY 2009-10. The revised estimate for FY 2009-10 was $19,443 million which was $2.0 million below budget. The April numbers were up about 6%. City of Denton City Council Minutes June 15, 2010 Page 3 Sales Tax - Langley continued the sale tax information with figures from 1998 to present. A 5% decrease for this budget year was projected. Appraised Values - using average experience as a guide, 2010 appraised values were expected to fall 4%. Using 2007 experience, a 5.2% decline was estimated with a 6% decline forecasted for financial planning purposes. This decline severely affected the long term plan and the GO debt service fund as well. Preliminary Appraisal District information indicated that most properties would not increase in value in Denton County. Commercial properties were expected to decline by 20-30%, multi-family properties were expected to decline by 10%, and residential properties were expected to decline by 34%. Future appraised value growth estimates should also be revised due to moderate recovery estimates. Appraised value history since 1998 to present was discussed. Tax Rate Information - The Texas Property Tax Code mandated the calculation and publication of an effective tax rate. The effective tax rate for FY 2009-10 was almost 5 cents more than the adopted tax rate. In other words, the FY 2009-10 tax rate represented a tax decrease compared to FY 2008-09. Other FY 2009-10 revenue items - fine/fee revenue was expected to be $1.2 million below budget. Investment income was expected to be approximately $425,000 below budget. Franchise fees and Return on Investment also were expected to be lower than previous estimates due to reduced Utility Fund revenue. Preliminary FY 2010-11 General Fund long term plan - included a 2.5 cent tax increase in FY 2010-11 and a 1 cent tax increase in FY 2014-15. Council Member Watts asked about the gas well revenue transfer from the airport fund. Langley stated that Council had agreed to transfer $974,000 into the General Fund which was included in the figures. Council had also talked about an annual transfer of about $500,000 was excluded from the expenditures. Council Member Watts stated that the transfers from the airport gas well fund were not factored into the projections for the out years. Langley stated correct, that it was a one-time honor. Other considerations - the long term financial plan did not address the lack of funding for infrastructure. Approximately $16 million of additional funding was needed annually for street maintenance. An estimated $7-10 million in drainage improvements (at a minimum) was needed over the next five years. The financial plan currently underestimated the actual costs of achieving strategic goals. A long term strategy was needed to eliminate annual deficits and provide additional resources. The 2008 citizen survey indicated 65% of residents rated street maintenance as fair or poor and 38% of respondents indicated that they would like additional street maintenance funding. The strategic plan needed to focus around this issue. City of Denton City Council Minutes June 15, 2010 Page 4 Management Plans Underway - FY 2009-10 cost reductions included a hiring/reclassification freeze, a suspension of non-essential travel/training, the elimination of the transfer to the non- airport gas well fund and the implementation of some Efficiency Team recommendations before the end of the fiscal year. Due to revenue declines, the fund balance decline was still anticipated to approach $4.5 million by year end. Due to the composition of expenditures, significant reductions could not be made without affecting personnel and/or service delivery. Efficiency improvements and minor adjustments to spending would not be sufficient to correct the structural funding imbalance in the General Fund. Program level funding reductions and/or eliminations would need to be made even with a tax increase. Since revenues were expected to be at prior year levels, management would need to consider reducing service to prior year levels as well. Items Under Consideration - (1) increase user fees to fully recover cost of service, (2) transfer Keep Denton Beautiful program from the General Fund to the Solid Waste Fund which would require an additional rate increase for solid waste customers, (3) transfer savings associated with CO bond issuance from utility funds to the General Fund, (4) consider overtime reduction strategies in all General Fund departments including public safety operations, and (5) delay the Public Safety Training Facility. Council Member Watts felt that relabeling solid waste revenue from rate to pay for service for Keep Denton Beautiful was not really a cost reduction but more of a transfer. Council Member Gregory felt that the same people who pay for solid waste would also pay more taxes in ad valorem taxes and would be getting hit with both increases. He was not sure that the timing would be right to move KDB from the General Fund to solid waste. He asked when would be the next scheduled rate increase for DME. City Manager Campbell stated that was a range of options that included reductions in some programs and level of service. Council Member Gregory suggested keeping a final tab on how the changes were going to affect citizens. Mayor Burroughs asked for an estimate on how much the change in Keep Denton Beautiful would be for solid waste customers. Langley indicated that it would be about 15 cents per month. Howard Martin, Assistant City Manager, stated that the total increase would be closer to a 15 cent charge on the refuse side and a 15 cent charge on the recycling side. No electric increase was anticipated until 2013. Langley continued with Items Under Consideration - (6) substantial reductions to travel and training budget, (7) eliminating council contingency funds, (8) re-evaluate planned compensation increase, (9) create an Airport Enterprise Fund and establish ROI, franchise fees, and indirect cost transfer to the General Fund, (10) transfer the cost of some positions to the CIP budget, (11) eliminate the downtown incentive grant, (12) delay increasing the over 65 property tax exemption to $35,000, (13) increase the non-residential library fees, (14) reduction of the City of Denton City Council Minutes June 15, 2010 Page 5 Chamber of Commerce contribution, (15) consider higher reimbursement/reallocation of positions for School resource Officers, (16) transfer available fund balance Internal Service funds and Non-airport Gas Well funds into the General Fund which would be a one-time revenue source, (17) explore the feasibility of paying for the Urban Forester out of the Tree Mitigation Fund, (18) reconsider the supplemental package requests from the General Fund departments, (19) reduction of programs, services, and personnel to offset projected gap between revenues and expenditures, and (20) the 2.5 cent tax rate increase proposed for FY 2010-11 would likely be at or below the effective tax rate so staff may recommend a tax rate increase equivalent to the effective rate which might be greater than the 2.5 cent increase previously discussed. Council Member Watts asked what, if any, of the airport expenses could be picked up by the airport gas well fund. Mayor Burroughs asked if these suggestions had a goal for awareness to the Council or when would staff expect push back on some of the items. Langley replied that if some of the items were definitely off the table staff needed to know that as soon as possible. Mayor Burroughs felt a discussion on small items should center the fact that they might not have a large impact on the budget but could have an impact on service and the perception of service. There needed to be consideration on how they would be perceived by the public. Large items would not be a problem. He was a defender of the council contingency funds in the manner in which they were used for various programs for the city. Council Member Heggins expressed a major concern about the over 65 property tax exemption. She understood it was a large item for the city but it was also a large item for the seniors. She did not like the idea of cutting that and citizens were expecting the city to keep on schedule. Council Member King asked for more information on the Downtown Incentive Grant. Mayor Burroughs asked if the School Resource Officers revolved among the schools. Roy Minter, Police Chief, stated that there were seven School Resource Officers who did not rotate schools. They remained in their main school in order to build rapport in the schools. If funding was reallocated, the officers might have to rotate. Council Member Gregory stated that if the costs were transferred to the DISD, it would help the city's budget but would also affect the DISD. He asked if there had been any discussion of eliminating the officers. Minter stated that it had not been discussed. Council Member Gregory asked about the cost of each officer. Minter stated that the total cost of the program was $750,000. Mayor Pro Tem Kamp asked what the reimbursement from the DISD was for that $750,000. City of Denton City Council Minutes June 15, 2010 Page 6 Minter stated that the DISD reimbursed the City for 50% of one position. Council Member Engelbrecht asked how that compared to other cities with resource officers. Minter stated that most other cities charged their ISD 50% of costs. Denton was one of the few cities that picked up most of the costs for the officers. Mayor Burroughs asked for the amount of Internal Service Funds. Langley stated they were still working on the figures. Council Member Watts requested a water park subsidy discussion and if there were any options to help reduce the costs such as someone else owning the park and the city lease it. Council Member Gregory stated that the water park had been paying its own way and the city subsidized some of the costs for the natatorium. Langley stated that the city was subsidizing $400,000 per year. Council Member Watts requested a break out of the natatorium and the water park. Council Member Engelbrecht requested staff take similar park operations and provide the cost to the city for those such as the softball fields at North Lakes Park to show what was the true cost for maintenance as opposed to the revenue received. Council Member Gregory suggested looking at a reduction in programs by 10% and what that would save in costs. Council Initiatives (not included in previously discussed forecast) - included the impact of the Downtown Implementation Plan, the new animal shelter facility, a new convention center and hotel facility, the update of the Denton Comprehensive Plan, bicycle master plan update and implementation, the update of the Mobility Plan, and transportation initiatives such as regional toll revenue matching funds, annual street maintenance costs, anti-idling ordinance. Council Member Gregory thought that funds had already been found and completed with the Downtown Implementation Plan. Langley stated that funds would have to be found for certain improvements such as landscaping and drainage. Council Member Gregory stated that implementation of the bike master plan and CIP plan would be different. He asked what the estimate would be for the updating of the Denton Comprehensive Plan. Langley stated that it was approximately $800,000 dollars and that it could not be done internally. City of Denton City Council Minutes June 15, 2010 Page 7 Council Member Gregory asked if there was a way to review the plan instead of a complete update to get at the Council goal and not cost that kind of money. City Manager Campbell stated that it might be a possibility and that staff could look at those types of options. GO Debt Service Fund -no tax rate increase was proposed for the GO Debt Service Fund. Staff had considered shifting a portion of the tax rate to the General Fund but it did not appear feasible at this time. Appraisal growth assumptions mirrored those in the General Fund. Staff was recommending issuing $4.1 million GO (remaining from the 2005 bond election) and $2.9 million CO bonds which was on tonight's agenda. Future issuances would depend on appraised value growth. Staff was recommending putting the Public Safety Training Facility on indefinite hold until funding could be obtained. The future size and timing of the next GO bond election would also be dependent on economic factors. Other Key Information - possible service enhancements included (1) considering absorbing the credit care convenience fee, (2) an audio camera system, (3) Profitstars Remit Plus software, and (4) CIS maintenance. Including the above enhancements, the proposed FY 2010-11 expenditures were roughly equal to the FY 2009-10 budget. Possible service reductions included reducing the hours of operation during the week and close on Saturdays. Council Member Gregory asked what was the most cost efficient method to pay a utility bill. Langley stated it was an automatic draft. Mayor Burroughs stated that he received complaints from people paying a small bill amount and then having to also pay the credit card fee. He suggested a percent rather than set fee. Langley replied that option would be explored if the convenience fee were kept. Utility Funds - the Public Utilities Board was still reviewing the financial plans for all of the utility funds. All funds assumed an average 2% increase in compensation for employees. Each utility fund was experiencing revenue decline due to slower growth. Expenditure reductions had occurred in each utility fund to partially offset revenue declines. The emphasis was to maintain the service delivery level. Langley reviewed the electric fund figures, water fund, wastewater fund, and solid waste fund. Council Member Gregory stated again that he would like to look at all numbers for utility increases. Health insurance fund - it was expected that employee insurance premiums would be increased by an average of approximately 8%. The change in employee costs would range from $28 to $32 per month with additional employee rate increases likely in future years. Increases in co-pay amounts, for urgent care and ER visits as well as a change in the prescription formulary was contemplated. The rate stricture would be aligned with the cost to the plan. Mayor Burroughs suggested discussing the aggregate of all of the costs perhaps with a single carrier quote. City of Denton City Council Minutes June 15, 2010 Page 8 Summary - Langley reviewed the summary of revised assumptions in terms of appraised value growth, sales tax growth, compensation, health insurance and tax rate/$100. He also presented the schedule of next steps in the budget process. 