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October 14, 2014 Minutes CITY OF DENTON CITY COUNCIL MINUTES October 14, 2014 After determining that a quorum was present, the City Council convened in a Work Session on Tuesday, October 14, 2014 at 1:40 p.m. in the Council Work Session Room at City Hall. PRESENT: Mayor Pro Tem Engelbrecht, Council Member Gregory, Council Member Hawkins, Council Member Roden, and Council Member Ryan ABSENT: Mayor Chris Watts, Council Member Johnson Mayor Pro Tem Engelbrecht stated that the Council would consider Item 2B under the Work Session: 2. Work Session Reports ID Receive a report, hold a discussion, and give staff direction regarding 14-0626 B. innovation districts and a technology recruitment initiative for Denton. Aimee Bissett, Director of Economic Development, stated that the Economic Development Department had been working on developing new recruitment strategies and programs. One of those initiatives was recruitment of hi-tech and emerging technology companies, and the support of entrepreneurship and innovation. She stated that this program was funded in the 2014-15 fiscal year. Bissett stated that the objectives of such an initiative would include creating knowledge-based, high-paying jobs; employing our college graduates in order to keep them living and working in Denton; supporting entrepreneurship and innovation; recruiting, creating and retaining successful innovative businesses; diversifying and strengthening our tax base; increasing the average household income in Denton; encouraging infill development and redevelopment; creating substantial investment in Denton businesses; developing a workforce that was agile, technologically advanced, and employable; and fostering technology solutions to address community-wide needs. Bissett stated that a core group of community stakeholders had been meeting to explore partnership opportunities and the creation of a program to fill this specific need in Denton. This group had included representatives from UNT, the City of Denton, TechMill (a local nonprofit organization), the DEC (Dallas Entrepreneur Center) and a variety of interested community members and technology-based business representatives. Bissett stated that the Economic Development Partnership Board had requested that the City Council receive an update on the progression of those discussions and receive some information about innovation districts and a technology recruitment initiative for Denton that was presented by Rob Justice at their September meeting. Bissett introduced Rob Justice, Director of Global Innovation for Cisco Systems. Justice presented the concept, CoDenton– the way technology was intersecting with Denton. Justice stated that Denton had the highest density of tech savvy future leaders in Texas – there were 27,000 in K-12, 60,000 were in higher education, and the median age was 26.2. He stated that Denton was in a natural leadership position with accelerated growth, accessible and aligned City of Denton City Council Minutes October 14, 2014 Page 2 leadership, and a vision for responsible growth. He stated that Denton had a strong ability to attract talent and investment with a vibrant/historic downtown, a low cost of living, metroplex and recreational proximity, and culture and vibe. Council Member Johnson arrived at the meeting. Justice stated that the innovation district was creating a community of innovation where people and ideas were connected. Justice stated that innovations districts further the ability of cities and metropolitan areas to grow jobs in ways that both align with disruptive forces in the economy and leverage their distinct economic position. Innovation districts empower entrepreneurs as a key vehicle for economic growth and job creation. Innovation districts could grow better and more accessible jobs at a time of rising poverty and social inequality. A substantial number of emerging innovation districts were close to low- and moderate-income neighborhoods, offering the prospect of expanding employment and educational opportunities for disadvantaged populations. Innovation districts could reduce carbon emissions and drive denser residential and employment patterns at a time of growing concern with environmentally unsustainable development. Innovation districts could help cities and metropolitan areas raise revenues and repair their balance sheets at a time when federal resources were diminishing and many state governments were adrift. Justice stated that implementation strategies included building a collaborative leadership network in which the Council played a critical role; setting a vision for growth; pursuing talent and technology; promoting inclusive growth by stimulating local entrepreneurship, revitalizing neighborhoods and education; and enhancing access to capital by redeploying and leveraging local capital and providing a roadmap for broader private, civic and public sector investment. Council Member Roden stated that there was potential for a city of our size to lead the way in uncharted territory. Mayor Pro Tem Engelbrecht stated that he had a concern for what the next big vision would be for Denton. Roden stated that when the City started figuring out how to implement this there would always be obstacles. Bissett stated that she would bring the Council more information at next week’s Council meeting. Following the completion of Item 2.B., the City Council convened into a closed meeting at 2:35 p.m. to consider the following. 