3. Receive a report, hold a discussion, and give staff direction concerning: (1) proposed amendments to Subchapter 23 - Definitions - of the Denton Development Code (DDC); (2) proposed amendments to Subchapter 22 of the Denton Development Code (DDC) regarding gas well drilling and production; (3) proposed amendment to Subchapter 16 of the DDC regarding gas well development platting; (4) proposed amendments to the schedule of fees contained in Ordinance 2005-237 pertaining to gas well drilling and production within the City limits and the Extra-Territorial Jurisdiction; and (5) hold a discussion, and give staff direction concerning the types of analytical testing that has been conducted at other gas well monitoring efforts within the Barnett Shale. (Gas Well Ordinance) Mark Cunningham, Director of Planning and Development, stated that at the December 1, 2009 council meeting, staff presented findings from research and analysis of gas well drilling and production ordinances from seven neighboring cities. Council directed staff to conduct further research and analysis of various questions that were raised during the presentation. During the April 20, 2010 Council Work Session staff presented the results of the additional research and analysis requested by Council. Included in the discussion was the composition of the Fort Worth Gas Well Drilling Review Committee, examples of decibels for day to day activity, gas well conditions from prior approvals, zoning district requirements for gas wells, air quality tests, environmental policies, definitions, setbacks and legal challenges, noise regulations, height of storage tanks, requirement for environmental insurance, limitations on flaring activities, Texas Railroad Commission requirements and general chemicals used in drilling operations. Council directed staff to move forward with amending the city's gas well ordinance, and to consider appropriate increase of relevant fees. Council also directed staff to provide information concerning the types of analytical testing that had been conducted at other gas well monitoring efforts within the Barnett Shale and to determine whether there were any testing requirements within other Metroplex ordinances concerning soil testing and ground water testing. Following that meeting staff met and discussed the process and strategy by which the city's current gas well ordinance could be amended. It was determined that due to the magnitude and complexity of the topic, it would be best to approach the task in two phases. Phase II would include a comprehensive rewrite of the entire gas well ordinance and would require consulting with various gas well experts in terms of planning and legal issues, gas well operational issues and environmental issues. Phase I would deal with a gas well fee schedule, noise mitigation, separation distance, screening requirements, definitions, gas well development plan and gas well permits. Gas well fees - the current fees were established in 2005 and did not cover the cost of service. Denton's gas well fees were the lowest of the 8 cities surveyed. It was suggested to implement a fee increase and add new fees to support salary and benefits for new gas well personnel. The proposed personnel would consist of a gas well administrator, two gas well inspectors and an office assistant. Gas well fees comparisons were presented in terms of gas well plat, gas well inspections, gas well plat amendment, gas well plat extension, transfer of operation, annual City of Denton City Council Minutes June 15, 2010 Page 9 administrative and inspection, fracture/drill pond, pipeline permit, compressor facility permit, watershed protection permit, sign installation and appeal fee. Cunningham also presented the staff recommended fees. He indicated that with the annual fees, the city could legally go back and assess an annual inspection fee on existing wells. City Attorney Burgess indicated that the annual fee would apply across the board according to the triggering event. The effective date could be the key trigger for assessment of fees. Cunningham indicated that the fees would be for cost of service. A full cost of service analysis would be presented at the Council's July 20th meeting. Financial impact - staff would provide expenditures and revenue figures on July 20th. Recommended definitions - of the seventeen recommended definitions, two dealt with protected uses and residence which were relative to setbacks. Council Member Gregory indicated that he saw in other city ordinances, the term dwelling. He questioned if drilling could take place close to an office building as it was not listed as a dwelling. Cunningham replied yes that could happen. Council Member Gregory asked if there was a different reference indicating the limit on how close to an office or office building the site could be located. Cunningham stated that it would be found in the gas well minimum separation requirements. He reviewed the recommended setback requirements in terms of protected uses and all other use or features. A setback waiver/variance provision indicated that the minimum separation requirement could be reduced by the granting of a variance by the Zoning Board of Adjustment or if all of the property owners of the affected uses within the reduced separation area agreed to the reduction with a notarized waiver and the waiver was attached to the permit application. Council Member Watts asked about the recommended setback of 1,000 feet from any lot within a previously platted residential subdivision. He questioned if there were no plats of residential lots in a previously platted subdivision, would the 1000 feet apply because there were no platted lots. City Manager Campbell stated that previously the setback was from the time the permit was issued. Council Member Watts stated if there was a large residential subdivision that was platted and had one house on the fringe, the restricted 1000 feet would be from the whole platted subdivision. He questioned the one house provision and the significance of one stricture. Cunningham stated the current language in the Denton Comprehensive Code indicated the deciding factor was who came to the table first. The one house was there because the residential subdivision was there first so the gas well had to respect the subdivision. City of Denton City Council Minutes June 15, 2010 Page 10 Council Member Watts stated he was not comfortable with the language. He understood the intent but not the rationale. Council Member King stated that the one house kept the city or community from changing the zoning if there already was a house on it. The gas well company would have to preplan to protect the property owners. Mayor Burroughs asked if a small development had one house, there could be no drilling within 1000 feet because of that far lot. Cunningham stated that drilling could not be done straight out. It would require a variance or waiver from the Zoning Board of Adjustment. Mayor Burroughs stated that they were not regulating the wells. They were regulating emissions, drainage, noise but not the placement of the wells. Council Member Gregory stated that he wanted to protect a person already in a house from a well being drilled too close. If the well was already there, then the individual had the right to live next to the well. Cunningham reviewed the setback waiver/variance procedure. Due to time constraints, this item was continued after the regular meeting. 4. Receive a report, hold a discussion, and give staff direction concerning a resolution of the City Council of the City of Denton, Texas supporting "extended producer responsibility" to promote the shift of disposal costs from local governments to producers of items through state legislation; authorizing its execution by the City Manager; and providing an effective date. This item was not considered. 5. Receive a report, hold a discussion and give staff direction regarding nominations/appointments to the City's Boards and Commissions. This item was considered after the regular meeting. Council convened into the Closed Meeting at 5:50 p.m. 1. Closed Meeting: A. Deliberations regarding consultation with the City Attorney - Under Texas Government Code Section 551.071, Deliberations regarding Economic Development Negotiations - Under Texas Government Code Section 551.087. 1. Receive a report and hold a discussion regarding legal issues on matters in which the duty of the attorney to the governmental body under the Texas City of Denton City Council Minutes June 15, 2010 Page 11 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 for a 400,000 square foot distribution center project to be located in the Airport Industrial Area on Airport Road. This discussion shall include commercial or financial information the City Council has received from company 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. This item was not considered. B. Certain Public Power Utilities: Competitive Matters - Under Texas Government Code, Section 551.086. 1. Receive information and a presentation from Denton Municipal Electric staff regarding a public power utility competitive and financial matter, dealing with terms regarding a possible extension of the term and other provisions of the Power Purchase Agreement, entered into on May 1, 2009 by and between the City and NextEra Energy Power Marketing for the acquisition by the City of wind energy and renewable energy credits; discuss, deliberate, consider, and provide staff with direction regarding same. Council Member Gregory motioned, Mayor Pro Tem Kamp seconded that this item was appropriate for Council to discuss in Closed Session under the Public Power Utilities competitive Matters exception. 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. Council Member Watts motioned, Council Member Gregory seconded to adopt Ordinance 2010- 164 extending the contract with NextEra Energy Power Marketing. 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. C. Deliberations regarding Real Property - Under Texas Government Code Section 551.072; Consultation with Attorneys - Under Texas Government Code Section 551.071. 1. Discuss, deliberate, and receive information from Staff and provide Staff with direction pertaining to the acquisition or the condemnation of fee simple tracts for Eagle Drive Drainage Improvements - Phase I, the limits of which being along the existing branch between South Elm Street and South Locust Street, south of Maple Street, in the City of Denton, Denton County, City of Denton City Council Minutes June 15, 2010 Page 12 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 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. D. Consultation with Attorney -Under Texas Government Code Section 551.071. 1. Receive a briefing and status report from the City's attorneys regarding the litigation entitled The University of North Texas, Appellant v. City of Denton, Texas, Appellee, now pending in the Court of Appeals Second Judicial District, sitting in Fort Worth, Texas, Cause No. 02-09-00395-CV. Discuss, deliberate and provide the attorneys with direction. 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. 2. Consider and discuss the status of legal issues relating to the settlement of City of Denton v. Biodiesel Industries, Inc., et al., Cause No. 4:08-cv-00173 and provide direction to the city's attorneys regarding same. 3. Receive a briefing from the City's attorneys regarding legal issues related to parking and speed matters on City streets running through or adjacent to the University of North Texas and Texas Woman's University. Discuss, deliberate and provide attorneys with direction. A public discussion of these matters would clearly conflict with the duty of the City's attorneys to the governmental body under Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. Council convened in a regular session in the City Council Chambers at 6:40 p.m. 1. PLEDGE OF ALLEGIANCE 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. Recreation and Parks Month Mayor Burroughs presented the proclamation to Emerson Vorel, Director of Parks and Recreation, for Recreation and Parks month. City of Denton City Council Minutes June 15, 2010 Page 13 2. Denton Recycles in the Library Day Mayor Burroughs presented the proclamation to Shirlene Sitton and Lindsey Preston for Denton Recycles in the Library Day. 3. Drinking Water Week Awards Kara Robinson, Public Communications Office, presented the awards to the DISD students. 4. Fred Douglass/Fred Moore Days Mayor Burroughs presented the proclamation to Ruby Cole and family. 3. CONSENT AGENDA Mayor Burroughs stated that Item 3E would be considered separately. Bob Clifton presented Speaker Cards for Items 'A, 31C, 'IF, 'IT, and 3U. Council Member Gregory motioned, Mayor Pro Tem Kamp seconded to approve the Consent Agenda and accompanying ordinances and resolutions with the exception of Item 3E. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. Ordinance No. 2010-138 A. Consider adoption of an ordinance authorizing the City Manager to execute an Interlocal Cooperative Purchasing Program Agreement with Greenville Electric Utility System (GEUS) under Section 271.102 of the Local Government Code, to authorize participation in various GEUS contracts for the purchase of various goods and services; authorizing the expenditure of funds therefor; and declaring an effective date (File 4508-Interlocal Agreement with GEUS). Ordinance No. 2010-139 B. Consider adoption of an ordinance accepting competitive bids and awarding a Public Works Contract for the rehabilitation of the Pecan Creek Water Reclamation Plant Raw Pump Station 42; providing for the expenditure of funds therefor; and providing an effective date (Bid 4500-Raw Pump Station 42 MCC Rehabilitation awarded to the lowest responsible bidder meeting specification, C&G Electric, Inc. in the amount of $199,700). The Public Utilities Board recommends approval (5-0). Ordinance No. 2010-140 C. Consider adoption of an ordinance authorizing the City Manager to execute Change Order Number One to the contract between the City of Denton and Corbet Group, Inc.; providing for the expenditure of funds therefor; and providing an effective date (Bid 4444-Downtown City of Denton City Council Minutes June 15, 2010 Page 14 Denton Transit Center Change Order Number One in the amount of $151,254.86 for a total contract award of $1,887,254.86). Ordinance No. 2010-141 D. Consider adoption of an ordinance of the City of Denton, Texas, approving the 2011 Budget of the Denton Central Appraisal District, and providing an effective date. Ordinance No. 2010-142 E. Consider adoption of an ordinance approving a Chapter 380 Economic Development Grant Agreement with Allegiance Hillview, LP; and providing an effective date. Linda Ratliff, Director of Economic Development, stated that the Council had approved a Chapter 380 Program Grant Agreement with Allegiance Hillview on May 15, 2007. The Agreement provided a reimbursement to Allegiance for public infrastructure costs, including the cost to widen Highway 380 from Bonnie Brae to I-35. Allegiance would receive a portion of the sales tax generated by the project to recoup those expenditures. The grant would be equal to 50% of the total sales tax for three years and 333% for seventeen years. A maximum of $62 million was allowed. Under the original agreement, the developer was required to complete 400,000 square feet of retail on the north side of Highway 380 and 600,000 square feet on the south side of Highway 380 before they could receive reimbursement for eligible costs. Council approved an amendment to the original agreement in March 2009 due to the poor state of the retail economy. The amendment separated the development into two phases with the square footage for the north and south sides remaining the same. The incentive of a maximum of $62 million was split as well with $20 million allowed for Phase I and $42 million for Phase IL The years and percentages also changed. Since it appeared that the Phase I maximum of $20 million could be reached in 15 years, the number of years for that phase was decreased to 15. Phase 11 remained at 20 years. The percentages were increased to begin at 60% and then decreasing in subsequent years to 50% and 33%. Since the first amendment, Allegiance Hillview had partnered with RED Development to begin constricting Phase IL Their plan began with approximately 800,000 square feet of retail/commercial space for Phase 11 which included the Town Center project. Total retail/commercial build-out for Phase 11 was approximately 1.2 million square feet. RED Development believed that they had more accurate projections of sales tax revenues and had requested a second amendment to the Chapter 380 agreement. The proposed second amendment would still have the project in phases and the maximum reimbursement would still be at $62 million. Phase I would revert back to 20 years as in the original agreement with sales tax reimbursements that exceeded $20 million being applied to Phase II during the 20-year term, provided that all Phase II thresholds were met by 2015 and incentive payments for Phase II had not been initiated. The agreement provided for a 50% share in the city's sales tax revenue generated by the project for a period of 20 years for each phase, eliminating the need for dollar thresholds as in the Second Amendment. In the First Amendment, the developers were required to spend a minimum of $20 million in infrastructure costs for Phase I and a minimum of $42 million for Phase IL The Second Amendment no longer would require the developer to spend these minimum amounts per phase. Instead, it limited the reimbursement to the actual amount of eligible costs, not to exceed a total of $62 million so that the developer would not be penalized for coming in under budget. City of Denton City Council Minutes June 15, 2010 Page 15 Council Member Gregory questioned what the $62 million represented. Ratliff stated that originally the request was for over $90 million for roads, water, sewer, drainage, public improvements, but not for parks. The agreement was for only public improvements and only for a portion of that. Council Member Gregory asked if the development was built out to the specifications as per the agreement and sales tax was slow and stayed slow for a long time, if at end of 20 years what would happen. Ratliff stated that agreement would end and whatever they had received would be all they would get. Mayor Pro Tem Kamp stated that the $62 million generated would be from sales tax and not from any other source. Ratliff stated that was correct and also excluded anchors or junior anchors that might move from the Golden Triangle Mall. Council Member Watts questioned that now that Highway 380 was almost done along with the major infrastructure, how the costs would be monitored on what was paid and the process to verify that. Ratliff stated that they were in the process of reviewing the first round of submissions and under each category there was an itemized statement of what was spent. The engineers were reviewing the actual invoices and payments to make sure they were what they said they were. This process would continue as the project moved along. Council Member Gregory asked if the Wal-Mart on Loop 288 would be closed. Ratliff stated that there had not been any talk about closing the Loop 288 store. It was one of the best producing stores in the area. Mayor Pro Tem Kamp motioned, Council Member Watts seconded adopt the ordinance. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. Ordinance No. 2010-143 F. Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager or his designee to execute an agreement by and between North Central Texas Council of Governments ("NCTCOG") and the City of Denton, Texas, regarding the grant allocated to Denton under the North Central Texas Alternative Fuel and Advanced Technology Investments Act as part of the American Recovery and Reinvestment Act for those projects identified for funding under the Conservation Research and Development, as filed with the United States Department of Energy in the maximum amount of $725,514; providing for the expenditure of funds and an effective date. City of Denton City Council Minutes June 15, 2010 Page 16 Resolution No. R2010-017 G. Consider approval of a resolution of the City Council of the City of Denton, Texas supporting "extended producer responsibility" to promote the shift of disposal costs from local governments to producers of items through State legislation; authorizing its execution by the City Manager; and providing an effective date. Resolution No. R2010-018 H. Consider approval of a resolution nominating a member to the Board of Managers of the Denco Area 9-1-1 District; and declaring an effective date. Ordinance No. 2010-144 L Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and the Denton Animal Shelter Foundation for supplemental funding for advertising, printing and supplies; providing for the expenditure of funds; and providing for an effective date. ($1,050) Ordinance No. 2010-145 J. Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and the Juneteenth Committee for supplemental funding for Juneteenth; providing for the expenditure of funds; and providing for an effective date. ($750) Ordinance No. 2010-145 K. Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and Hearts for Homes; providing for the expenditure of funds; and providing for an effective date. ($600) Approved the Exception listed below. L. Consider a request for an exception to the Noise Ordinance for the purpose of performing live jazz music at the Sweet Y Cafe, located at 511 Robertson Street, on Friday and Saturday, June 18 and 19, 2010, beginning at 7:30 p.m. and concluding at 11:30 p.m. This request is for an extension of hours after 10:00 p.m. for amplified sound. The amplified sound will remain at the allowable 65 decibels. Staff recommends approval of the request of extending the hours of operation for amplified sound to 11:30 p.m. Ordinance No. 2010-147 M. Consider adoption of an ordinance of the City of Denton authorizing and ratifying an agreement between the City of Denton, Texas and the Dog Days of Denton for supplemental funding for the Dog Days Denton Event on June 4, 2010; providing for the expenditure of funds; and providing for an effective date. ($450) Approved the minutes listed below. City of Denton City Council Minutes June 15, 2010 Page 17 N. Consider approval of the minutes of: April 13, 2010; April 20, 2010; May 3, 2010; May 4, 2010; May 11, 2010; and May 18, 2010. Ordinance No. 2010-148 0. Consider adoption of an ordinance approving an assignment of a leasehold interest in an airport lease agreement at Denton Municipal Airport from Michael Moore, to Tony A. Riley located at 4710 Lockheed, Denton, Texas at the Denton Municipal Airport and providing an effective date. The Airport Advisory Board recommends approval (7-0). Ordinance No. 2010-149 P. Consider adoption of an ordinance approving an assignment of a leasehold interest in an airport lease agreement at Denton Municipal Airport from Avionics International Supply, Inc. to Andy Johnson located at 1750 Westcourt, Denton, Texas at the Denton Municipal Airport and providing an effective date. The Airport Advisory Board recommends approval (7-0). Ordinance No. 2010-150 Q. Consider adoption of an ordinance approving an assignment of a leasehold interest in an airport lease agreement at Denton Municipal Airport from Andy Johnson to Global Maritime Supply Management, LLC located at 1750 Westcourt, Denton, Texas at the Denton Municipal Airport and providing an effective date. The Airport Advisory Board recommends approval (7-0). Resolution No. R2010-019 R. Consider approval of a resolution by the City Council of the City of Denton, Texas, appointing an alternate to the Board of Directors of the Denton County Transportation Authority; providing a repealer and providing; and providing an effective date. Resolution No. R2010-020 S. Consider approval of a resolution of the City Council of the City of Denton, Texas authorizing the filing of a project application with the North Central Texas Council of Governments for a Regional Solid Waste Program - Local Implementation Project, Food Waste Composting; delegating and authorizing George C. Campbell, City Manager, or his designate, to act on behalf of the city in all other matters that are related to this project application, pledging that if funding for this project is received, the City of Denton, Texas will comply with all project requirements of the North Central Texas Council of Governments, the Texas Commission on Environmental Quality, and the State of Texas, and providing for an effective date. The Public Utilities Board will consider this item on June 14, 2010. Ordinance No. 2010-151 T. Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager or his designee to execute a Real Estate Contract of Sale between the City of Denton and Odis J. Fuller, Jr. and wife, Kathy A. Fuller and other documents necessary to acquire two tracts, one being approximately 0377 acre of land, the other being approximately 0.049 acre of land, both located in the William Loving Survey, Abstract City of Denton City Council Minutes June 15, 2010 Page 18 Number 759, City and County of Denton, Texas; authorizing the expenditure of funds therefore; and providing an effective date. The Public Utilities Board will consider this item on June 14, 2010. Ordinance No. 2010-152 U. Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager or his designee to execute a Release and Settlement Agreement and a Temporary Lease Agreement between the City of Denton and Denton Bible Church regarding two acquisition tracts, one being approximately 0377 acre of land, the other being approximately 0.049 acre of land, both located in the William Loving Survey, Abstract Number 759, City and County of Denton, Texas; authorizing the expenditure of funds therefore; and providing an effective date. The Public Utilities Board will consider this item on June 14, 2010. Ordinance No. 2010-153 V. Consider adoption of an ordinance of the City Council of the City of Denton, Texas authorizing the City Manager to execute a fourth amendment to agreement for professional legal services with the law firm of Walker Sewell, LLC for professional legal services relating to litigation styled: Ex Parte Texas Municipal Power Agency, Cause No. D-1-GN- 08-003426, pending in the 126th Judicial District Court in and for Travis County, Texas; Ex Parte Texas Municipal Power Agency - II, Cause No. D-1-GN-08-3693, pending in the 261st Judicial District Court in and for Travis County; and the litigation styled Texas Municipal Power Agency, Plaintiff vs. City of Bryan, Texas, Defendant, counter-plaintiff and third-party plaintiff, vs. City of Denton, Texas and the City of Garland, Texas, third- party defendants, Cause No. 28169, pending in the 506th Judicial District Court in and for Grimes County, Texas; together with sixteen related public utility commission of Texas regulatory proceedings; providing for retroactive approval; authorizing the expenditure of funds therefor; and providing an effective date. The Public Utilities Board recommends approval (5-0). Ordinance No. 2010-154 W. Consider adoption of an ordinance authorizing an encroachment agreement between the City of Denton, as grantor and HTA-Denton, LLC., a Delaware limited liability company, as grantee, regarding a 7.3 square foot tract of land that encroaches into a 20 foot Public Utility and Sidewalk easement; said Public Utility and Sidewalk Easement being dedicated as a part of the Rehab Hospital Addition, recorded in Cabinet X, pages 929 and 930, Plat Records, Denton County, Texas and being in the E. Puchalski Survey, Abstract No. 996, City of Denton, Denton County, Texas; providing an effective date. The Public Utilities Board will consider this item on June 14, 2010. Ordinance No. 2010-155 X. Consider adoption of an ordinance approving an Underground Pipeline Easement between the City of Denton, Texas, as grantor and EnCana Oil & Gas (USA) Inc., a Delaware Corporation, as grantee, regarding a 0.04 acre tract of land located in Lot 1, Block 1 of the Robson Ranch Water Reclamation Plant Addition, recorded in Cabinet R, page 365, Plat Records, Denton County, Texas and being in the T & P.R.R Survey, Abstract No. 1301, in the City of Denton, Denton County, Texas; and providing an effective date. The Public Utilities Board will consider this item on June 14, 2010. City of Denton City Council Minutes June 15, 2010 Page 19 Approved the appointment listed below. Y. Consider the appointment of Dr. Lane Rawlins to the City's Economic Development Partnership Board. Ordinance No. 2010-156 Z. Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute a purchase order through the Buy Board Cooperative Purchasing Network for the acquisition of residential refuse and recycling carts by way of an interlocal agreement with the City of Denton; and providing an effective date (File 4526-Residential Refuse and Recycling Carts for the Solid Waste Division awarded to Rehrig Pacific Company in the amount of $115,456) This item will be considered by the Public Utilities Board at its meeting on June 14, 2010. Council considered Items 5A, 5B and 5C under Items for Individual Consideration. 5. ITEMS FOR INDIVIDUAL CONSIDERATION Ordinance No. 2010-161 A. Consider adoption of an ordinance considering all matters incident and related to the issuance, sale and delivery of up to $64,000,000 in principal amount of "City of Denton Certificates of Obligation, Series 2010"; authorizing the issuance of the certificates; approving and authorizing instruments and procedures relating to said certificates; and enacting other provisions relating to the subject. Bryan Langley, Director of Finance, presented background information for Items 5A, 5B and 5C. Staff discussed these items with the Audit/Finance Committee which recommended approval. The Notice of Intent for Item 5A had been issued in accordance with state law. The certificates would provide funding of $63,110,000 for project costs for General Government, Solid Waste projects and Utility System Debt for electric, water and wastewater projects. The General Obligation funded projects in Item 5B represented the projects approved by the voters in the 2005 bond election. In order to accommodate project scheduling, staff was only recommending the issuance of $4,115,000. The remaining projects would be budgeted in the FY 2010-11 CIP. If approved by Council, the bonds would be sold through a competitive bid process. The refunding of existing debt for Item 5C was previously discussed with the Audit/Finance Committee and the City Council. However, due to current market situations, the refunding issuance was no longer economically feasible. Staff was seeking approval of a six month parameters ordinance that would enable staff to sell refunding bonds when, and if, market conditions changed. Since bond market conditions could change rapidly, staff was requesting the authority to execute the refunding issuance at any time before December 15, 2101. Greg Shaker, Bond Counsel, was here for legal questions as well as David Medanich from First Southwest Company. City of Denton City Council Minutes June 15, 2010 Page 20 David Medanich, First Southwest, presented a booklet of information regarding the bond sale. The Certificates of Obligation had received 11 bids and the General Obligation bonds had received six bids. He provided historical bond sale information for the City of Denton. It was recommended that the city award the Certificates of Obligation to the Banc of American Merrill Lynch and the General Obligation bonds to Wells Fargo Advisors. Mayor Burroughs asked for an estimate of savings doing this issuance. Langley stated that it would be about $1 million over the life of the bonds. Council Member Gregory asked for more details with Item 5C giving the City Manager the right to sign off on bonds due to economic conditions. Langley stated that the ordinance would give authority for the City Manager to move forward with the bonds as conditions changed hourly and had certain parameters that had to be followed. Council Member Watts asked if conditions allowed the City Manager to do this, what would be the estimated savings. Langley replied about $6.5 million over the life of the debt. Bob Clifton presented Speaker Cards for Items 5A, B and C. Council Member Gregory motioned, Council Member Watts seconded to adopt the ordinance for 5A. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. Ordinance No. 2010-162 B. Consider adoption of an ordinance considering all matters incident and related to the issuance, sale and delivery of up to $4,115,000 in principal amount of "City of Denton General Obligation Bonds, Series 2010"; authorizing the issuance of the bonds; approving and authorizing instruments and procedures relating to said bonds; and enacting other provisions relating to the subject. Mayor Pro Tem Kamp motioned, Council Member Heggins seconded to adopt the ordinance. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. Ordinance No. 2010-163 C. Consider adoption of an ordinance considering all matters incident and related to the issuance, sale and delivery of up to $50,000,000 in principal amount of "City of Denton General Obligation Refunding Bonds, Series 2010A"; establishing parameters for the redemption of certain outstanding obligations of the City; authorizing the issuance of the bonds; approving and authorizing instruments and procedures relating to said bonds; and City of Denton City Council Minutes June 15, 2010 Page 21 enacting other provisions relating to the subject. Council Member Engelbrecht motioned, Council Member King seconded to adopt the ordinance. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. The Council returned to the regular agenda order. 4. PUBLIC HEARINGS A. Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, providing for a Specific Use Permit to allow a drive-thru facility associated with a proposed bank on property within a Neighborhood Residential Mixed Use (NRMU) zoning district. The 0.949 acre site is located approximately 250 feet west of the intersection of Teasley Lane (F.M. 2181) and Lillian Miller Parkway; and providing for a penalty in the maximum amount of $2,000.00 for violations thereof, severability and an effective date (510-0001). The Planning and Zoning Commission recommends approval of this request (6-0). Mark Cunningham, Director of Planning and Development, presented the details of the proposal. He stated that First State Bank had requested a specific use permit to allow a bank with a drive- through facility. The Planning and Zoning Commission recommended approval as did the Development Review Committee. The conditions suggested by the Planning and Zoning Commission included the specific use permit would only be for the proposed four-lane drive- through with one pass-through lane in association with the bank facility and the proposed bank facility drive-through would be limited to the hours of operation from 8:00 am to 6:00 pm Monday- Friday and 8:00-12 noon on Saturdays. Council Member Engelbrecht asked about the reason for the opposition from the DATCU. Cunningham stated that the concern was that there would be too many drive through facilities using one ingress and egress. The CVS Pharmacy had a drive through as did the DATCU and one more would be too many. Council Member Engelbrecht asked if turns could be made out the drive in both directions or only a right turn. Cunningham stated that there was a median there so only a right in- right out would be allowed. Council Member Engelbrecht asked about the exit out of the CVS north lot which allowed for a left turn. Cunningham stated that there were two exits - one allowed for a right only turn and the second had a break in the median to turn west. City of Denton City Council Minutes June 15, 2010 Page 22 Council Member Engelbrecht felt that there was not a good traffic flow operation in the way the plan was laid out. He felt there was a limitation on the way traffic could move about. Council Member Gregory stated that both driveways from CVS and the one from the proposed bank would stay there with the bank going in. Cunningham replied correct that would be the exit to the far west. Mayor Pro Tem Kamp asked if the main entrance to the bank was one way or two way. Cunningham stated that it was two way with any customer going through those areas. The Mayor opened the public hearing. The following individuals spoke during the public hearing: Bob Clifton, 1800 Morse, Denton, 76205 - opposed Marty Rivers, applicant - favor A Comment Card was submitted by Alex Payne in support. Council Member Watts asked Mr. Rivers about the hours of operation. Rivers replied that the hours would be acceptable for now but he would rather not have the restriction. Currently the drive through did not open until school had already started. Mayor Pro Tem Kamp asked about the bank's recourse if the ordinance were passed with the restrictive hours. City Attorney Burgess indicated that in order to change the hours, the bank would have to apply for a new specific use permit and associated public hearing. That restriction could be eliminated if Council desired. The Mayor closed the public hearing. Council Member King motioned to adopt the ordinance with both conditions from the Planning and Zoning Commission. Council Member Heggins seconded. Council Member Watts suggested a friendly amendment to the motion to remove the hours of operation for the drive through. Council Members King and Heggins accepted the friendly amendment. Council Member King motioned, Council Member Heggins seconded to adopt the ordinance with the removal of the restriction on the hours of operation of the drive through. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. City of Denton City Council Minutes June 15, 2010 Page 23 B. Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, providing for a zoning change from a Neighborhood Residential 3 (NR-3) zoning district classification and use designation to a Neighborhood Residential Mixed Use (NRMU) zoning district classification and use designation on tracts 256, 257, 258, 260 and 261 of the E. Puchalski survey, with an overlay district on those same tracts, plus tract 263, containing additional restrictions as noted; the area for the zoning change encompasses approximately 4.678 acres of land located at the northeast corner of North Bonnie Brae Street and West Oak Street, in the City of Denton, Denton County, Texas. The Planning and Zoning Commission recommended approval of the rezoning of six (6) of the seven lots from Neighborhood Residential 3 (NR-4) to Neighborhood Residential Mixed Use (NRMU) subject to overlay conditions, as provided in Exhibit 8 (5-1). A SUPERMAJORITY VOTE BY COUNCIL IS REQUIRED FOR APPROVAL. Mark Cunningham, Director of Planning and Development, presented the details of the proposal which consisted of rezoning for medical offices with a restrictive overlay. The property was comprised of seven separate tracts of land and adjoined the current West Oak Historic District. One lot on the street was not included in the proposal. There were many different uses within a 1/4 mile radius of the site which was currently zoned NR-3 with various other zoning categories around the proposal. The restrictive overlay district would not allow attached single-family dwellings, dwellings above businesses, hotels, semi-public halls, clubs and lodges, veterinarian clinics and bakeries and business and trade schools. Building height would be limited to 40 feet and no new strictures would be allowed at 2286 West Oak, however, the existing swimming pool, gazebo and guest house could be removed or repaired for the same function. Commercial and retail strictures, with the exception of professional services and office buildings, would be limited to 7,500 square feet with a specific use permit required for additional square footage. An eight foot high solid screen fence (good side out) constricted with steel posts and a decorative cap would be required in the buffer yard, in lieu of the required buffer shrubs. Non-single family access would be from Bonnie Brae or Oak Street and not from Houston Place. Staff was recommending that the 2286 West Oak lot not be included in the rezoning because it was adjacent to the West Oak Historic District and would provide a buffer between the commercial development and the West Oak District. Seven notices in opposition were received which triggered the supermajority vote by Council. The Development Review Committee originally recommended denial, but would recommend approval of the rezoning excluding that one property mentioned. The Planning and Zoning Commission recommended denial as proposed by the applicant but approval of the 6 of 7 properties with overlay restrictions. Council Member Gregory stated that he was troubled with spot zoning surrounding one private residence that was NR3 with NRMU. He noticed that the owner of that property did not submit a reply to the public hearing notice. He was uncomfortable surrounding one residential lot with NRMU. Council Member Engelbrecht asked what would prevent further commercial creep to the east. City of Denton City Council Minutes June 15, 2010 Page 24 Cunningham stated that the West Oak Historic District was adjacent to the site and planners were working with the community to develop a neighborhood plan for that area. Developing a neighborhood plan was more difficult to do with the historic district in place. Council Member Engelbrecht asked what would be a vision for the property on a city level with the rest of the single-family lots rather than piece meal development in the area. Cunningham stated that there was a medical facility in the area, a park, and churches and that there was a need to look at the area and create a neighborhood plan to provide for the protection of the single-family homes and allow for infill which would not offend the historical designation in the area. Council Member Watts felt that some of the uses left in the NRMU category seemed inconsistent with medical uses/office uses. He felt that some uses were inconsistent with the intent of the application. The Mayor opened the public hearing The following individuals spoke during the public hearing: Larry Reichhart, representing the applicant - in favor and was in agreement with the removal of the one lot from the application. Mayor Pro Tem Kamp asked about the buffer on the north and west near Houston Place. Reichhart stated that there would be the required 15' buffer plus the 8' fence. Council Member Gregory asked about making the fence a six foot solid masonry rather than a wood fence. Richhart stated that the good side of the wood fence would be towards the neighbors. He did not have any cost figures on a masonry fence and didn't know if it would be a deal killer. Pete Hulstrand, 320 Bonnie Brae, Denton, 76201 - favor Eugene Hargove, 2025 Houston Place, Denton, 76201 - opposed Bob Clifton, 1800 Morse, Denton, 76205 - opposed Alex Payne, 923 Ridgecrest Circle, Denton, 76205 - favor David Kaplan, 308 Marietta, Denton, 76201 - opposed Elise Ridenour, 2044 W. Oak, Denton, 76201 - opposed Council Member Gregory asked Ms. Ridenour what was the West Oak Neighborhood District. What made one property in and what made one property out. Ms. Ridenour stated that the group came together when negative zoning was proposed in the past. Belonging to the group meant joining the group. There were no dues and was voluntary. Council Member Gregory stated that there was a letter submitted from the West Oak group. He questioned how it was known that everyone opposed the project. City of Denton City Council Minutes June 15, 2010 Page 25 Ms. Ridenour stated that there were two neighborhood meetings and those present were unanimously opposed to it. There was a divide in the neighborhood about Bonnie Brae going commercial but not a divide about this proposal. There was no developer for the proposal and no plan for development. Council Member Watts asked if the opposition was for the rezoning without a plan for development. He questioned if there were enough restrictions to limit the development specifically to medical offices and ancillary professional services would that make a difference. Ridenour stated yes and no. If the proposal were specific, it could not be built as the parking lot and buildings would be abutting people's yards. Mayor Burroughs questioned if other uses needed a specific use permit, would that work for the neighborhood. Ridenour stated that she could not speak for neighborhood, but she would prefer some of the other options. It would be best to say this did not work and a small area plan proposal would provide a better vision for Bonnie Brae. Andy Cooper, 2319 Houston Place, Denton, 76201 - opposed Mayor Pro Tem Kamp asked what his main objection to the proposal was. Cooper stated that they were afraid about Houston Place having to going through to Bonnie Brae. Cunningham stated that there was a requirement to punch Houston Place to Bonnie Brae; however, a variance process could be requested to not to push it through. This was a city policy but the applicant could apply for a variance not to push it through. Mayor Pro Tem Kamp asked if that was on the mobility plan. Cunningham stated it was a Denton Development Code requirement. Council Member Gregory asked who would be responsible for the variance to not connect Houston to Bonnie Brae. Cunningham replied it was the applicant. Council Member Watts stated that he did not understand the concept to push Houston Place through to Bonnie Brae. He felt that perhaps the Council could place a restriction on the ordinance to prevent Houston Place to go through to Bonnie Brae. Joann Nunnelly, 2215 Houston, Denton, 76201 - opposed Michelle Lynn, 2120 Houston Place, Denton, 76201 - opposed Comment Cards were received from the following: City of Denton City Council Minutes June 15, 2010 Page 26 Joyce Palmer, 1905 W. Oak, Denton, 76201 - opposed Caroline Polliard, 1800 W. Oak, Denton, 76201 - opposed Ann Jordon, 2224 Alamo Place, Denton, 76201 - opposed Francisca Massardo, 2035 Houston Place, Denton, 76201 - opposed Steve Friedson, 2044 W. Oak, Denton, 76201 - opposed J. W. Gibbons, 2015 Houston Place, Denton, 76201 - opposed Henry Gibbons, 2015 Houston Place, Denton, 76201 - opposed Mrs. Tom Harpool, 2222 Houston Place, Denton, 76201 - opposed Dora Sloan, 2209 Houston Place, Denton, 76201 - opposed Leona Langford, 2219 Houston Place, Denton, 76201 - opposed Susan Pax, 2270 W. Oak, Denton, 76201 - opposed Melody Buys, 314 N. Bonnie Brae, Denton, 76201 - opposed Mike and Linda Nolen, 2280 W. Oak Street, Denton, 76201 - favor The applicant was allowed a five minute rebuttal. Mayor Burroughs asked about the access on the corner lot. Reichhart stated that right now the access would be internal on the development. Council Member King asked about Houston Place. Reichhart stated that they had proposed a restriction in terms of Houston Place with the zoning but the Planning and Zoning Commission would not allow it. City Attorney Burgess stated that the long piece of property next to the historic district would be excluded from consideration of the proposal. It would also not be considered in the overlay and zoning restrictions. Because of the withdrawal of that consideration, the supermajority vote was reshaped and a simple majority vote would now be required instead of a supermaj ority vote. Council Member Heggins asked if the developer had polled doctors about the site. Richhart stated that they had been approached by a number of doctors about the site. Deputy City Attorney Drake stated that the Houston Place issue was a platting question and not a zoning question. There was a variance process that could be pursued to replat to a residential neighborhood and would require a public hearing similar to a zoning case. The site plan could make a condition of zoning and indirectly limit Houston Place. Conditions could also be put on the zoning develop as the campus was not sold lot by lot. Council Member Watts stated whether it was this site plan or another incorporated site, the plans did not show Houston Place going through but if the developer wanted to replat, the site would be modified with public process of a public hearing. He questioned if Council couldn't say with the zoning overlay district that there would not be a city street running through the overlay. Drake replied to not think of it as a zoning issue as it was a platting issue. If Council felt it was important to the integrity of the area rezoning, it could put it in as a condition. City of Denton City Council Minutes June 15, 2010 Page 27 Council Member Gregory asked if the Planning and Zoning Commission was ministerial with some discretionary powers. Drake replied that almost all items going to the Planning and Zoning Commission were ministerial while Council issues were discretionary. Zoning issues were discretionary but also ministerial if the plat met all development standards. Council Member Gregory asked what would be the difference of opinion as to whether a plat conformed or not. Drake replied that was when split votes were done. Reichhart stated that they preferred that there not be any access to Houston Place. There was also the requirement of a minimum 15 foot buffer along the entire eastern side of the property. The Mayor closed the public hearing. Council Member Watts questioned if a restriction could be placed on the zoning to preclude access to Houston Place. Drake replied yes. Mayor Burroughs recognized the need to protect the neighborhood but also recognized that the roadway was in many regards a commercial roadway. How to preserve that while recognizing change was a dynamic of the city. To him it meant transition which provided challenges. The only way he could see looking favorably on the proposal would be to leave out the one parcel and the property needed to be consistent with a transition to the neighborhood as well as recognizing growth. The zoning situation was not at that level of detail. He felt the only way to do that would be to heavily restrict the property for a specific use purpose permit everything except for office use. The corner address was different as it had different zoning. A condition would have to be that Houston Place could not run through to Bonnie Brae. Council Member Engelbrecht agreed that if there were a planned development approach, it would help the situation. There was an opportunity to study the area in advance and he had a sense that the area from Bonnie Brae to Oak was in transition. There was also still the question of Houston Place. At this point he was not in favor and felt that there was a need to study the area more before passing anything Council Member Gregory stated that Lillian Miller was an example of a good transition of zoning on major thoroughfares. He felt such an approach along Bonnie Brae would be the right approach. He did not think this request was the way to get this done as there were still too many unanswered questions. Mayor Pro Tem Kamp stated that she was undecided on this proposal. She felt Council had to be realistic about what was going to happen along Bonnie Brae; however, she was uncomfortable with the proposed configuration and outstanding questions. She questioned making the site plan as a condition for approval and if that would take care of lot of what Council was discussing. City of Denton City Council Minutes June 15, 2010 Page 28 City Attorney Burgess stated that could be a condition if the Council desired. Council Member Watts stated that Bonnie Brae was in transition and the only way he would be in favor was to place conditions on the proposal. Several of those would be no access to Houston Place; uses other than medical/office would require a specific use permit; the buffer on the north side would have to be larger. Another suggestion would be require a specific use permit for the entire area which would require a site plan to ensure a plan was in place. Council Member Watts motioned to approve the ordinance subject to no access to Houston Place; any use other than medical/office would require a specific use permit and the buffer on the eastern boundary would be 30 feet with an eight foot high fence. Mayor Burroughs offered a friendly amendment to include the uses that were eliminated at the Planning and Zoning Commission. Council Member Watts agreed to the friendly amendment. Mayor Pro Tem Kamp offered another friendly amendment to develop the site as a campus and make a site plan a condition. Cunningham stated that the motion should be reworded so that the property would not have access from Houston Place. Drake stated that the requirement of a site plan on top of a specific use permit was redundant and should be removed. He also questioned fire access on the site. Cunningham suggested having the site plan as part of the approval. Fire access from Houston would not be an issue. Drake felt that Council needed to determine if it wanted this site plan or the specific use permit process. If the conditions in the motion were not approved by the applicant, the applicant could protest the rezoning which would require a supermajority vote by Council. He suggested determining if the applicant was in favor of the proposal. Reichhart stated that they would not be in favor of the motion as it now stood. Having to get a specific use permit for every use would be a hardship. If everything was tied to a specific use permit, it would be difficult to deal with architectural standards or layout. The specific use permit could be denied just because someone didn't like it. If the specific use on the site plan could be tied down for medical use that would address buffering and architectural standards and would be different than a specific use permit on everything which would be an unknown. Council Member Watts stated that the presentation stated a medical office park. Unless there was a way to ensure a medical office park use, he was trying to tie down what could be developed. Reichhart suggested an alternate development plan for medical use or offices and all other uses have a specific use permit. Medical, office and ancillary uses would be permitted and all other uses would need a specific use permit. City of Denton City Council Minutes June 15, 2010 Page 29 Mayor Burroughs suggested carving off professional service office use and to table the proposal to the next meeting to develop a concept with the conditions listed in the motion. Fashion a site plan requirement for professional service office use and develop the standards. Council Member Gregory stated that he would like to see the applicant and the neighborhood have more of a chance to work on this. He would also like a statement from the owner of property that would be surrounded by the proposal. Reichhart stated that the property would not remain residential. The owner was looking to sell it commercially. Council Member Watts motioned, Mayor Pro Tem Kamp seconded to continue the proposal based on the Mayor's previous suggestion. Council discussed whether to have the public hearing reopened to allow for public comment at the next meeting when the proposal would be considered. Council Member Watts withdrew his motion to table and Mayor Pro Tem Kamp withdrew her second. Council Member Engelbrecht motioned, Council Member Heggins seconded to reopen the public hearing. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. Council Member Engelbrecht motioned, Mayor Pro Tem Kamp seconded to continue the Public Hearing to the July 20th Council meeting. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. Council considered Item 4D. D. Hold a public hearing and consider adoption of ordinances of the City of Denton, Texas regarding the following matters, as they relate to the Inspiration (Hunter Ranch) MPC zoning district classification and use designation [MPC07-0001, Inspiration (Hunter Ranch)], generally located on both sides of I-35, between Robson Ranch Road and Vintage Boulevard in the City of Denton, Texas: Ordinance No. 2010-159 1. To rezone approximately 196.5 acres of property owned by the City of Denton for a park, located at the northwest corner of Allred Road and Bonnie Brae Street, from the Inspiration MPC (MPC07-0001) zoning district classification and use designation to a Neighborhood Residential 1 (NR-1) zoning district classification and use designation; and City of Denton City Council Minutes June 15, 2010 Page 30 Ordinance No. 2010-160 2. To amend the 3,331 acre Inspiration Master Planned Community Zoning district classification and use designation [MPC07-0001, Inspiration (Hunter Ranch)], by amending the Zoning Document, Development Plan Map, and Development Standards; and providing for a penalty in the maximum amount of $2,000.00 for violations, thereof, severability and an effective date. (AMPC 10-000 1) The Planning and Zoning Commission recommended approval (7-0). Mark Cunningham, Director of Planning and Development, presented the details of the proposal which consisted of two separate actions. One action was to remove a public park site from the master planned community and rezone the park site from Master Planned Community to Neighborhood Residential 1. The second action was to amend the master planned community zoning district by amending the zoning document development plan map and development standards. On November 4, 2008, Council approved a Master Planned Community zoning document and development which established the Inspiration Master Planned Community. Within the ordinance were zoning and development standards and zoning districts. The purpose of the proposed amendment was (1) reduce the number of pad sites. The 2001 plan for development indicated 50 sites, the 2008 current approved master planned community indicated 21 sites, two of which were existing and nineteen would be new. The 2010 proposed amendment indicate 19 sites. (2) Provide certainty to existing perimeter residents by eliminating Pad Site "D". Existing perimeter sites 7 and 10 and future C & L would have increased wellhead setback to 750' and conditions for noise, air monitoring, access, screening, lighting and flaring at parameter sites. The amendment would also provide for the addition of No-drill zones. (3) Provide certainty for 3300 acre Master Planned Community in terms of surface real-estate and mineral development coordination, flexibility in pad site location subject to Sub 22 Drilling Ordinance and a minimum of 19 pad sites by right including the 5 already drilled on. The summary of the amendments included (1) rezoning of the 196 acre park site, (2) reduction in multi-family units from 3,408 to 3,249 units, (3) reduction in single family units from 11,914 to 11,135 units, (4) elimination of NR-1 (N) gas pad districts and allow for 19 total pad sites, (5) provide conditions to pads located along primary existing residential in terms of 750' wellhead setback, elimination of "D", no drill zones, existing perimeter sites 7 and 10, future perimeter sites C and L, subject to conditions and all other pads subject to Subchapter 22 per time of permit, and (6) no changes to ESA/Open space, water, sewer, drainage, phasing or economic plan. There were several different scenarios for a noise level recommendation. The staff recommendation to the Planning and Zoning Commission for gas pad sites 7, 10, C and L indicated that the noise level for drilling, completion, production, operation and re-work activities would not exceed 79 decibels measured at any point 750' from the gas well site. Commissioner Ryan had suggested the noise level would not exceed 79 decibels measured at any point 500' from the gas well site. The staff recommendation measured at the actual protected use location. Five hundred feet was an arbitrary distance that could require unattractive sound City of Denton City Council Minutes June 15, 2010 Page 31 blanket walls without any benefit to residents. In addition, the operator was required to submit and abide by a noise mitigation plan. Council Member Gregory stated that Exhibit 5 dealt with the proposed gas well parks. He asked how many acres each site had. Cunningham stated that they varied in size. Council Member Gregory asked if there was a restriction on the number of actual wells per site. Cunningham replied there were no restrictions per park site, just a limited number of park sites. On the east side of the power lines there could be no more than four sites. Council Member Gregory asked if the Railroad Commission had limits on the number of wells on a park site. Cunningham stated that the governing issue dealt with environmental issues and not the number of wells on site. Council Member Watts asked that in order to get the gas well permit, did the applicant first have to plat. Cunningham stated that except for Sites C, 7, 10, and L, the applicant would have to plat first then get the drilling permit. Council Member Watts questioned if there was an amendment to the Denton Development Code which version would be used. Cunningham stated that it was possible to have a plat in a zoning district but when coming in for a permit, the separation criteria might have increased. If there were an approved gas well plat but not vested with a permit which had then expired, the new permit would have to be consistent with current standards. If there were an approved plat under the current 500' separation and vested, all would be vested. Mayor Pro Tem Kamp asked about the number of wells to drill with the original plan. Cunningham stated that originally there were 84 wells which were reduced to 19. A trade off was done to eliminate Pad Site D and an additional site. Mayor Pro Tem Kamp asked if the applicant met with the neighbors. Cunningham stated that the neighbors voiced support for the proposal. The major issue was the elimination of Pad Site D. The Mayor opened the public hearings for D 1 and D2. Robert Flozenlogen, Hunter Ranch applicant, stated that they favored the amendments from the original recommendation. The staff recommendation was 79 db, 750 feet from the gas well. He City of Denton City Council Minutes June 15, 2010 Page 32 requested Council use the staff recommendation instead of the amendment from the Planning and Zoning Commission. Council Member Gregory stated that other cities noise levels had less than 79 db at 750 feet with sound walls. Flozenlogen stated that the wall was placed on the pad site. Their recommendation included a noise mitigation plan which was the best solution and on their list of requirements. The original staff recommendation measured at a protected use to monitor the sound level for an objective place for measuring. Council discussed the merits of the level of decibels and number of feet from a protected source. Flozenlogen requested that Council keep to what staff had recommended and what had been vetted with the community. The restriction would only apply to four wells. Council Member Engelbrecht asked about narrowing the number of wells to 19 to match the number of well sites. Flozenlogen stated that the sites ranged from 3-5 acres. The number wells per site would be a factor of economy and gas prices. The following individuals submitted Speaker Cards: Martha Wood, 9305 Perimeter, Denton, 76206 - favor Kathleen Wazny, 9117 Perimeter, Denton, 76207 - favor Council Member Watts asked Ms. Wazny if she was satisfied with the noise restriction levels. Wazny replied that the no drill zone helped with the noise reduction. Elma Walker - favor Flozenlogen was given a five minute rebuttal. Cunningham stated that a noise management plan and associated decibels would be related to the protected stricture. Council Member Engelbrecht stated that just because a protected stricture was not within 750 feet, sound carried greater at night and could still be disturbing. He suggested the distance be set at 500 feet for all wells due to the noise impact and the variable for the conditions for sound travel. The Mayor closed the public hearing. Mayor Burroughs suggested 79 decibels at 500 feet or 70 decibels at 750 feet. City of Denton City Council Minutes June 15, 2010 Page 33 Flozenlogen stated that if the request stood from the community to have the Planning and Zoning Commission recommendation 79 at 500 feet, they would accept that. Council Member King indicated that the walled screening was a factor with the community and he was satisfied with 79 decibels at 750 feet and no screening for those 4 wells. Mayor Pro Tem Kamp motioned, Council Member Heggins seconded to adopt the ordinance for 4.D.1. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. Council Member Heggins motioned, Council Member King seconded to adopt the ordinance for 4.13.2 which included the 79 decibels at 750' plus all other conditions recommended by the Planning and Zoning Commission. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. Item 4.C. was considered. C. Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas providing for amendments to the Rayzor Ranch Overlay District (RROD) Section 35.7.15 of the Denton Development Code (DDC) on property encompassing approximately 410 acres of land in its entirety and being located generally on both sides of U.S. Highway 380 (West University Drive), between Interstate Highway 35 and Bonnie Brae Street. The Northern Tract of the RROD contains approximately 153 acres north of U.S. Highway 380 and the Southern Tract contains approximately 239.05 acres south of U.S. Highway 380. The proposed amendments are related primarily to the Southern Tract which is located within a Regional Center Commercial Downtown (RCC-D) and a Neighborhood Residential Mixed Use (NRMU) zoning and use district as modified by the Rayzor Ranch Overlay District. Specifically the applicant's proposal includes: 1. Modifying certain previously approved development standards, 2. Proposing an increase to Multi-family density on the Southern Tract, 3. Replacing the previously approved Master Site Plan with a Conceptual/Schematic Plan on the Southern Tract, 4. Amending and adding definitions to land uses on the Southern Tract, 5. Amending and defining landscape guidelines on the Southern Tract, 6. Amending and defining architectural guidelines on the Southern Tract, and City of Denton City Council Minutes June 15, 2010 Page 34 7. Amending and defining signage guidelines on the Southern Tract. Chuck Russell, Planning Supervisor, stated that Allegiance Hillview and RED Development were proposing to amend the Rayzor Ranch Overlay District and provide for design standards related to signage, landscaping and architecture for the Town Center and residential areas within Rayzor Ranch South. The amendments focused on south side of the US 380 site. The applicant's proposal consisted of seven components (1) modifying certain previously approved development standards, (2) increasing multi-family density on the Southern Tract, (3) replacing the previously approved Master Site Plan with a conceptual/schematic plan on the Southern Tract, (4) amending and adding definitions to land uses, (5) amending and defining landscape guidelines, (6) amending and defining architectural guidelines, and (7) amending and defining signage guidelines. The proposal would divide the south campus into three primary areas for land use locations and height. The main subareas consisted of RR-1 which was the Rayzor Ranch Town Center, RR-2 which was the retail area that would surround the Town Center and the South Mixed-Use District which would accommodate nonresidential, single-family and multi-family residential uses. (1) Development Standards - the amendments consisted of a concept/schematic and site plan process and criteria, divided the South Campus into three primary areas, moved land use locations and height restrictions. (2) Increasing the multi-family density on the southern tract - the proposal was to increase the multi-family dwelling units from 750 to 1800 dwelling units with the additional units being located in the multi-family density zone. The other 750 units would be located throughout the zone. Staff reviewed the following items when considering the increase in multi-family density: the concept plan, site plan, TIA/Platting, permit milestone, design standards, other projects, sustainability, and jobs to units. Jobs-housing balance figures were reviewed. (3) Replacing previously approved Master Site Plan with a Concept Plan - the proposed concept plan had the Town Center retail in the RR-1 area, the additional RR-2 retail and all other areas in other categories. The applicant had committed that everything on the south side would go to site plan detail which would go to the Planning and Zoning Commission for approval. The applicant was not proposing the detail in the other categories at this time. (4) Amending and adding definitions to land uses - highlights included definition of a "big house" which consisted of 10 or fewer dwelling units located in a single building which was intended to resemble a single large house. The dwelling units in a big house would count towards the total number of single-family attached dwelling units and not towards the total number of multi-family dwelling units. A new definition for a convention center, garden-style home and townhouse-style home was also provided. Staff had spent a lot of time refining the definition of the townhouse-style home so that it would not be conceived as multi-family. In order to meet that definition, a provision was added that no units would be vertically above or below another use or unit within the stricture. These uses would not count against the figures for the multi-family units. (5) Landscape guidelines - With the north side development, the cap for surface parking would be exceeded by 2000 spaces. To compensate for parking beyond code and surface parking area, City of Denton City Council Minutes June 15, 2010 Page 35 the applicant agreed to landscaping and tree plantings beyond the code requirement. Staff was encouraging the applicant to utilize tree planting and canopy to mitigate for their requested Code variances. Staff would also allow the applicant to use proposed open space and tree canopy within the Southern Tract to help compensate for any shortage of open space and tree canopy proposed within the Northern Tract. Russell reviewed the applicant's proposed tree canopy and open space by percentages. A comparison was shown in terms of the current zoning and the proposed base zoning as it compared to the proposed percentages. (6) Architectural guidelines - the guidelines were different than what was provided for in the northern tract but included a large amount of detail for the RR-1 and RR-2. (7) Signage - the applicant was proposing to expand the special sign district for the RR-1 and RR-2 areas. There would be large signs along the I-35 frontage, directional signage along US 380 and in the interior