1. Closed Meeting: ID 14-0563 Consultation with Attorneys – Under Texas Government Code, Section A. 551.071. Consult with and provide direction to City’s attorneys regarding legal issues and strategies associated with Gas Well Ordinance regulation of gas well drilling and production within the City Limits and the extraterritorial jurisdiction, including: City of Denton City Council Minutes October 14, 2014 Page 3 Constitutional limitations, statutory limitations upon municipal regulatory authority; statutory preemption and vested rights; impacts of federal and state law and regulations; impacts of gas well drilling upon protected uses and vice-versa; moratorium on drilling and production; other concerns about municipal regulatory authority or matters relating to enforcement of the Gas Well Ordinance; settlement matters concerning gas well drilling in the City; surface development issues involving surface and mineral estates; and legal matters associated with a citizen’s initiative regarding hydraulic fracturing where a public discussion of these legal matters would conflict with the duty of the City’s attorneys under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. Mayor Watts arrived at the meeting. ID 14-0662 Consultation with Attorneys – Under Texas Government Code, Section B. 551.071. Consult with and provide direction to City’s attorneys regarding legal issues associated with the proposed Convention Center project, including Tax Increment Reinvestment Zone (TIRZ) participation agreements and other legal documents associated with the project, where a public discussion of these legal matters would conflict with the duty of the City’s attorneys under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. The Closed Meeting adjourned at 7:55 p.m. Following the completion of the Closed Meeting, the City Council convened in a Work Session at 7:55 p.m. to consider the following items: 2. Work Session Reports ID 14-0616 A. Hold a discussion and provide staff direction with regard to possible amendments to the City Council Rules of Procedure and the annual meeting schedule for the City Council of the City of Denton. Item 2.A. will be re-scheduled to another meeting date. ID 14-0653 Receive a report, hold a discussion and give staff direction regarding the C. Hickory Street project. John Davis, Director of Engineering, updated the Council on the Hickory Street improvements project. Construction began on June 23, 2014 with completion of the project anticipated for February 2015. Davis stated that construction of the Williams Trade Center Parking Lots was conducted as Phase 1 in order to provide parking for businesses along the project during construction. For construction of Phase 3A (Russell to Bell), it was decided to close this segment of the street in order to construct and re-open it much faster with only three businesses near the corner of the closure being slightly affected. Traffic flow was maintained for the remainder of the street through Russell and Industrial Streets. The travel lanes for this segment were re-opened to traffic on October 7, 2014. Construction of underground storm drainage from Russell to west of Industrial would be constructed as Phase 4A during October 13 - 22, 2014, in order to construct the remainder of the City of Denton City Council Minutes October 14, 2014 Page 4 major underground facilities and identify any additional underground conflicts. The area would be temporarily paved until the final parking and sidewalk construction was conducted as Phase 6 during January 27 - February 28, 2015. Phases 4B and 6 would be constructed in segments in order to maintain access to businesses along the Phases. Phase 5 (street segment area adjacent to Locust Street and the Courthouse Square) would be started after the holiday season. This Phase was scheduled for construction January 5 – January 27, 2015. Davis stated that Engineering staff have tried to stay in communications with businesses in the area by using the City’s website and social media to provide updates on the construction work. Staff has conducted periodic meetings with property owners to hear concerns they might have and provide new updates. Julie Glover, Economic Development Program Administrator, stated that Economic Development had been working with the Convention and Visitors Bureau for several months on a campaign to assist businesses in this area and minimize impact on their sales. They had launched an app, “Dig Little d”, which showed where public parking was located, updates on construction and Daily Deals. Glover stated that she was working with a University of North Texas Public Relations class, which was designing a campaign aimed at relieving customers’ apprehensions about traveling to and from the construction area. Directional signage to the Williams Trade Center Parking Lots for “free parking” and informational signage to advise citizens that ”Hickory Street businesses are open” were being developed for installation in the near future. The Council discussed whether to amend the construction contract to pay for two work shifts a day to speed up the project. The option would cost about $400,000 and shave about four weeks. Instead of finishing at the end of February, the project could be finished in January. Staff cautioned the Council that the additional shift could be noisy for downtown residents and could also inconvenience evening and night customers. Since the additional cost and inconvenience wouldn’t get the project done before the holiday shopping, the Council decided the extra cost wouldn’t be a good trade-off. Staff also stated that they could use a high-early-strength concrete which would shorten the concrete curing time and allow pedestrian and vehicular traffic on new sidewalks and pavement approximately six days earlier. This would cost an additional $90,000. Council discussed looking for possible incentives to reward the contractor for completing part of the project early. If something could be found, Davis agreed to bring the information back to the Council. Council Member Ryan suggested that the City be in constant communication with these businesses perhaps on a daily basis. Mayor Watts asked that Council receive updates on how construction was progressing and what the City was doing to improve business traffic. Council discussed different ideas to assist the East Hickory businesses with increased promotion and marketing efforts. City of Denton City Council Minutes October 14, 2014 Page 5 Assistant City Manager, Bryan Langley told the Council that under the City Manager’s approval authority staff could administratively handle implementing a marketing campaign if the Council desired. General consensus of the Council was for the City to do so. Receive a report, hold a discussion and give staff direction regarding a ID 14-0661 D. proposed convention center. Chuck Springer, Director of Fiscal and Municipal Services, stated the assumptions for projection were: Annual revenue growth of 3% in existing hotel occupancy taxes was from a revised estimate for FY 2014-15. Hotel occupancy taxes for convention center hotel was based on occupancy rate increases to 78% by year five of operation. TIRZ revenues – City participation for 30 years was at 100%. DISD participation at 50% of debt service tax rate for 20 years and County participation at 50% of full tax rate for 20 years. Sales tax revenue was based on an estimate of taxable sales in the hotel and restaurant. Developer debt service contribution was annual debt service less occupancy and sales taxes from hotel. TIRZ revenues and up to $100,000 was from City tourism and convention fund. All current tourism fund recipients, the CVB and CVB marketing of the convention center received 3% annual increase in funding from the FY 2014-15 baseline. The convention center asset replacement was funded at years 1-7 – $75,000 annually, Years 8-14 – $300,000 annually, and Years 15-30 – $370,000 annually. Every seven-year period the balance in the asset replacement account was spent for replacement and refreshment of the Convention Center. Jon Fortune, Assistant City Manager, reviewed proposed convention center expenditures and estimated budget. He stated that this was information the council had requested previously. The total for the project was $29,355,230; spent to date was $443,864. Fortune stated that he wanted to go over the bid alternates. There were 20 or 30 bid alternates that they had considered. There were two large items that depending on what we chose could have a large impact on the project. The biggest issue was the slab – slab on the grade was the low option. An engineered slab which would have some floating elements was the high option. The engineering report showed the slab on grade was possible on the site. Soils were fairly decent on the site. However, there was a potential for some movement for a building on that site. They took the engineering reports from the architects to a third party engineer who said both slabs would work. Fortune asked what level of risk the Council wanted to take. Staff preferred the engineered slab – cost was $980,000. The other issue was whether to go with a higher ply roof. Staff’s experience was that they would prefer higher ply on the roof.Fortune stated that he needed some feedback on Council’s preference on the slab and the roof. Fortune stated another item was the project schedule. It was a very compressed schedule – with a June 30 bid date, the prices were good for 180 days which ended December 30. He stated that staff could bring the construction contract to Council on November 11 and that would lock the prices. The contractor has expressed concern at holding prices at bid price until the end of the year. Fortune stated that an estimate to get civil drawings and move toward obtaining a building permit would cost the City about $72,000. City of Denton City Council Minutes October 14, 2014 Page 6 Fortune stated that one final thing they were going to have to submit designs in early November but would want to have a permit in hand before they came back in December to call for a bond election. Council Member Roden asked if the City had received any feedback from O’Reilly on what their intent was if the DISD or County did not participate in the TIRZ. Fortune stated O’Reilly had not shared his opinion on that. General consensus of Council was to go along with staff suggestions on the slab and the roof. The Council expressed concerns on moving forward with the project. It appeared that the project had lost a lot of community support. Discussion included changing the development agreement to a Chapter 380 agreement in order to save the deal. The Council also discussed saving the deal by shifting the financing risk to the developer through a new agreement where the convention center could be built and owned by O’Reilly with the City paying the company a lease equivalent to the taxes collected each month. Council agreed that it was time for the City to stop making concessions regarding the project. General consensus of the Council was for staff to stop working on the project until the City received an answer from O’Reilly on whether the project could go forward if the County and DISD did not participate in the TIRZ. Fortune told the Council that he had tried to keep his personal thoughts regarding this project to himself, but he wanted the Council to know he felt it was a good project for the City. General consensus of Council was to ask O’Reilly the question and the City needed an answer no later than October 29. Council told staff to not move forward with the project until the City had received some kind of commitment from O’Reilly and once they received that, come back to Council before they did anything else. ID 14-0613 E.Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting 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 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 Ryan requested an informal staff report on the training and education of first responders on the Ebola issue and to possibly schedule a presentation from the Denton County Health Department on the issue. City of Denton City Council Minutes October 14, 2014 Page 7 Mayor Watts requested a work session on the issue of trucks stopping on the square and blocking traffic at all hours of day. Council Member Ryan stated that the Council had passed the no parking on Oakland on the section from Oak to Hickory and there was a problem with people going the wrong way. There was a one way sign on top of the stop sign at Oak but no other signage. He stated that the signage was not very good. With no further business, the meeting was adjourned at 9:55 p.m. ____________________________________ CHRIS WATTS MAYOR CITY OF DENTON, TEXAS ____________________________________ JANE RICHARDSON ASSISTANT CITY SECRETARY CITY OF DENTON, TEXAS