Town Center, active lighting and signage along the main street. Council Member Gregory noted that his backup contained architectural standards for the RR-1 and RR-2 areas but none for the multi-use area. Russell stated that the only architectural standards outside RR-1 and RR-2 would be behind Exhibit CI and 0 entitled "multi-family architectural guidelines". These were the base code requirements and 0 indicated more restrictions but not on the level for RR-1 and RR-2. Council Member Gregory stated that the residential section of the Legacy development had a variety of styles. Russell stated that those detailed design guidelines would be presented at a future date. They were still going through that process and needed the guidelines before going to the Planning and Zoning Commission and City Council. Mayor Burroughs asked at what stage the applicant must come forward with qualitative architectural standards. Russell indicated that it would be prior to the site plan. Those standards would have to be in place before reviewing the site plan for recommendation for the Planning and Zoning Commission. Staff and the applicant were working through the standards in various areas as they were going through the process. Mayor Burroughs asked if there was a necessity of having to approve a density change separate from the architectural design standards. He would be more comfortable if he could view both at the same time. He questioned if there was a necessity to consider the density change before receiving the detailed architectural designs. Russell stated that it got down to the critical mass of people living as close to retail as possible and trying to provide vitality and shoppers. Mayor Burroughs questioned if the density consideration could be postponed until the architectural standards for the multi-family were received. City of Denton City Council Minutes June 15, 2010 Page 36 Russell indicated that the applicant would be able to explain the critical time frame. Council Member Watts asked what section of the proposal indicated that more processes for the architectural guidelines were to follow. He indicated that he had a concern giving the Planning and Zoning Commission final approval for a site plan. The components of the site plan did not contain any elevations for the architecture. Russell stated staff may want to clean up that language as it was understood to him what the process would be but that didn't mean that it would be understood for someone else. In order for staff to sign off on the architectural compatibility, they needed to see the site plan elevation and landscape design. Additional language could be included that every subarea on the south side and every phase would need a set of guidelines and elevations. Council Member Watts agreed that part of the justification for the increase in density would be the quality of the project. He expressed a concern about the definition of a "big house" containing 10 units and only applying to single-family units. His concern also included the townhome units applying to the single-family numbers. The proposal was for a large increase in multi-family density but townhomes and big houses were going towards single-family numbers. Council Member Gregory questioned some of the permitted uses. In a highly concentrated multi-family and single-family area, drive through facilities and quick vehicle services would be allowed. Russell replied that the intent was that those types of retail uses would be limited to the RR zones but not in the single-family or multi-family zones. Council Member King indicated a concern about the definitions of single-family units and questions about the units with more than three bedrooms. The Mayor opened the public hearing. The following individuals spoke during the public hearing: Charles Hodges, applicant, spoke in favor. He indicated that he had no problem with the submittal of elevations with the site plans and no problem with those assurances and the details. It was a matter of appropriate timing to do so. His goal was to have 5-6 different multi-family projects with different texture and styles. Drive though and quick vehicle services might be allowed along the I35 frontage area. Council Member Gregory asked Mr. Hodges about the "big house" concept and the fact that it sounded like multi-family and why it would count towards single-family units. Hodges stated that the stricture looked like a mansion but consisted of integrated units. They were vertical separated single-family units as opposed to multi-family units. Council Member Gregory questioned if it were possible to fit all the single-family attached, single family detached and high density areas into the high density zone. City of Denton City Council Minutes June 15, 2010 Page 37 Hodges stated that they had done a density test and the figures would work. Council Member Gregory stated that the applicant was asking Council to set aside the currently approved plan and replace it with a concept plan. He questioned by the applicant would imagine that setting aside the entire plan that anything from the other plan automatically be vested in the new plan. Hodges stated that they were enhancing the specificity in the old plan as it could not be built as submitted. They were enhancing and detailing the project over the old plan. Steve Backman, RED Development, spoke in favor. Mayor Burroughs stated that there were already 750 units of multi-family approved. He questioned why approval of the additional units couldn't wait until some architectural quality standards were approved. Backman indicated that on the retail side, there was a concern related to keeping the document together. John Ryan, 2128 Emerson, Denton, 76209 - spoke in opposition. Hatice Salih, 300 Northridge, Denton, 76201 - spoke in opposition Alex Payne, 923 Ridgecrest Circle, Denton, 76205 - spoke in favor Jim Killion, 1903 Mistywood, Denton, 76201 - spoke in opposition Rob Rayner, 1200 Woodrow, Denton, 76205 - spoke in opposition Bob Clifton, 1800 Morse, Denton, 76205 - spoke in opposition Dalton Allen, 111 Lexington, Denton, 76205 - spoke in opposition Comment cards in opposition were submitted by: Eddie Lane, 111 W. McKinney, Denton, 76201 Victoria Hodge, 1833 N. Bell, Denton, 76201 Mrs. Tom Harpool, 2222 Houston Place, Denton, 76201 Michelle Lynn, 2120 Houston Place, Denton, 76201 JoAnn Nunnelly, 2215 Houston Place, Denton, 76201 The applicant was given a five minute rebuttal. Hodges stated that he would agree to count the "big houses" towards the multi-family numbers. In terms of parking, the underlying multi- family zoning would address parking. There would be a detailed site plan that would address parking configuration, parking islands, percentage that would be closed parking and the percentage that would be open. Council Member Engelbrecht understood that the 750 proposed units and the 1050 proposed units were all within the density ring. Hodges replied that the proposed 1050 units would be in the density ring with the 750 units scattered in the South Mixed-Use District. City of Denton City Council Minutes June 15, 2010 Page 38 Council Member Engelbrecht stated the proposal showed every other site had multi-family and questioned why it was needed at the other sites. Hodges replied that it would provide good diversity within the project. Council Member Engelbrecht questioned why the access road had eleven signs proposed. He felt that would almost be too cluttered. Backman stated that the signage added energy to the project. At this time, he didn't know about the exact spacing of the signs which would determine the number that would be placed. Council Member Engelbrecht asked if RED would be willing to work with staff to better define the development. Council Member Watts stated that Hodges had indicated that he would not have a problem adding elevations to the site plan criteria. Watts indicated that he a concern about the Planning and Zoning Commission having final site plan approval and would prefer the Council having final approval of the site plan. Hodges stated that the practicality and reality of that time line was that there might be 15-30 cases with an average time to get through Planning and Zoning Commission and Council of four months. That was a large amount of process time. All of the details were presented so that the Planning and Zoning Commission would know what was needed for approval. Council Member Watts stated that he was still concerned about the justification for the large amount of increased density. He understood about sustainability over the long term but when 750 units could be started with 20,000 feet of form board survey that was not about sustainability. He had a problem with the townhomes and felt that at the very least, a portion should apply to the multi-family number. He questioned if the number of multi-family units had to be approved at this meeting. Hodges replied that it would not make any difference; the analysis would be the same for the number of units needed. Council Member Gregory stated that he understood what Mr. Hodges was saying about all of the site plans coming to Council and the amount of time it would take. He still had a concern that if the ordinance contained more detailed architectural standards similar to the retail, it would be easier for Council to approve the increased multi-family. Hodges suggested having the multi-family site plans come to Council and all the other mixed use site plans go to the Planning and Zoning Commission. Council Member Watts indicated that was what he had in mind. Hodges felt that was one more layer of safety with which Council could look for the quality of the proposals. City of Denton City Council Minutes June 15, 2010 Page 39 Council Member Gregory stated that he had a question regarding architectural standards for retail. Part 5 of Building Design and Materials listed types of materials to be used on all sides of a building visible from the streets or internal customer areas on the site. One of those materials listed was EIFS which he had been told by several builders was not a high quality building material. Backman replied that EIFS was a high quality material and that many of their projects contained EIFS. It was a very common building material and was probably the most used material on their shopping centers. Council Member Gregory stated that he had heard that EIFS had problems with water leakage, mold buildup and birds making holes in it. Backman stated that was not their experience with the material. They used the material in all different types of weather and had not had the problems noted. Council Member Gregory stated that the plan offered showed an increase in the open space, landscape space, canopy and parking from the requirements of the underlying zoning of RCCD. RCCD required one green landscaped island for every 10 parking spaces while the applicant was proposing one green island for every 15 parking spaces. That was an approximate 33% decrease. Backman replied that they had done a lot of study on this issue. Regarding the canopy, they were able to show 20% of landscape in the parking area and 25% on the overall project which was a 5% increase overall. There would be smaller parking fields with different orientations of parking stalls and each one would have buffer areas with canopies that would be wider which would allow them to space them out a little different than Code. The average was one for every 15 parking spaces. A study they had just completed on their latest site plan showed one for less than every 10 parking spaces. Council Member Gregory suggested using those figures. Backman stated that 15 was an average. He indicated that they could go to one for every 12 parking spaces. They would like some a bit larger so would like some up to 10-15 parking spaces. Council Member Gregory stated that he needed assurance that the outer rim would not be shortchanged to make the Main Street area better. He asked if the applicant would be willing to go on average one to every 10 on parking spaces. Backman agreed that they could go to the average of one island to every 10 parking spaces. They would prefer one to every 12 but could live with one to every 10. Council Member Gregory indicated that he could go with one to every 11 parking spaces. Backman agreed. Hodges presented the idea of 25% of the townhomes going towards the multi-family units. City of Denton City Council Minutes June 15, 2010 Page 40 Mayor Burroughs replied that would help. He stated that the price point level of the multi-family units was suppose to be significantly higher than the average unit in the City of Denton. He asked if Hodges had a sense of the price point for the proposed units. Hodges replied that it would be approximately $1.15 to $1.25. Mayor Burroughs asked why the original 750 units were exempted from the prohibition of rental by individual bedrooms. Hodges stated that lot of the transitional and senior housing was done by the single bedroom in multi-bedroom units. Mayor Burroughs stated that the intent then was for the 750 units to be geared towards seniors. Hodges replied that the 750 units could be built all over the South Mixed-Use District and certainly some of those would be geared towards seniors. Mayor Burroughs indicated that rental by the bedroom was a very sensitive position in Denton and asked if it were a vital issue to rent by the bedroom. Hodges stated that they wanted diversity and not preclude anyone. Mayor Burroughs asked if somewhere in site plan it indicated that architectural standards would be there or elevations would be attached. Hodges stated that they had already agreed on elevations. Mayor Burroughs asked if Council could direct staff to place such language in the ordinance as it currently was not included. Russell replied it should be included in the list of items to be included in the ordinance. The intent was known but it would be best to have it included. Mayor Burroughs asked of it would be possible to put in a condition there would be no voluntary application for a tax exemption for commercial tenants. City Manager Campbell indicated that was addressed in the 380 agreement. Council Member King confirmed the big houses would go towards the multi-family numbers and 25% of the townhouse to multi-family but not the limitation of the 750 units limited to three bedrooms. Hodges stated that they had already done that on the 1050 units and could also do that on the 750 units if Council desired. Council Member Gregory stated that he understood that the applicant wanted some flexibility for leasing by the bedroom for a senior facility and that type of facility would be less than three bedrooms. City of Denton City Council Minutes June 15, 2010 Page 41 Council Member Gregory indicated that he really liked the restriction to three bedrooms. Council Member Engelbrecht asked if any of the multi-family units would be four stories or more. Hodges replied that they did not want any three story walk up garden units. Council Member Watts stated the trigger point for the multi-family came out to approximately 333 square feet of retail per unit. The 750 was almost less than half of the 1800 as requested. If the trigger point for the 1050 units was 600,000 square feet of foundation, why not do 100,000 square feet of slab. Hodges stated that they had looked at that and it could be just one anchor store which was an issue. Various definitions were tried with this as the best alternative. Council Member Watts stated that the 20,000 feet of form board survey not restricted to the Town Center was not representative of an equitable number of the 750 units that the applicant wanted to immediately permit. He suggested that a greater number such as 100,000 to 150,000 restricted to the Town Center would get to a more equal percentage of the multi-family requested immediately compared to the ratio of the Town Center which was 600,000 feet. He questioned if it were possible to limit half of the 750 units to not be rented by the bedroom. Hodges felt that restriction would knock out that use. Council Member Watts reviewed the conditions he had noted thus far: (1) all site plans for multi-family uses would go to Council, (2) the site plan criteria would include elevations and architectural standards, (3) modify the section dealing with the expiration of the site plan for multi-family and an extension to be considered by the Council, (4) twenty-five percent of the townhomes would be used for multi-family figures, (5) big houses would be used toward multi- family figures, (6) limitation of three bedrooms on all units, and (7) 100,000 square footage of foundation off the green tagged slabs as the trigger for multi-family. Russell indicated that another would be the average of one green island per every 11 parking spaces. Mayor Burroughs included the architectural standards in the site plans. Russell stated that another was the concept plan. He was not comfortable that the symbols on the concept plan did not relate back to the intended uses. As written, it was not clear what uses were permitted in the various sections of the South Mixed-Use District. Council Member Gregory suggested that items like quick vehicle service or drive through not be automatic permitted uses. Remove several of those uses and come back for permission for those uses; understanding that there might be appropriate places for those uses but not near residential uses. Mayor Burroughs suggested dropping this into "C" for a specific use permit requirement. City of Denton City Council Minutes June 15, 2010 Page 42 Hodges suggested requiring a specific use permit if the use was adjacent to any residential area. Council Member Gregory stated that retail sales and service, drive through facilities, and quick vehicle service uses would be moved to Section C if next to a residential area. Russell stated that the only place commercial land uses would be permitted would be in the RR areas. Council Member Gregory stated that an adjustment needed in the ordinance was page 9 dealing with the definition of "big house". The language dealing with the "big house" counting towards single-family needed to be removed and that it would only count towards multi-family. Council Member Watts clarified that the trigger point would be 100,000 square feet of foundation as inspected and improved in RR-1 Hodges stated that it needed to be in both RR-1 and RR-2. Council Member Gregory noted on Exhibit C 3, Multi-Family Guidelines", if they going to rely on underlying zoning for parking requirements for multi-family, that wording needed to be included. Hodges stated that the concept schematic had that shown on the plan. Council Member Gregory requested that wording be included in Exhibit C. The Mayor closed the public hearing. Council Member Watts motioned, Mayor Pro Tem Kamp seconded to adopt the ordinance with the following additions: (1) all site plans for multi-family uses would go to Council, (2) the site plan criteria would include elevations and architectural standards, (3) big houses would count only towards the total multi-family units, (4) twenty-five percent of the townhomes would apply towards the total multi-family units, (5) 100,000 square feet of slab that had been poured and approved by the city of Denton of which would be poured either in RR-1 or RR-2 needed to occur before the first 750 units of multi-family could be permitted and/or constriction started, (6) limitation of three bedrooms on all multi-family units, (7) canopy coverage would be an average of one per every 11 parking spaces, (8) parking language for multi-family found in the concept plan would be integrated into Exhibit C 3, (9) retail sales and service, drive through facilities, and quick vehicle service uses would be permitted in the South Mixed-Use District only with a specific use permit when abutting residential and (10) City Council would have the authority to extend the expiration date of multi-family site plans. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously D. Consider appointing a nominating committee to recommend appointees to serve on the Economic Development Partnership Board. City of Denton City Council Minutes June 15, 2010 Page 43 Mayor Pro Tem noted that these would be members of the nominating committee as opposed to nominations to the Board. Council Member Gregory motioned, Council Member Heggins seconded to nominated James King, Pete Kamp and Hank Dickinson to the nominating committee. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. E. Consider appointments to Council committees. Mayor Pro Tem Kamp motioned, Council Member King seconded to approve the Council committee appointments as noted in the agenda backup materials. On roll call vote, Council Member Watts "aye", Council Member Heggins "aye", Council Member Gregory "aye", Council Member Engelbrecht "aye", Mayor Pro Tem Kamp "aye", Mayor Burroughs "aye", and Council Member King "aye". Motion carried unanimously. F. Citizen Reports 1. Review of procedures for addressing the City Council. 2. Receive citizen reports from the following: a. Bob Clifton regarding Fry Street issues, including the initiative petition requiring the establishment of a park. Mr. Clifton presented information on an Open Records Request he had submitted to the Legal Department and the ridiculous charge associated with that request. He also indicated that they were still gathering signatures for the petition for Fry Street. b. Kimberly Reynolds regarding park policies on emergency procedures for children. Ms. Reynolds spoke about emergency procedures for children with allergies and current park procedures. Her child had a severe allergy and needed to have EPI pen available for administration if needed. Current park policy would not allow park personnel to administer the pen. She asked for a change in the policy where staff would be able to administer the EPI pens if needed. G. 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 AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information City of Denton City Council Minutes June 15, 2010 Page 44 regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. Council Member Gregory asked for a follow-up report on the information presented by Ms. Reynolds. H. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no continuation of the Closed Meeting. L Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no official action taken on Closed Meeting items. Mayor Burroughs indicated that Council would be returning to the Work Session to continue the gas well amendment discussion and consider the boards and commissions item. 3. Receive a report, hold a discussion, and give staff direction concerning: (1) proposed amendments to Subchapter 23 - Definitions - of the Denton Development Code (DDC); (2) proposed amendments to Subchapter 22 of the Denton Development Code (DDC) regarding gas well drilling and production; (3) proposed amendment to Subchapter 16 of the DDC regarding gas well development platting; (4) proposed amendments to the schedule of fees contained in Ordinance 2005-237 pertaining to gas well drilling and production within the City limits and the Extra-Territorial Jurisdiction; and (5) hold a discussion, and give staff direction concerning the types of analytical testing that has been conducted at other gas well monitoring efforts within the Barnett Shale. (Gas Well Ordinance) Mark Cunningham, Director of Planning and Development, continued with his presentation. He reviewed current and recommended gas well permit requirements. Staff had wanted to reduce the life of the permits from one year to six months but the Texas Local Government Code indicated that the limit on the permits could not be less than two years. However, staff had added language that the permit would expire unless gas well drilling activities had started prior to the expiration date. If gas well drilling activities had started under a valid permit, the permit would have to be renewed annually, subject to all associated fees. Council Member Gregory asked about a short term administrative moratorium on gas well permits similar to what other cities had done. He was suggesting protection until the City's amended ordinance could be passed City of Denton City Council Minutes June 15, 2010 Page 45 Cunningham stated that there were still some concerns to work out on various issues. It had been suggested to send the proposal amendments to outside counsel for review. The amendments were going to the Planning and Zoning Commission on June 23rd for consideration. Mayor Burroughs suggested the possibility of having a council meeting after the next Planning and Zoning Commission meeting to consider the gas well ordinance. Cunningham continued with screening requirements. He indicated that cities had all different kinds of restrictions. Staff was proposing screening requirements if any part of the drilling operation was within 1,000 feet of any protected use or any lot within a previously platted residential subdivision where one or more lots had one or more strictures; or within 500 feet of all other uses or features. The screening would be an 8-foot high opaque decorative masonry fence, if the use, lot or feature pre-existed the commencement of gas well drilling activity. Mayor Burroughs asked if everything on the gas well pad would get a permanent brick box around it. Cunningham stated yes if in the process of drilling; yes if in process of fracking, but some facilities that were minor would look better than a box. He reviewed the noise level summary for the surveyed cities. The lowest permitted level city was Flower Mound with Denton being the highest at 90 decibels. There were many different requirements from the surveyed cities. He reviewed the recommended noise level and requirement for a noise management plan. Mayor Burroughs felt that under certain circumstances there needed to be some type of threshold level. Council Member Gregory suggested adding a location from where the measurement would be made. He questioned the provision that gave the driller 24 hours to abate a noise violation. Cunningham stated that an opportunity had to be given to abate the nuisance. Council Member Gregory requested staff provide a better reason why 24 hours were given to abate the violation. Perhaps a ticket could be given instead of shutting the operation down. Cunningham stated that the assumption was that the drill site was the offender. There would have to be a demonstration of the cause of the noise violation. Council Member Gregory suggested staff do more research on the issue and bring it back for council consideration. Cunningham stated that staff would revisit the existing ordinances. He reviewed the proposed amendments for gas well plats. The proposed amendment was if gas well drilling or production had not commenced, the associated Gas Well Development Plat would expire two years from the date that the Gas Well Development Plat was approved. The Gas Well Development Plat could not be extended. Upon expiration of a Gas Well Development Plat where gas drilling activities had not commenced, the applicant could reapply for a new Gas Well Development Plat, subject to all requirements of the Denton Development Code, as amended. City of Denton City Council Minutes June 15, 2010 Page 46 Council Member Gregory asked about limitations on the height of equipment inside the walls. Cunningham stated that he would look into it for Council. Staff was reviewing gas well testing for air, water and soils. Council Member Gregory felt that there was a need to be able to test ground well water supply near a drilling site. He suggested charging the driller for the report and provide it to the land owner to make sure the water was acceptable. The driller would be bearing the cost as opposed to the homeowner having to do it. He suggested placing that recommendation in Phase II as opposed to Phase I. 5. Receive a report, hold a discussion and give staff direction regarding nominations/appointments to the City's Boards and Commissions. Jennifer Walters, City Secretary, reviewed the Board and Commission notebooks that were going out to Council. The notebooks contained information concerning current members, current member attendance, applications and whether a current member wished to be considered for re- nomination. Council was asked to have nominations to the City Secretary by July 12th for consideration at the July 20th meeting. With no further business, the meeting was adjourned at 4:30 a.m. MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS