[A. Receive a report, hold a discussion, and give staff direction regarding Audit Project 017 - Meter Reading and Billing: Electric and Water Utilities Follow-Up Review. [Estimated Presentation/Discussion Time: 15 minutes]]

METER READING AND BILLING.

HELLO MAYOR AND COUNCIL, I'M MADISON RORSCHACH DENTON, CITY AUDITOR.

I'M GOING TO PRESENT THE FINDINGS FROM THIS FOLLOW UP AUDIT.

SO AS A REMINDER, AUDIT FOLLOW UP REVIEWS ARE INTENDED TO PROVIDE INFORMATION ON WHAT CHANGES HAVE BEEN MADE IN RESPONSE TO AN ISSUED AUDIT.

THIS REVIEW WAS BASED ON THE RECOMMENDATIONS AND MANAGEMENT RESPONSES ORIGINALLY COMPILED IN THE AUDIT OF METER READING AND BILLING ELECTRIC AND WATER UTILITIES, WHICH WAS ORIGINALLY ISSUED IN JANUARY OF 2021.

THE AUDIT OF METER READING AND BILLING EVALUATED THE EFFECTIVENESS OF THE CITY'S ELECTRIC AND WATER METER MAINTENANCE, ACCURACY TESTING, READING AND BILLING PROCESSES.

THESE PROCESSES ARE CRITICAL TO ENSURING THAT THE CITY'S ELECTRIC AND WATER UTILITY CUSTOMERS ARE CHARGED EQUITABLY, EQUITABLY, AND TO CONTINUE INVESTMENT IN NEEDED UTILITY INFRASTRUCTURE. THIS AUDIT FOLLOW UP FOUND.

SOME IMPROVEMENTS HAVE BEEN MADE TO METER MAINTENANCE AND BILLING ADJUSTMENT DOCUMENTATION, AND THAT REINSTITUTE THE ELECTRIC METER ACCURACY TESTING PROGRAM HAS BEEN RE-INSTITUTED AND IS EFFECTIVE.

AND WATER METER ACCURACY TEST.

THE WATER METER ACCURACY TESTING HAS BEEN ON HOLD.

IT HAS RECENTLY BEEN BEGUN, SO BEGINNING WITH METER RELATED MAINTENANCE DOCUMENTATION, THE ORIGINAL AUDIT FOUND THAT ELECTRIC AND WATER METER RELATED MAINTENANCE WAS GENERALLY COMMUNICATED AND DOCUMENTED THROUGH WORK ORDERS IN THE CITY'S BILLING SYSTEM.

THE WATER METER WORK ORDERS WERE ALSO DOCUMENTED ON PAPER THROUGH IN THIS BILLING SYSTEM AND THROUGH A SEPARATE DATABASE.

WHILE THE ORIGINAL AUDIT FOUND THAT THE BILLING SYSTEM WORK ORDER PROCESS WAS GENERALLY EFFECTIVE, WE RECOMMENDED CLEAR GUIDANCE BE CREATED FOR WHO IS RESPONSIBLE FOR CREATING AND REVIEWING WORK ORDERS, AS WELL AS WHAT INFORMATION SHOULD BE INCLUDED ABOUT THE WORK COMPLETED.

SINCE THE ORIGINAL AUDIT, THE CUSTOMER SERVICE DIVISION HAS IMPLEMENTED A STANDARD OPERATING PROCEDURE THAT CLARIFIES WORK ORDER RESPONSIBILITIES BASED ON REVIEW OF A STATISTICAL SAMPLE OF BILLING SYSTEM WORK ORDERS.

ALL HAD ADEQUATE COMPLETION NOTES TO DETERMINE WHAT WORK WAS PERFORMED.

IN ADDITION, THE CITY BEGAN MAKING USE OF A NEW DATA FIELD IN THE BILLING SYSTEM TO BETTER TRACK WORK ORDER COMPLETION AND CLOSURE.

TIMELINESS. AS SUMMARIZED IN THE FIGURE ON THE SLIDE.

FINALLY, BASED ON DISCUSSION WITH WATER UTILITIES, THEY'VE STOPPED USING PAPER WORK ORDERS AND THE SEPARATE DATABASE.

HOWEVER, DURING 2021 AND 2022, THEY WERE DOCUMENTING WORK ORDERS IN THE BILLING SYSTEM AND THEIR OWN WORK ORDER SYSTEM, WHICH CONTINUED TO RESULT IN SOME METER ASSET DATA ISSUES. ACCORDING TO WATER MANAGEMENT, THEY PLAN TO ONLY USE THE BILLING SYSTEM TO RECORD METER RELATED WORK ORDERS GOING FORWARD, WHICH SHOULD HELP TO MITIGATE THESE ISSUES.

OUR DATA ISSUES. IN ADDITION, THEY'RE WORKING TO INTEGRATE THEIR DEPARTMENT WORK ORDER SYSTEM WITH THE BILLING SYSTEM TO IMPROVE DOCUMENTATION EFFECTIVENESS WHILE ENSURING ACCURACY. SECOND, THE ORIGINAL AUDIT FOUND THAT DENTON MUNICIPAL ELECTRIC HAD COMPLETED IMPLEMENTATION OF AN ADVANCED METERING INFRASTRUCTURE OR SYSTEM AROUND 2015, AND HAD DISCONTINUED ITS METER TEST PROGRAM AT THE TIME.

AT THAT TIME, SINCE MOST METERS WERE NEW AS OF THE ORIGINAL AUDIT, ABOUT 70% OF METERS WERE AT LEAST FIVE YEARS OLD, AND SO ELECTRIC METER INDUSTRY STANDARDS RECOMMENDED THAT ACCURACY TESTING CONTINUE BE PERFORMED.

SINCE THEN, THE ELECTRIC METERING DIVISION HAS REINSTITUTED ITS METER TEST PROGRAM, INCLUDING CREATING A STANDARD OPERATING PROCEDURE THAT REQUIRES 5% OF RESIDENTIAL AND COMMERCIAL SELF-CONTAINED METERS AND 10% OF INSTRUMENT RATED METERS TO BE TESTED ANNUALLY, AS WELL AS THE TOP 100 COMMERCIAL SERVICES TO BE TESTED EVERY TWO YEARS.

AS PART OF THIS PROCESS, ELECTRIC METERING PULLS A LIST OF THE METERS TO BE TESTED ANNUALLY AND COMPLETES THE NEEDED TESTING THROUGHOUT THE YEAR.

BASED ON REVIEW OF METER TESTING DATA, THE DIVISION GENERALLY SEEMS TO BE COMPLYING WITH THE METER TEST PROGRAM'S REQUIREMENTS.

IN ADDITION, THE DIVISION HAS BEGUN DOWNLOADING METER TEST RESULT DATA FROM ITS TEST BENCHES PERIODICALLY.

THIS IS TO HELP ENSURE TESTING DATA IS ADEQUATELY RETAINED, ESPECIALLY AFTER SOME TEST RESULTS WERE LOST JUST BEFORE THE ORIGINAL AUDIT DUE TO AN EQUIPMENT MALFUNCTION.

[00:05:01]

NEXT, THE ORIGINAL AUDIT FOUND THAT WATER UTILITIES HAD A GOAL TO TEST ALL OF THE CITY CITY'S LARGE WATER METERS ANNUALLY, AND HAD ESTABLISHED A SMALL WATER METER REPLACEMENT PROGRAM WHEREBY SMALL WATER METERS WOULD BE REPLACED EVERY 13 YEARS AND ONE OUT OF EVERY TEN REPLACED METERS WOULD BE TESTED FOR ACCURACY.

HOWEVER, WE FOUND THAT ABOUT ONLY ABOUT A THIRD OF THE CITY'S LARGE WATER METERS WERE TESTED ANNUALLY, AND THE UTILITY WAS BEHIND ON THE SMALL WATER METER REPLACEMENT PROGRAM.

IN ADDITION, NO CRITERIA HAD BEEN ESTABLISHED TO DETERMINE IF THE REPLACEMENT PROGRAM WAS EFFECTIVE.

BASED ON THOSE ACCURACY TESTING RESULTS, ACCORDING TO WATER UTILITIES MANAGEMENT, ALL WATER METER ACCURACY TESTING WAS HALTED DUE TO THE COVID 19 PANDEMIC.

DURING THAT TIME, NEW WATER METER TESTING EQUIPMENT WAS PROCURED AND HAS RECENTLY BEEN RECEIVED AND CALIBRATED, ALLOWING FOR ACCURACY TESTING TO RESUME.

HOWEVER, ONLY ABOUT 15% OF THE CITY'S LARGE WATER METERS WERE TESTED IN THE LAST SIX MONTHS, AS SHOWN ON THE TABLE ON THE SLIDE.

FURTHER WATER UTILITIES HAS ALSO HALTED THE SMALL WATER METER REPLACEMENT PROGRAM AS IT'S ABOUT TO BEGIN IMPLEMENTING AN ADVANCED METER METERING INFRASTRUCTURE SYSTEM FOR ITS METERS. AS PART OF THIS IMPLEMENTATION, MECHANICAL WATER METERS WILL BE REPLACED WITH ULTRASONIC METERS THAT DO NOT DEGRADE OVER TIME, POTENTIALLY ELIMINATING THE NEED TO TEST SMALL WATER METERS IN THE FUTURE.

IN ADDITION, THIS IMPLEMENTATION WILL HELP TO RESOLVE MISSING METER INSTALLATION DATE ISSUES SINCE MOST METERS WILL BE NEWLY INSTALLED.

LASTLY, CITY ELECTRIC AND WATER CUSTOMERS ARE BILLED BY THE CITY'S CUSTOMER SERVICE DIVISION AS PART OF THE ORIGINAL AUDIT.

WE FOUND THAT CUSTOMER SERVICE HAD AN EFFECTIVE PROCESS FOR ACCURATELY CALCULATING CUSTOMER BILLS.

IN ADDITION, BOTH CUSTOMER SERVICE AND DME CREATED AND RECEIVED ADEQUATE HIGH AND LOW USAGE EXCEPTION REPORTS TO IDENTIFY POTENTIAL INACCURATE METER READS BEFORE THEY WERE BILLED TO CUSTOMERS.

HOWEVER, WE FOUND THAT SOME BILLING ADJUSTMENTS DID NOT INCLUDE ADEQUATE EXPLANATION FOR WHY THE ADJUSTMENT WAS MADE.

SINCE THEN, THE CUSTOMER SERVICE DIVISION HAS IMPLEMENTED A NEW STANDARD OPERATING PROCEDURE THAT REQUIRES AT LEAST 100 BILLING ADJUSTMENTS TO BE REVIEWED EACH MONTH, BASED ON A REVIEW OF A STATISTICAL SAMPLE OF 41 BILLING ADJUSTMENTS MADE BETWEEN JULY AND SEPTEMBER OF 2023.

ALL HAD CLEARLY DOCUMENTED REASONS FOR THE ADJUSTMENT BEING MADE.

IN ADDITION, THE NEW MONTHLY BILLING ADJUSTMENT VERIFICATION PROCEDURE IS ADEQUATELY DOCUMENTED AND APPEARS TO BE WORKING EFFECTIVELY.

FINALLY, THE CITY HAS PROCURED A NEW CUSTOMER SERVICE PORTAL THAT WILL ALLOW CITY UTILITY CUSTOMERS TO REVIEW ELECTRIC AMI INTERVAL USAGE DATA.

CUSTOMER SERVICE IS IN THE PROCESS OF IMPLEMENTING THIS, AND IT SHOULD BE AVAILABLE FOR ALL ELECTRIC UTILITY CUSTOMER USAGE IN 2024.

SO IN SUMMARY, WE FOUND THAT 19 OR SORRY, NINE OF THE 14 ORIGINAL ORIGINALLY ISSUED RECOMMENDATIONS ARE NOW IMPLEMENTED WITH FIVE IN PROGRESS, AND THOSE ARE LIKELY TO BE ADDRESSED BY WATERS AMI IMPLEMENTATION.

SO BASED ON THAT INFORMATION, WE PLAN TO PERFORM A SECOND FOLLOW UP REVIEW IN 24 TO 36 MONTHS TO ASSESS THE IMPACTS OF WATER METER.

THE WATER METER IMPLEMENTATION.

SO QUESTIONS ON THIS FOLLOW UP.

THANK YOU. QUESTIONS FOR STAFF.

MAYOR PRO TEM THANK YOU, MR. MAYOR. SO WHAT IS IT? WHY WOULD I NOTICE ON THE TABLE THAT YOU PROVIDED THAT 42% OF THE SIX INCH METERS WERE WERE TESTED? BUT ALSO, IF I REMEMBER CORRECTLY, A SIMILAR PERCENTAGE WERE FOUND TO BE IN COMPLIANT, IF I REMEMBER THE REPORT CORRECTLY.

IS THAT AM I CORRECT ON THAT? ARE YOU TALKING ABOUT THE FAILURE RATE? YEAH, THE FAILURE RATE.

I'D HAVE TO GO BACK AND LOOK AT IT AT WHAT'S IN THE REPORT.

AND AND JUST TO PUT THAT INTO CONTEXT OF WHY I'M ASKING, WHAT IS IT? I GUESS I'M NOT. I'M NOT.

MAYBE SOMEONE COULD TELL ME GENERALLY WHAT KIND OF END USER CLIENT IS USING A SIX INCH METER, AND WHAT ARE THE IMPLICATIONS IF SOMETHING APPROACHING HALF OF THEM ARE, HAVE HAVE A FAILURE RATE? WHAT DOES THAT MEAN FOR THE END USER AND THE CITY? THE METER BEING INACCURATE HAS FINANCIAL IMPLICATIONS FOR THE CITY.

IT DEPENDS ON IF IT'S INACCURATE, POSITIVE, LIKE IF IT'S NOT CAPTURING ENOUGH WATER OR IF IT'S CAPTURING TOO MUCH WATER ESSENTIALLY, THAN WHAT'S RUNNING THROUGH IT, WHICH WAY THOSE FINANCIAL IMPLICATIONS GO.

BUT ESSENTIALLY WE COULD BE RECEIVING NOT ENOUGH REVENUE, OR THE CUSTOMER COULD BE PAYING TOO MUCH BASED ON THE METERS ACCURACY IF IT'S INACCURATE.

DOES THAT MAKE SENSE? DOES THAT ANSWER YOUR QUESTION? AND DO WE HAVE A FEEL FOR OR IS IT RANDOM? SO IT'S A LITTLE OF BOTH OR IS IT ARE WE TENDING TOWARDS UNDERCOUNTING OR OVER COUNTING.

I THINK IT TENDS TOWARDS UNDERCOUNTING OKAY.

JUST THE WAY THE MECHANICAL METERS WORK.

AND WHAT KIND OF END USER IS A SIX INCH METER AFFECTING THAT? I WOULD HAVE TO DEFER TO WATER ON.

BUT TYPICALLY COMMERCIAL METERS.

IT'S A COMMERCIAL METER.

OKAY. I MEAN, ONE WOULD ASSUME IT'S SIX INCHES, BUT YEAH.

[00:10:04]

GOOD AFTERNOON, STEPHEN GAY, DIRECTOR OF WATER UTILITIES.

MAYOR PRO TEM, YOU HAD A QUESTION.

SO MY MY QUESTION WAS GENERALLY, ARE WE? AND I THINK YOU ANSWERED THIS.

ARE WE UNDER-COUNTING AND OVERCOUNTING IN THE SIX INCH METERS? AND WHAT KIND OF END USER CLIENT TYPICALLY IS USING A SIX INCH METER COMMERCIAL? COMMERCIAL. AND WE WERE UNDERCOUNTING.

IS THAT WHAT YOU SAID IN GENERAL? THAT'S. YEAH. OKAY.

IN GENERAL, WHEN A METER IS INACCURATE, IT'S TYPICALLY LOWER THAN IT'S NOT COUNTING AS MUCH WATER AS IS FLOWING THROUGH IT.

ALL RIGHT. THANK YOU I APPRECIATE THAT QUESTIONS, MR. MAYOR. ALL RIGHT.

ANY OTHER QUESTIONS? COUNCILMAN BYRD.

WHAT? I MAY HAVE MISSED THIS BECAUSE I WAS KIND OF DOING SOMETHING ELSE, BUT EXPLAIN WHAT IS A LARGE WATER METER? WHERE IS THAT? WHERE DO WE SEE THOSE? TYPICALLY LARGE WATER METERS ARE FOR COMMERCIAL CUSTOMERS, AND THEY JUST ALLOW FOR A LITERALLY A LARGER FLOW OF WATER TO MOVE THROUGH THEM.

RIGHT. BECAUSE THEY THOSE CUSTOMERS USE MORE WATER THAN A SMALL LIKE A SMALL WATER METER WOULD BE WHAT'S ON YOUR HOUSE ESSENTIALLY.

AND SO IT'S USUALLY LIKE THREE QUARTERS INCH, I BELIEVE, OR THREE INCH OR.

YEAH, OR ONE INCH.

AND SO IT JUST IS A SMALLER AMOUNT OF WATER THAT YOU'RE USING THAN A LARGE COMMERCIAL CUSTOMER WOULD BE A LARGE COMMERCIAL CUSTOMER, LIKE THOSE BIG WAREHOUSES AND THINGS LIKE THAT, OR LIKE A HOSPITAL OR BOTH.

WHAT IS THAT? YEAH, IT DESCRIBE THAT.

BYRD LARGE WATER OR SMALL WATER METER IS CONSIDERED A 5/8 THREE QUARTER WHICH TYPICALLY RESIDENTIAL USE.

AND THEN WHEN YOU GET ABOVE AN INCH AND A HALF ABOVE THOSE ARE CONSIDERED LARGE DIAMETER METERS.

AND IT'S BASED OFF OF THE DEMAND, THE FLOW RATE THAT'S REQUIRED FOR THAT CONNECTION.

AND SO YOU HAVE A LARGER OPENING FOR THE WATER TO FLOW THROUGH, WHICH MEANS YOU CAN DELIVER MORE WATER.

SO IF YOU THINK ABOUT LIKE AN IRRIGATION LANDSCAPE OR LAND STRIP OR IN FRONT OF A COMMERCIAL BUILDING, IT MIGHT HAVE AN IRRIGATION METER THAT'S AN INCH AND A HALF, AND THAT'S TO ALLOW FOR THE ADEQUATE FLOWS FOR THAT CONNECTION.

OKAY. WELL, THANK YOU VERY MUCH.

I WAS JUST TRYING TO WRAP MY HEAD AROUND THREE INCH VERSUS SIX INCH.

THAT DOESN'T SEEM LIKE VERY MUCH TO ME, BUT THREE INCH AND TEN INCH SOUNDS LIKE A LOT.

YEAH. SO THAT'S REALLY ALL THAT I HAD.

THANK YOU. ANY OTHER QUESTIONS? OKAY. THANK YOU VERY MUCH.

TAKES US TO ITEM B.

[B. Receive a report, hold a discussion, and give staff direction regarding Audit Project 021 - Water System Operations: Rate Structure, Distribution, and Production Follow-Up Review. [Estimated Presentation/Discussion Time: 15 minutes]]

ID 231813.

RECEIVE. REPORT. HOLD. DISCUSSION.

GIVE STAFF DIRECTION REGARDING AUDIT PROJECT 021 WATER SYSTEMS. OPERATIONS. RATE STRUCTURE.

DISTRIBUTION AND PRODUCTION.

FOLLOW UP REVIEW.

ALL RIGHT. HI, MADISON. RORSCHACH DENTON SARA.

I'M HERE TO PRESENT THIS FOLLOW UP REVIEW AS WELL.

SO THIS REVIEW WAS BASED ON THE RECOMMENDATIONS AND MANAGEMENT RESPONSES ORIGINALLY COMPILED IN THE AUDITS OF WATER SYSTEM OPERATIONS, RATE STRUCTURE, DISTRIBUTION AND PRODUCTION, WHICH WERE ORIGINALLY ISSUED IN JUNE, JULY AND SEPTEMBER OF 2021.

THESE THREE REPORTS COVERED THE EFFECTIVENESS OF CONTROLS OVER THE CITY'S WATER DEMAND MANAGEMENT STRATEGIES, WATER DISTRIBUTION, INFRASTRUCTURE CONSTRUCTION AND MAINTENANCE, AND WATER PRODUCTION QUALITY AND CAPACITY.

THIS FOLLOW UP REVIEW FOUND THAT RATE STRUCTURES HAVE GENERALLY BEEN ADJUSTED, AND DOCUMENTATION OF WATER PLANT AND DISTRIBUTION LINE WORK ORDERS AND CHEMICAL DELIVERIES HAVE IMPROVED, THOUGH SOME TIMELINESS ISSUES STILL EXIST FOR DISTRIBUTION LINE WORK.

IN ADDITION, SMALL WATER LINE REPLACEMENT PROJECTS WILL NO LONGER BE PERFORMED IN-HOUSE, BEGINNING WITH WATER DEMAND MANAGEMENT STRATEGIES.

THE ORIGINAL AUDIT FOUND THAT THE CITY'S WATER RATE STRUCTURES WERE GENERALLY DESIGNED TO ENCOURAGE CUSTOMERS TO REDUCE WATER DEMAND.

HOWEVER, THEY WERE NOT ALWAYS IMPLEMENTED IN A WAY THAT ACTUALLY IMPACTED CUSTOMER BEHAVIOR.

SPECIFICALLY, RESIDENTIAL WATER RATES WERE DESIGNED TO INCREASE THE PRICE PER GALLON AS MORE WATER WAS USED, BUT MOST CUSTOMERS NEVER EXPERIENCED THESE PRICE SIGNALS BECAUSE THE FIRST INCREASE WAS TOO REQUIRED TOO MUCH WATER USAGE.

IN ADDITION, THIS TYPE OF BLOCKED RATE STRUCTURE EXISTED FOR COMMERCIAL IRRIGATION CUSTOMERS, BUT COMMERCIAL ENTITIES WERE NOT REQUIRED TO SEPARATELY METER THEIR IRRIGATION SYSTEMS. SINCE THEN, THE CITY HAS ADJUSTED THE RESIDENTIAL RATE STRUCTURE TO INCLUDE TWO NEW PRICE INCREASE POINTS BELOW THE PREVIOUS FIRST BLOCK ONE AROUND THE WINTER MONTH CUSTOMER USAGE AVERAGE, AND ONE AROUND THE ANNUAL MONTH CUSTOMER USAGE AVERAGE, WHICH THEORETICALLY ALLOWS CUSTOMERS TO EXPERIENCE PRICE SIGNALS IF THEY ARE USING WATER FOR DISCRETIONARY PURPOSES.

STILL, THE PRICE INCREASE BETWEEN THESE BLOCKS MAY NOT EFFECTIVELY IMPACT CUSTOMER BEHAVIOR BASED ON BEST RESEARCH, BEST PRACTICE RESEARCH, AND REGRESSION ANALYSIS.

THAT BEING SAID, THE CITY NOW REQUIRES ALL NEW COMMERCIAL WATER METER CUSTOMERS TO SEPARATELY IRRIGATE SEPARATELY METER THEIR IRRIGATION SYSTEMS. IN ADDITION, THE CITY IS IN THE PROCESS OF NEGOTIATING NEW AGREEMENTS WITH ITS WHOLESALE WATER CUSTOMERS, SOME OF WHICH HAD EXPIRED AS OF THE ORIGINAL AUDIT.

SECOND, THE ORIGINAL AUDIT FOUND THAT THE CITY DID NOT ALWAYS PROVIDE CUSTOMERS WITH TIMELY INFORMATION ABOUT THE CITY'S WATER RATE STRUCTURE AND WHY IT IS DESIGNED TO

[00:15:06]

DISCOURAGE WATER OR TO DISCOURAGE WATER USE OR DISCRETIONARY WATER USAGE.

IN ADDITION, THE CITY HAD LIMITED WATER DEMAND REDUCTION, HAD LIMITED WATER DEMAND REDUCTION INCENTIVES OR EDUCATION PROGRAMS. SINCE THEN, THE CITY'S ENVIRONMENTAL SERVICES DEPARTMENT HAS PRODUCED PERIODIC INFORMATION DISCOURAGING DISCRETIONARY WATER USAGE AND NEW DEMAND REDUCTION.

INCENTIVES AND EDUCATION PROGRAMS ARE BEING CONSIDERED BY WATER UTILITIES AS PART OF THE ONE WATER MASTER PLANNING PROCESS.

HOWEVER, WATER RATE STRUCTURE INFORMATION HAS NOT BEEN INCLUDED ON THIS HAS NOT BEEN ADDED TO CUSTOMER BILLS, ACCORDING TO THE STAFF.

THIS IS BECAUSE INCLUDING THIS INFORMATION ON THE CITY'S BILLS USING THE CURRENT BILLING SYSTEM MAKES THEM DIFFICULT TO READ.

AND WHILE FUNDING FOR A BILL REDESIGN WAS REQUESTED, IT WAS NOT APPROVED THROUGH THE BUDGET PROCESS.

ONTO WATER DISTRIBUTION.

THE ORIGINAL AUDIT FOUND THAT WATER UTILITIES CREWS OCCASIONALLY REPLACED SMALL WATER LINES AS PART OF THEIR CAPITAL IMPROVEMENT PROGRAM.

HOWEVER, SOME CRITICAL QUALITY CONTROL AND REGULATORY COMPLIANCE DOCUMENTATION OF THIS WORK WAS MISSING.

IN ADDITION, COSTS ASSOCIATED WITH THIS WORK COULD NOT ALWAYS BE VERIFIED AS ACCURATE, AND THE PROJECTS WERE OFTEN IN SERVICE FOR OVER A YEAR BEFORE BEING CAPITALIZED AS A CITY ASSET. SINCE THE ORIGINAL AUDIT, WATER UTILITIES HAS PERFORMED FIVE SMALL WATER LINE REPLACEMENT PROJECTS AS SHOWN ON THE SLIDE.

BASED ON OUR REVIEW OF THESE PROJECTS, DOCUMENTATION OF CRITICAL QUALITY CONTROL AND REGULATORY COMPLIANCE HAS IMPROVED, INCLUDING REQUIRING RIGHT OF WAY PERMITS.

HOWEVER, A STANDARD PROCESS FOR DOCUMENTING THE FINAL PROJECT INSPECTION HAS NOT BEEN DEVELOPED.

IN ADDITION, PROCESSES TO VERIFY THE ACCURACY OF MATERIAL AND LABOR COSTS RECORDED FOR SMALL WATER LINE REPLACEMENT PROJECTS HAVE NOT BEEN DEVELOPED.

THE FINANCE DEPARTMENT HAS BEEN WORKING TO UPDATE THE CITY'S CAPITALIZATION POLICY, AND IS PLANNING TO BEGIN TRYING TO STREAMLINE AND CLARIFY THE PROJECT CLOSURE AND CAPITALIZATION PROCESS WITH ALL DEPARTMENTS IN THE UPCOMING YEAR.

WATER UTILITIES HAS MADE THE DECISION TO STOP PERFORMING SMALL WATER LINE REPLACEMENT PROJECTS IN-HOUSE, AND INSTEAD HAVE THEM BE PERFORMED BY CONSTRUCTION CONTRACTORS AND MANAGED BY THE CITY'S CAPITAL PROJECTS DEPARTMENT.

FOR THAT REASON, THE RISKS ASSOCIATED WITH DOCUMENT RETENTION, CONSTRUCTION COST RECORDS, PROJECT CLOSURE, CAPITALIZATION, AND RIGHT OF WAY RESTORATION DELAYS HAVE BEEN TRANSFERRED. TRANSFERRED.

NEXT. FOR BOTH WATER DISTRIBUTION LINES AND WATER PRODUCTION PLANTS, THE ORIGINAL AUDIT FOUND THAT GUIDANCE ON WHAT INFORMATION SHOULD BE INCLUDED IN REPAIR AND MAINTENANCE WORK ORDERS, AND HOW QUICKLY THESE WORK ORDERS SHOULD BE COMPLETED, WAS NOT ALWAYS CLEAR.

SINCE THE ORIGINAL AUDIT, THE WATER DISTRIBUTION AND WATER PRODUCTION DIVISIONS HAVE BOTH DEVELOPED STANDARD OPERATING PROCEDURES TO HELP GUIDE STAFF, AND THESE WERE IMPLEMENTED IN OCTOBER 2023 AND DECEMBER 2021, RESPECTIVELY.

BASED ON A REVIEW OF A STATISTICAL SAMPLE OF WATER LINE LEAK REPAIR WORK ORDERS, THE DEPARTMENT'S RECENT GOAL TO MOBILIZE CREWS TO REPAIR A LEAK WITHIN 24 HOURS AND RESOLVE THE LEAK WITHIN 48 HOURS WAS NOT BEING MET.

HISTORICALLY, SPECIFICALLY, ALL ABOUT 91% OF LEAKS WERE RESOLVED.

IN THE 48 HOUR WINDOW.

ONLY ABOUT 57% WERE MOBILIZED WITHIN 24 HOURS.

THAT BEING SAID, WE FOUND THAT WORK ORDERS ARE NOW BEING PRIORITIZED AND THAT THE PRIORITY GENERALLY CORRELATES WITH HOW QUICKLY A LEAK REPAIR IS MOBILIZED.

IN ADDITION, WATER DISTRIBUTION LINE WORK ORDERS GENERALLY INCLUDE MORE REQUIRED INFORMATION ELEMENTS SUCH AS RIGHT OF WAY, PERMIT NUMBER, SITE PICTURES, AND LINE LOCATE NUMBERS THAN IN THE PREVIOUS AUDIT.

THOUGH IMPROVEMENT COULD STILL BE MADE FOR WATER PLANT MAINTENANCE.

ALL CORRECT. ALL CORRECTIVE MAINTENANCE WORK ORDERS RECEIVE A HIGH PRICE, RECEIVED A HIGH PRIORITY, AND WORK BEGAN WITHIN A DAY OF THE ISSUE BEING REPORTED.

IN ADDITION, 70% OF PREVENTATIVE MAINTENANCE WORK ORDERS WERE COMPLETED WITHIN A WEEK OF BEING SCHEDULED AND NO HIGH PRIORITY WORK ORDER.

PREVENTATIVE MAINTENANCE WORK ORDER TOOK MORE THAN A MONTH TO COMPLETE.

IN ADDITION, ALL WORK ORDERS REVIEWED HAD ADEQUATE INFORMATION DOCUMENTED TO DETERMINE WHAT WORK HAD BEEN PERFORMED.

FINALLY, THE ORIGINAL AUDIT FOUND THAT CHEMICALS DELIVERED TO WATER TREATMENT PLANTS WERE NOT BEING RECONCILED TO DETERMINE IF THE AMOUNT PAID FOR MATCHED WHAT WAS ACTUALLY DELIVERED. IN ADDITION, IT WAS DIFFICULT TO FIND DELIVERY DOCUMENTATION THAT IT WASN'T AS IT WAS NOT CENTRALLY LOCATED.

SINCE THE ORIGINAL AUDIT, THE WATER PRODUCTION DIVISION HAS DEVELOPED A PROCESS TO COMPARE THE AMOUNT DELIVERED PER THE DELIVERY DRIVERS INFORMATION TO THE AMOUNT DELIVERED PER THE CITY'S CHEMICAL LEVEL MONITORING SYSTEMS. THIS PROCESS GENERALLY SEEMS TO BE EFFECTIVE, THOUGH ACCEPTED ACCEPTABLE DELIVERY VARIANCES HAVE NOT YET BEEN ESTABLISHED.

BASED ON OUR ANALYSIS OF THE DIFFERENCES BETWEEN THE QUANTITY DELIVERED PER THE VENDOR TO THE QUANTITY PER THE CITY SYSTEM, THERE GENERALLY DOES NOT SEEM TO BE A NEGATIVE FINANCIAL IMPACT TO THE CITY IN AGGREGATE.

THAT BEING SAID, SOME SPECIFIC DIFFERENCE LEVELS MAY WARRANT INVESTIGATION BASED ON THE ESTIMATED COST IMPACTS.

IN ADDITION, WE WERE ABLE TO LOCATE ALL DELIVERY DOCUMENTATION BASED ON A STATISTICAL SAMPLE.

IN SUMMARY, WE FOUND THAT 18 OF THE 25 ORIGINALLY ISSUED RECOMMENDATIONS ARE NOW IMPLEMENTED, WITH SIX IN PROGRESS.

[00:20:06]

THESE SHOULD BE ADDRESSED THROUGH WHOLESALE WATER CONTRACT NEGOTIATIONS, AS WELL AS ADDITIONAL TIME TO IMPLEMENT NEWLY DEVELOPED OR UPDATED POLICIES AND STANDARD OPERATING PROCEDURES. FINALLY, WE DID FIND THAT ONE RECOMMENDATION HAD NOT BEEN IMPLEMENTED, AS SHOWN ON THE SLIDE BASED ON DISCUSSION WITH CUSTOMER SERVICE DIVISION MANAGEMENT FUNDS TO COMPLETE THIS RECOMMENDATION WERE REQUESTED BUT NOT APPROVED AS PART OF THE MOST RECENT BUDGET PROCESS.

SO THIS RECOMMENDATION HAS NOT BEEN IMPLEMENTED DUE TO RESOURCE CONSTRAINTS.

WE PLAN TO PERFORM A SECOND FOLLOW UP REVIEW IN THE NEXT 24 TO 36 MONTHS, FOCUSED ON THE FIVE IN PROGRESS RECOMMENDATIONS, AND VERIFYING THAT THE FIVE RECOMMENDATIONS THAT HAVE BEEN ADDRESSED OR RESOLVED THROUGH AN ALTERNATIVE SOLUTION HAVE BEEN ADDRESSED FOR WATER UTILITIES PLANS.

SO QUESTIONS ABOUT THIS FOLLOW UP REVIEW.

OKAY. THANK YOU.

QUESTIONS FOR STAFF, COUNCILMEMBER MELTZER AND MAYOR PRO TEM.

YEAH, I DON'T ACTUALLY RECALL.

TAKE YOUR WORD FOR IT, BUT DON'T ACTUALLY RECALL BEING ASKED TO PROVE MONEY TO REDESIGN THE BILL TO REFLECT THE BLOCK SPENDING.

BUT EVEN IN THE ABSENCE OF THAT.

JOINING US FROM DOING SOMETHING, YOU KNOW, IN A KIND OF NEWS FEATURE WAY IN THE LITTLE NEWSLETTER THAT COMES WITH IT SAYING, YOU KNOW, THE LESS YOU USE, THE LESS YOU PAY PER GALLON? NO, NOT AT ALL.

AND THAT'S SOMETHING WE CAN WORK ON.

MAYOR PRO TEM. THANK YOU.

YEAH, I'LL PICK RIGHT FROM THERE.

I REALLY APPRECIATE THE REGRESSION ANALYSIS AND APPENDIX A, AND I APPRECIATE THE COMMENT WHERE YOU SHOWED THAT THE PERHAPS DUBIOUS STATISTICAL CORRELATION WITH THE KIND OF HIGH P VALUES, BUT THE, THE, THE NEGATIVE CORRELATION BETWEEN BLOCKS, SO THAT IT IMPLIES THERE THERE MIGHT BE A SIGNAL THERE. BUT THE REAL QUESTION IS, WOULD WE EXPECT THERE TO BE A SIGNAL FROM THE DIFFERENT RATE STRUCTURES IF WE DIDN'T HELP PEOPLE IN THEIR BILLING THAT WE DIDN'T HAVE DIFFERENT RATE STRUCTURES? IT'S SORT OF LIKE, I THINK YOU GOT TO MARKET WHEN YOU'RE CHANGING THE RATE STRUCTURES IN ORDER TO EXPECT IT TO HAVE AN IMPACT, RIGHT? I THINK AND I THINK WHEN YOU LOOK AT THE PRICE SIGNALS, BEST PRACTICES RECOMMEND THEY BE AT LEAST 25%.

SO PART OF IT IS THAT THE CHANGE IN PRICE FOR BLOCKS IS TOO LOW.

BUT THAT'S ALSO TRUE IF PEOPLE DON'T UNDERSTAND WHAT THE RATE BLOCKED RATE RATE.

SORRY, BLOCKED RATE STRUCTURE IS MEANT TO DO.

THEY DON'T. THEY MIGHT NECESSARILY NOT UNDERSTAND WHY THE PRICE SIGNAL IS HAPPENING.

RIGHT. AND I REMEMBER COUNCILOR DAVIS WAS THE ONE LEADING ON THE KIND OF SMALLER AND RATE STRUCTURES ON THAT ONE AND CONVINCED THE REST OF US. AND I THINK IF WE IF WE WANT TO GET THAT SORT OF WINTER, SUMMER BREAK EVEN BLOCK RATE TO TO SEE IF IT'S GOING TO HAVE AN EFFECT, WE'VE GOT TO TELL PEOPLE WE'RE DOING IT.

SO I WOULD ENCOURAGE US TO TO MODIFY THE BILLING STRUCTURE.

I, I DON'T KNOW, I DON'T RECALL THOSE PARTICULAR DETAILS ABOUT IT BEING ASKED OR NOT ASKED.

I DON'T REMEMBER ANYTHING ABOUT THAT.

BUT WE CAN'T EXPECT IT TO HAVE AN IMPACT IF WE IF WE DON'T TELL PEOPLE THAT WE'RE DOING IT AND SHOW PEOPLE WHERE THE NUMBERS FALL ON THEIR BLOCK RATES.

THE OTHER QUESTION I HAVE IS, YEAH, I UNDERSTAND THAT WE'RE CHANGING THE IN HOUSE SMALL PROJECTS TO TO A CAPITAL PROJECTS OVERSIGHT INSTEAD OF DOING IT IN HOUSE.

BUT DID WE RETAIN THE INFORMATION BECAUSE YOU SAID IN THE REPORT THAT WE DIDN'T HAVE WE DIDN'T IMPLEMENT THE DOCUMENTATION OF OF THE VARIOUS EVENTS AND, AND THINGS, AND THAT WE DIDN'T HAVE TO DO THAT BECAUSE WE WERE WE WERE SWITCHING WHO WAS IN CHARGE, WHO WAS IN CHARGE OF OVERSIGHT, BUT DO WE HAVE THE BASE INFORMATION? SO THAT GROUP, THE CAPITAL PROJECTS, WILL RETROACTIVELY BE ABLE TO GO BACK TO THE PREVIOUS YEARS AND AND LOOK HOW THEY DID IF IT HAD BEEN INCORPORATED. SO I THINK AS FAR AS THE INFORMATION CAPITAL PROJECTS NEEDS TO KNOW, THEY HAVE THAT LIKE THE CRITICAL QUALITY CONTROL STUFF IN GENERAL.

SO YES, IT'S JUST THAT SOME OF THE ESSENTIALLY COST ACCOUNTING FOR LABOR HOURS AND MATERIALS IS NOT QUITE IT DOESN'T QUITE MATCH UP BETWEEN THERE'S A WORK ORDER SYSTEM AND THE CITY'S COST SYSTEM, AND IT'S NOT QUITE MATCHING UP BETWEEN WHAT THEY THEY USE FOR MATERIALS OR WHAT THE LABOR HOURS THEY SAID WERE THERE INTO WHAT'S ACTUALLY IN THE FINANCIAL SYSTEM.

SO THAT ESSENTIALLY JUST IMPACTS WHERE SOME OF OUR COSTS ARE CAPITALIZED ON OUR FINANCIAL RECORDS.

SO WE HAVE ALL THE INFORMATION OF WHAT WAS USED.

IT'S JUST IS IT ACCOUNTED FOR? THE RIGHT PROJECT IS A LITTLE BIT GRAY.

SO IN IN FUTURE IN CAPITAL PROJECTS IS REVIEWING THESE MATERIALS AND GOING BACK THROUGH PAST DATA.

[00:25:01]

THEY WILL HAVE SUFFICIENT PAST DATA TO TO TO PROJECT FORWARD AND NOT START FROM SCRATCH.

YES. OKAY. THAT'S THAT'S ALL I WANTED TO KNOW.

THANK YOU. THANK YOU, MR. MAYOR. ANY OTHER QUESTIONS? COUNCILMAN BYRD. ON SLIDE THREE, IT SAYS WHOLESALE WATER CONTRACTS BEING NEGOTIATED.

WHAT IS WHOLESALE WATER CONTRACTS AGAIN? SO WE SELL RAW WATER OR SORRY WATER THAT WE HAVE MADE DRINKABLE TO OTHER CITIES, I CAN'T REMEMBER I BELIEVE LIKE SANGER OR OTHER CITIES LIKE THAT.

AND SO THEY DON'T HAVE TO MAKE THEIR OWN.

THEY DON'T HAVE TO TREAT THEIR OWN WATER.

WE SELL IT TO THEM. THOSE ARE OUR WHOLESALE WATER CUSTOMERS.

OKAY. ALL RIGHT. THANK YOU.

ANY OTHER QUESTIONS? COUNCILMAN ONE. I GUESS.

IS THERE ANY THOUGHT IN THE FUTURE? BECAUSE WHEN YOU SAY RESIDENTIAL RATE STRUCTURES, I KNOW MANY MULTIFAMILY AFFORDABLE HOUSING PROJECTS PAY THE WATER.

THEY MEET WATER.

MOST OF THEM ARE METERED.

BUT THEY'RE JUST I MEAN, I GUESS THERE'S A SINGLE FAMILY EQUIVALENT THAT IS APPLIED TO THAT AS FAR AS, I MEAN, FOR FOR ME, I'M GOING TO USE ONLY A CERTAIN AMOUNT, BUT A TEN UNIT APARTMENT BUILDING, IF IT'S ALL THEY'RE GOING TO USE TEN OF TEN INDIVIDUAL UNITS.

AND THEN I SEE HERE WHOLESALE WATER CONTRACTS BEING SEPARATE COMMERCIAL IRRIGATION METERS ARE NOW REQUIRED.

I'M JUST GOING TO SOUND LIKE A BROKEN RECORD.

YOU KNOW, WE TALK ABOUT WATER CONSERVATION.

WE TALK ABOUT WATER USAGE.

WE'RE TALKING ABOUT RAISING RATES ON PEOPLE WHO USE A LOT OF WATER.

BUT I STILL THINK OUR CODES REQUIRE IRRIGATION SYSTEMS FOR NEW PROJECTS.

AND THAT JUST SEEMS LIKE A DISCONNECT TO ME.

THAT'S NOT YOUR DEPARTMENT.

I JUST SIMPLY SAY THAT FOR FUTURE DISCUSSION.

THANK YOU VERY MUCH. OKAY.

ANY OTHER QUESTIONS? ANYONE ELSE BEFORE WE GO BACK AROUND COUNCILWOMAN MELTZER.

YEAH, THAT'S A REALLY GREAT POINT.

I JUST WANT TO COMMENT THAT ON THE WAY HERE, I SAW THE BANNER OVER LOCUST STREET REGARDING NOT USING BAGS AND RECYCLING, WHICH IS LIKE A SIMPLE POINT, BUT POINT OF ORDER.

THE WARRANT AUDITS, I UNDERSTAND.

OKAY, SO YEAH. NO, NO, TRUST ME, I'M COMING RIGHT BACK.

RIGHT BACK THERE. AND THAT IS AN EXAMPLE OF OTHER COMMUNICATION TACTICS THE CITY CAN USE TO GET ACROSS.

IF YOU HAVE A SIMPLE MESSAGE, IF YOU REALLY WANT PEOPLE TO USE LESS WATER, YOU KNOW, YOU KNOW THAT THERE'S THERE ARE LOTS OF OTHER TACTICS AVAILABLE.

THAT WAS A GOOD EXAMPLE OF ONE.

OKAY. ANY OTHER QUESTIONS FOR STAFF? SEEING NONE. THANK YOU.

THANK YOU. THAT TAKES US TO ITEM C ID 232124 RECEIVE REPORT HOLDING, HOLD A DISCUSSION AND GIVE STAFF DIRECTION REGARDING THE

[C. Receive a report, hold a discussion, and give direction regarding the proposed creation of a Tourism Public Improvement District in Denton. [Estimated Presentation/Discussion Time: 30 minutes]]

PROPOSED CREATION OF TOURISM, PUBLIC IMPROVEMENT DISTRICT AND DENTON.

ALL RIGHT. GOOD AFTERNOON, MAYOR AND COUNCIL.

I'M CHRISTINE TAYLOR, ASSISTANT CITY MANAGER.

WE'RE GOING TO TALK TODAY ABOUT THE PROPOSED CREATION OF A TOURISM PUBLIC IMPROVEMENT DISTRICT.

I'M GOING TO RUN THROUGH THE PRESENTATION TALKING ABOUT THE BACKGROUND, THE PARAMETERS OF THE PROPOSED DISTRICT.

BUT WE HAVE SEVERAL GUESTS HERE TODAY WHO CAN ANSWER ADDITIONAL QUESTIONS.

WE HAVE MIKE PESTANA FROM DISCOVER, DENTON, SCOTT JOSLIN FROM THE TEXAS HOTEL AND LODGING ASSOCIATION, AND THEN TWO OF OUR LOCAL HOTELIERS, EMILY WRIGHT AND JAY.

I THINK I JUST MET HIM.

SO DARCY, WHO WILL BE ABLE TO ANSWER ANY QUESTIONS WHEN WE GET TO THE END OF THE PRESENTATION.

SO WE'RE GOING TO RUN THROUGH THE BACKGROUND.

WHAT IS A PID? WHAT'S KIND OF BEEN OUR HISTORY ON HOW WE'VE ENGAGED IN POTENTIALLY EXPLORING CREATING ONE THE SERVICE PLAN PARAMETERS, WHICH WE'LL TALK ABOUT THE TERM, WHAT TYPES OF THINGS THE MONEY WILL BE SPENT ON, AND THEN WHAT DOES THAT PROCESS LOOK LIKE TO ACTUALLY ESTABLISH A PID? SO A TOURISM PUBLIC IMPROVEMENT DISTRICT IS JUST AN ADDITIONAL TOOL THAT WILL CREATE FUNDING FOR THE CITY TO PROMOTE AND DRAW CONVENTION GROUP BUSINESS TO THE CITY.

THERE ARE ALREADY SEVEN EXISTING CITIES IN THE STATE THAT HAVE CREATED THIS DISTRICT THAT WE'VE LISTED ON THE SLIDE SAN ANTONIO, DALLAS, ARLINGTON, FORT WORTH, CORPUS CHRISTI, WACO, AND FRISCO.

SO THIS PROCESS BEGAN BACK IN 2018.

THE LOCAL HOTELIERS, THROUGH DISCOVER DENTON, WHICH IS OUR CVB, BEGAN HAVING DISCUSSIONS WITH THE CITY ON WHAT WOULD IT LOOK LIKE? IS IT POSSIBLE TO ESTABLISH A PID? IN 2018, THE HOTELIERS HAD TO HAVE.

WE HAD TO BE AUTHORIZED THROUGH THE TEXAS STATE LEGISLATURE TO BE ABLE TO CREATE THE DISTRICT.

SO A WORK SESSION WAS HELD IN 2018 TALKING ABOUT THE POSSIBILITY OF IT.

AND THEN COUNCIL DID PROVIDE CONSENSUS AT THAT TIME TO PROCEED AND INCLUDE THE REQUEST FOR THE PID AS PART OF THE CITY'S 2019 LEGISLATIVE PROGRAM.

[00:30:09]

DURING THAT 2019 LEGISLATIVE SESSION, IT DID.

THE OUTCOME WAS AUTHORITY WAS PROVIDED FOR ALL TEXAS COMMUNITIES TO BE ABLE TO ESTABLISH ONE IF IF IT WAS, THERE WAS A PETITION REQUESTED TO ESTABLISH IT.

SO WE DIDN'T NEED TO INDIVIDUALLY GET THAT APPROVAL DURING THAT YEAR.

AFTER THAT PERIOD, THERE WAS SOME DOWNTIME THROUGH COVID AND TURNOVER AND DISCOVER AND WITH THE CITY.

AND SO IN 2023, WE BEGAN HAVING DISCUSSIONS AGAIN WITH DISCOVER DENTON ON WHAT WOULD THAT LOOK LIKE? THE HOTELIERS WERE READY TO TALK ABOUT PROPOSING THE CREATION OF THIS DISTRICT.

SO THE PROGRAM PARAMETERS.

HERE'S WHAT IT WILL LOOK LIKE. THERE ARE 27 HOTELS IN DENTON.

17 OF THOSE HOTELS HAVE 75 ROOMS. SO THE PROPOSED PARAMETERS ARE THAT ANY OF THE HOTELS THAT HAVE 75 ROOMS OR MORE WOULD ASSESS A 2% FEE ON EACH TAXABLE HOTEL ROOM.

ANY NEW HOTELS AFTER IF THE DISTRICT WAS APPROVED, ANY NEW HOTELS THAT COME AND BUILD IN CITY WOULD AUTOMATICALLY BE ADDED TO THE DISTRICT, AND THE PROPOSED TIME.

TIME PERIOD IS A TEN YEAR TIME PERIOD AND BASED OFF OF HOTEL OCCUPANCY TAX COLLECTED FROM THE 17 HOTELS, WE ARE ESTIMATING THAT IT WILL GENERATE $12.6 MILLION DURING THE TEN YEAR PERIOD.

SO THE OVERSIGHT FOR THIS DISTRICT WOULD LOOK LIKE A BOARD WOULD BE CREATED AND COMPOSED OF LOCAL HOTELIERS WITHIN THE DISTRICT.

DISCOVER DENTON, WHICH IS OUR CVB, WOULD SERVE AS THE ADMINISTRATIVE ENTITY RESPONSIBLE FOR IMPLEMENTING THE DECISIONS AND RECOMMENDATIONS OF THE BOARD, AND WE WOULD ASSESS AND COLLECT THE FEE UNDER THE SAME SCHEDULE AND PROCESS THAT'S IN PLACE NOW FOR HOTEL OCCUPANCY TAX COLLECTIONS.

WHAT THAT LOOKS LIKE RIGHT NOW IS HOTELS DO QUARTERLY REPORTING AND REMITTANCE TO THE CITY.

AND SO THAT WOULD MEAN WE'D MAINTAIN THE SAME SCHEDULE.

AND AN ANNUAL BUDGET AND SERVICE PLAN WOULD BE IMPLEMENTED BY DISCOVER, THEN UNDER THE OVERSIGHT OF THE BOARD.

THIS SLIDE IS JUST A BREAKDOWN OF WHAT THOSE 17 HOTELS LOOK LIKE, AND THEN THE NUMBER OF ROOMS THAT EACH OF THEM HAVE.

WHY IS IT NECESSARY? SO THIS IS JUST A CHART THAT SHOWS OF SEVERAL OF THE AREA CAN VISIT CONVENTION AND VISITOR BUREAUS, WHAT THEIR BUDGETS LOOK LIKE.

THIS IS HOTEL OCCUPANCY TAX FUNDS AND WHERE WE KIND OF FALL.

SO THIS NUMBER SHOWS 1.58 MILLION IS WHAT DENTON WHAT THE CVB CURRENTLY RECEIVES IN HOT FUNDS.

SO OF OUR TOTAL HOT FUNDS BUDGET, THE CONVENTION AND VISITORS BUREAU IS RECEIVING ROUGHLY 38.5% OF THAT BUDGET TO MARKET AND SELL AND INCENTIVIZE PEOPLE COMING TO STAY AND STAY IN DENTON.

SO AS YOU CAN SEE, WE'RE WE'RE KIND OF IN THE MIDDLE.

AND TO BE MORE COMPETITIVE IN A VERY COMPETITIVE MARKET IS WHY THEY BEGAN EXPLORING THE NEED FOR THIS ADDITIONAL ASSESSMENT.

THE PROPOSED SERVICE PLAN.

WHAT WE TALKED ABOUT WITH THAT $12.6 MILLION IN THE TEN YEAR SERVICE PERIOD HAS A COUPLE OF DIFFERENT CATEGORIES IN WHICH THEY CAN SPEND THE FUNDS ON, WITH THAT GOAL OF INCREASING TARGETED SALES AND MARKETING IN AN EFFORT TO GENERATE ADDITIONAL DEMAND FOR HOTEL ACTIVITY, THEY'D BE LOOKING AT ROUGHLY 43% OF THE BUDGET TO GO TOWARDS MARKETING, ADVERTISING AND PROMOTING SALES, WHICH INCLUDES ANY TYPE OF RECRUITMENT TO BRING THE CONFERENCES HERE.

AND WHAT TYPE OF INCENTIVES COULD THEY OFFER FOR THOSE CONVENTIONS AND HOTEL ACTIVITY WITHIN THE CITY? ADMINISTRATIVE OVERSIGHT, A PORTION OF THAT WOULD BE ABLE TO STAY WITH THE CITY AND ALSO THE CVB FOR ANY TYPE OF WHAT DOES IT COST US TO CREATE THE FEE? WHAT ARE THE BANK FEES, AUDITING FEES? SO ANY OF THAT ADMINISTRATIVE PORTION OF OF MAINTAINING THAT FEE AND THEN 6% OVER THAT TEN YEAR PERIOD WOULD GO TO ADDITIONAL TOURISM RESEARCH.

IN THE BACKUP, THERE IS THE ACTUAL DETAILED PROPOSED PLAN, WHICH TALKS MORE TO EACH OF THESE ACTIVITIES AND WHAT TYPE OF EXAMPLES THAT THEY THINK THEY WOULD BE UTILIZING THE FUNDING FOR.

SO TO ESTABLISH A PETITION, STATE LAW REQUIRES THAT THE PETITION SIGNATURES REQUESTING THE CREATION OF THE DISTRICT COME FROM MORE THAN 60% OF THE APPRAISED VALUE OF THE DISTRICT PROPERTIES, AND THEN ONE OF THE TWO FOLLOWING CRITERIA IS THEN 60% OF THE SURFACE AREA HOTELS WITHIN THE DISTRICT, OR 60% OF THE NUMBER OF THE HOTELS WITHIN THE DISTRICT, SO THAT THAT RESPONSIBILITY FALLS ON THE GROUP.

WHO IS WANTING TO SUBMIT THE PETITION FOR OBTAINING THE SIGNATURES TO MEET THOSE TWO REQUIREMENTS? WE OUTLINED WHAT SOME OF THOSE STEPS LOOK LIKE AND DISCOVER DENTON IN THE LOCAL HOTELIERS HAVE ALREADY MADE SIGNIFICANT PROGRESS.

THEY STARTED THAT INDUSTRY AND CONSENSUS BUILDING.

THEY THEY CAME UP WITH THE TEN YEAR SERVICE PLAN AND WORKED ON THE DRAFT PETITION.

AND THEN WE INDICATED WE'D LIKE TO HOLD THE WORK SESSION AHEAD OF THEM, SUBMITTING THE PETITION TO GET ANY INITIAL FEEDBACK, HOW COUNCIL IS FEELING ABOUT ESTABLISHING IT, AND

[00:35:04]

DO WE HAVE ANY FEEDBACK OR COMMENTS ON THE SERVICE PLAN PRIOR TO THEM ACTUALLY SUBMITTING IT? SO ONCE THE PETITION IS SUBMITTED, THEN THE CITY WOULD TAKE RESPONSIBILITY AND BECOMES RESPONSIBLE FOR HOLDING THE PUBLIC HEARINGS, WHICH ARE A REQUIREMENT FOR THE CREATION OF THE DISTRICT ASSESSMENT OF THE RATE AND THE ROLE.

AND THEN WE'D GO INTO AN IMPLEMENTATION PROCESS.

SO LOOKING FOR ANY QUESTIONS ON HOW ANY QUESTIONS ON THE PROPOSAL OF THE FEE OF THE SERVICE AREA AND ON THE SERVICE PLAN, I CAN ANSWER ANY ADDITIONAL QUESTIONS.

AND AGAIN WE HAVE MIKE, SCOTT, AARON AND JAY HERE.

OKAY. THANK YOU. QUESTIONS FOR STAFF, COUNCILMEMBER HAALAND AND MAYOR PRO TEM THEN COUNCILMAN MELTZER, THANK YOU.

GOOD AFTERNOON.

WHAT IS THE CURRENT HOT TAX PERCENT? I JUST TEXTED THIS TO MIKE.

I BELIEVE IT'S 13. IS IT 13? THAT'S WHAT I RECALLED. IT'S 13.

BUT WE'RE NOT RETAINING ALL OF THAT.

A PORTION GOES TO THE STATE I BELIEVE OUR PORTION IS SEVEN AND THE STATE GETS SIX.

OKAY. SO OF THAT 7% THE CVB IS NOT GETTING THAT ENTIRE 7%.

THEY GET ROUGHLY 1.7 MILLION OF THAT IN THE CURRENT BUDGET FROM 7%, CORRECT, 7%.

SO IT'S ONE POINT.

WHATEVER YOU SAID, I THINK OUR TOTAL BUDGET THIS YEAR OF THE HOT FUNDS THAT WE ALLOCATED IN THE BUDGET WAS 4.4 MILLION.

SO OF THAT 4.4 MILLION DISCOVERED, DENTON IS GETTING 1.7.

OKAY. AND THE THE PED WOULD INCREASE THAT TO WHAT, ROUGHLY $1 MILLION A YEAR OVER THE NEXT TEN YEARS? IT'S AN ADDITIONAL 2% ON TOP OF THE HOT FUND.

SO IT THE IF WE'RE RETAINING SEVEN, THEN THERE WOULD BE A NEW ASSESSMENT OF AN ADDITIONAL 2%.

SO SO THE ROOM COST PLUS 15% PLUS SALES TAX.

IS THAT RIGHT. CORRECT.

NO SORRY NO SALES TAX.

AND IF YOU LOOK AT SO I SHOULD HAVE I THOUGHT ABOUT INCLUDING I HAD GONE RECENTLY AND STAYED IN DALLAS.

AND IF YOU LOOK AT YOUR HOTEL RECEIPT THERE'S TYPICALLY IN ANY OF THESE IF THERE ARE ANY SPECIAL DISTRICTS YOU'LL SEE ON THAT RECEIPT.

BUT YES, ANY IF SOMEONE IS COMING TO STAY AFTER THE CREATION OF THIS, THERE WOULD BE AN ADDITIONAL 2% ON TOP OF WHAT THEY'VE ALREADY BEEN PAYING.

OKAY. I HAVE A QUESTION ABOUT THAT.

AND IT'S A AND I'LL ASK YOU, I DON'T KNOW IF YOU KNOW OR NOT IF, IF I'M, IF I AM A CONVENTION AND I'M SHOPPING VARIOUS TEXAS CITIES AND I SAY, WHAT'S WHAT'S MY ROOM RATE, WHAT DOES IT COST FOR MY PEOPLE TO STAY AT YOUR HOTEL? HOW DO YOU ANSWER THAT? DO YOU ANSWER IT'S $100 A NIGHT BECAUSE THAT'S THE ROOM.

OR DO YOU SAY IT'S $100 A NIGHT PLUS 18%? I'M GOING TO DEFER TO MIKE, EMILY OR JAY, BUT I IMAGINE IT'S THE ROOM RATE IS WHAT'S BEING QUOTED.

YEAH, CORRECT. YOU HAVE TO COME UP HERE, MIKE.

MY CONCERN IS THAT THAT THAT THAT WE'RE GOING TO PRICE OURSELVES OUT OF COMPETITIVENESS.

IT'S A GREAT QUESTION. I CAN ANSWER IT.

CURRENTLY WE'RE AT. ARE YOU AS TALL AS JEFF FRITZ, BY THE WAY? I THINK A LITTLE TALLER. REALLY? OKAY. I DID HAVE SOME BASKETBALL IN MY BACK IN THE DAYS HERE AT U.A., BUT THAT'S THAT'S WAY BACK.

BUT YES, CURRENTLY OUR ACTUALLY THE TAX ON A HOTEL ROOM HERE IS 15% BECAUSE IT'S THE 13.

THERE'S ACTUALLY A COUNTY TAX AS WELL.

AND DENTON THAT IS RECENT I CAN TELL YOU IN DALLAS, HOUSTON, ALL OF OUR MAJOR CITIES, ALL THE CHEAPEST CITIES, THEY'RE AT 17%.

SO WE ARE NOT AT A COMPETITIVE DISADVANTAGE IF WE ADD THIS 2% ON TOP OF THAT.

IN FACT, I THINK IT'S ABOUT 70% OF ALL HOTELS IN THE STATE OF TEXAS ARE AT A 17% OR, YOU KNOW, AMOUNT OF TAX ON THE TOP OF THE ROOM.

SO EVERYONE QUOTES ROOM RATE PLUS TAX RATE PLUS WHATEVER THE TAX IS HOTEL, THEY'LL SAY, AND IT'S DISCLOSED RIGHT IN YOUR CONTRACTS AND EVERYTHING.

BUT GENERALLY, EVEN AS THE SALES PEOPLE, THEY ALWAYS THE RATE IS WHAT PEOPLE ARE ASKING FOR THE TAX.

OBVIOUSLY THE BOTTOM LINE WHEN THEY ADD IT ALL IN THERE, THEY WANT BECAUSE WHEN I TRAVEL, NOT BEING A TRAVEL PROFESSIONAL, I OH BOY, IT'S $109.

THAT'S GREAT. AND THEN IT'S 200, $149.

AND IT'S PROBABLY A GREAT EXAMPLE OF WHAT MOST I WOULD CHALLENGE ANYONE WHO LOOKS.

THEY PROBABLY DON'T EVEN PAY ATTENTION TO THAT.

SO IT'S A GOOD THING TO HAVE.

BUT WE'RE NOT PUTTING OURSELVES IN A POSITION WHERE WE'LL BE UNCOMPETITIVE ON THAT TAX LEVEL.

LIKE I SAID, IT'S 17% EVEN SLIGHTLY HIGHER ON IN SOME OTHER CITIES, I THINK 17.5 IN, IN IN EL PASO AND SAN ANTONIO IS UP AROUND 18.

SO AND AUSTIN'S GOING TO BE GOING IN 19 SOON OKAY.

SO YEAH. SO SO AS FAR AS COMPETITIVE SET WHEN WE'RE TALKING TO MEETING AND EVENT PLANNERS, IT'S NOT OUT OF THE REALM FOR WHERE WE'RE AT BY ANY MEANS.

SO THE HOTELIERS.

GERARD THE TAX, COLLECT OR COLLECT THE TAX AND THE AND THE CONVENTION AND VISITORS BUREAU SPENDS THE MONEY.

[00:40:02]

IS THAT RIGHT? WE WILL SPEND IT BASED ON THE RECOMMENDATIONS.

YEAH. FROM THE THE BOARD.

OKAY. OKAY.

BUT YES, WE DO SPEND THE MONEY THEY DON'T SPEND.

POTENTIALLY. ALL OF THOSE PEOPLE ARE NOT CITIZENS OF CITY OF DENTON.

I MEAN, THEY'RE VISITORS AND THAT'S.

YEAH. SO THERE ARE PEOPLE STAYING IN OUR HOTELS.

YEAH, BUT I'M TALKING ABOUT PEOPLE WHO ARE SPENDING THE MONEY, PEOPLE SPENDING THE MONEY, THE BOARD.

BUT THE BOARD IS NOT ELECTED OFFICIALS.

NO, BUT DENTON IS IS SPENDING IT.

SO WE'RE WE'RE A DIVISION OF THE.

OKAY. YEAH. OKAY.

I THINK THAT'S ALL. THANK YOU, MR. MAYOR. GREAT. MAYOR PRO TEM, THANK YOU.

SO I'LL SORT OF SEMI PICK BACK UP.

DO WE KNOW WHAT PERCENT OF OUR PATRONS ARE EXTERNAL? I PRESUME MORE THAN HALF.

BUT THAT ARE STAYING IN THE HOTELS.

YES. IS IT LIKE 70% EXTERNAL OR.

I DON'T KNOW THAT OFF THE TOP OF MY HEAD.

I MEAN WE COULD GET THAT, BUT I'M GOING TO SAY IT'S 90% 90, 95.

I MEAN, IT'S IT'S VIRTUALLY ALMOST ALL OF THEM.

OKAY. AND THEN FOR THE SEVEN OTHERS THAT HAVE TPDS, DO WE WHAT TYPICAL SORT OF ROI ON ON THAT FOR IF YOU'RE IF WE'RE GOING TO INVEST 12.6 MILLION, ARE WE EXPECTING SOME SORT OF 1.2 MULTIPLIER OR SOMETHING.

YEAH. WE GENERALLY WE WRITE OR WRITING INTO THE PLAN A 7 TO 1 ROI ON TYPICALLY ON ANY SALES INITIATIVES.

AND IF SCOTT WANT TO MAYBE ELABORATE ON THAT.

MY NAME IS SCOTT JOSEPH.

I'M PRESIDENT CEO OF THE TEXAS HOTEL AND LODGING ASSOCIATION.

WE'RE A NONPROFIT ASSOCIATION THAT REPRESENTS ALL THE HOTEL AND TOURISM ENTITIES RELATED TO HOTELS IN TEXAS.

AND ALL OF THE SEVEN TOURISM PUBLIC IMPROVEMENT DISTRICTS IN THE STATE HAVE STARTED OUT WITH AN ESTABLISHED ROI REQUIREMENT FOR BEFORE THEY EVEN CONSIDER A STATE INITIATIVE.

SO, AND IT'S ONE OF THE DIFFERENCES WE HAVE.

AND WHAT WE LOVE ABOUT TOURISM IS WE DON'T EVEN CONSIDER US AN INCENTIVE PROGRAM UNLESS IT HAS AT LEAST A71 7 TO 1 RETURN.

THAT WOULD BE $7 IN ROOM NIGHTS FOR EVERY DOLLAR WE SPEND IN INCENTIVES, AND WE WEIGHT IN ALL THE TOURISM DISTRICTS, WE WAIT FOR THE RIGHT PROJECT TO COME AROUND.

WE'D RATHER HOLD ON TO THE MONEY, OR HOLD IT FOR ANOTHER YEAR AND FIND THE RIGHT PROJECT THAT NOT ONLY HAS THAT ROI BUT EXCEEDS IT.

IN DALLAS, ONE OF THE LARGEST TOURISM PIDS, WE SET A 10 TO 1 ROI, AND AFTER FOUR YEARS WE WERE SHOWING A $16 IN ROOM NIGHT TO EVERY DOLLAR WE SPENT IN INCENTIVES IN DALLAS, THE ROI, WHICH WAS THE FIRST TOURISM DISTRICT IN TEXAS.

THEY INCREASED OCCUPANCY BY 17%.

WITHIN FIVE YEARS.

THEY DOUBLED THEIR CONVERSION RATE FOR SECURING CONVENTIONS.

THEY WENT FROM BOOKING 23% OF THE MEETINGS THAT THEY SAW AT THE CITYWIDE MEETINGS, FROM BOOKING ABOUT ONE OUT OF EVERY FOUR.

THEY'RE NOW BOOKING OVER 46%.

THEY DOUBLED THAT CONVERSION RATE, DOUBLED THE NUMBER OF CITY WIDES.

AND SO FROM OCCUPANCY ROI CONVERSION RATE FOR SECURING CITY WISE, IT'S BEEN A HUGE SUCCESS.

AFTER DALLAS WAS SO SUCCESSFUL, ARLINGTON FORMED THEIR OWN TOURISM PUBLIC IMPROVEMENT, FOLLOWED BY FORT WORTH, THEN SAN ANTONIO, FRISCO, WACO AND CORPUS CHRISTI.

ALL OF THEM HAVE ROI AT VARY BETWEEN SEVEN TO 10 TO 1.

ALL OF THEM HAVE A SEPARATE ROI.

THAT'S FOR SALES. ALL OF THEM HAVE A SEPARATE ROI FOR MARKETING.

AND THEN YOU SAW THE PERCENTAGE THAT IS IN THE BUDGET FOR RESEARCH.

THAT'S NOT JUST TO FIND OUT WHAT WHAT THEM ABOUT.

IT'S THE SPECIFICALLY MEASURE.

EVERY SINGLE INCENTIVE THAT'S GIVEN TO SAY YOU PROJECTED A 14 TO 1 ROI, YOU PROJECTED THIS MANY ROOM NIGHTS BOOKED.

HOW MANY DID YOU ACTUALLY BOOK? THEY LOOK AT OTHER STATISTICS IN TERMS OF TECHNOLOGY, WHERE THEY CAN MEASURE PEOPLE THAT SAW THE MARKETING ADS.

HOW MANY OF THOSE ACTUALLY CAME TO DENTON? HOW MANY OF THOSE ACTUALLY STAYED OVERNIGHT? AND THEN SO THEY'RE MEASURING BOTH ALL THE MARKETING INITIATIVES AND ALL THE SALES INITIATIVES TO MAKE SURE THAT ANY ROI WE PROJECTED OR SET OUT WERE ACTUALLY A MEETING.

AND THEN WE CAN ADJUST WHAT WE'RE DOING.

AND TYPICALLY IN ALL THE DISTRICTS, THE SEVEN DISTRICTS, THEY DO THEIR INCENTIVES ON A REIMBURSEMENT BASIS.

SO IF YOU SAID THAT YOU'RE GOING TO HAVE A THOUSAND ROOM NIGHTS, BUT YOU ONLY HAVE 300, THEY'RE GOING TO ADJUST THAT, THAT, THAT, THAT REBATE BACK TO REFLECT WHAT THE ACTUAL RETURN ON INVESTMENT WAS.

SO WE HAVE CHECKS AND BALANCES.

PLUS WE SET OUT WITH AN ROI AND PLUS WE MEASURE THE ROI.

AWESOME. THANK YOU SO MUCH.

THAT'S ALL MY QUESTIONS, MR. MAYOR.

COUNCILMEMBER MELTZER, DON'T GO AWAY.

HI. ACTUALLY, SOMETHING DIFFERENT TO SAY TILL YOU SAID THIS PART ABOUT THE REBATE.

SO BECAUSE I DIDN'T GET THAT THAT PART OF THE INTENDED BUDGET WOULD BE IT DOESN'T SOUND LIKE IT WOULD BE WOULD BE TO REBATE FROM THAT BUDGET BACK TO THE

[00:45:03]

HOTELIERS. WHAT'S THE REBATE CONCEPT? WELL. OKAY.

YES. THANK YOU.

AS PART OF THE SALES ACTIVITY.

EACH OF THE TOURISM PUBLIC IMPROVEMENT DISTRICTS OFTEN WILL HAVE WHAT'S CALLED AN INDIVIDUAL HOTEL INCENTIVE PROGRAM, IIP.

AND THAT SAYS THAT LET'S SAY DENTON HAS CERTAIN PROPERTIES THAT SAY, YOU KNOW WHAT, WE HAVE SOME IN-HOUSE BUSINESS THAT WE'RE TRYING TO COMPETE WITH LOUISIANA TO GET AND OR WITH OKLAHOMA.

AGAIN, WE'RE TRYING TO BRING IT TO TEXAS, BUT WE HAVE THE SPONSOR THE MEETING OR WE AT THE COMP, THE MEETING SPACE AT OUR HOTEL.

YET WE'RE GOING TO HAVE A 10 TO 1 OR A 14 TO 1 RETURN.

CAN YOU HELP US TO BE COMPETITIVE WITH THESE OTHER MARKETS, TO BRING THAT BUSINESS TO DENTON? AND SO ALL THOSE PROGRAMS AND IT ALLOWS YOU TO NOT, YOU KNOW, TYPICALLY IN A COMMUNITY, YOU MIGHT HAVE ONE FULL SERVICE HOTEL THAT GETS A LOT OF THE CONVENTION OR GROUP BUSINESS, BUT THAT DOESN'T MEAN THE OTHER HOTELS DON'T HAVE THEIR OWN GROUP BUSINESS AND FAMILY REUNIONS OR BUSINESS MEETINGS OR THINGS LIKE THAT.

AND SO WHEREVER THERE IS AN ROI THAT MEETS THE 7 TO 1 STANDARD, WE ALSO HAVE A PROGRAM THAT ALLOWS SOME OF THE FUNDS TO GO TO THOSE PERIMETER OR OTHER ANCILLARY HOTELS THAT MAY NOT BE PART OF YOUR TRADITIONAL CONVENTION BLOCK.

SO IT'S NOT REALLY A REBATE PER SE, AS ISN'T MUCH AS A COVERAGE OF THE COSTS TO BRING THAT MEETING AND INCENTIVE TO BRING THAT MEETING TO THAT INDIVIDUAL HOTEL.

BUYING THE RATE DOWN, IT COULD BE A BUYING THE RATE DOWN.

ABSOLUTELY. WELL, LET'S SAY ONE OTHER QUESTION, IF I MAY.

YES, SIR. IT SAID THAT THE THE KIND OF ACTION TRIGGER WAS 60% OR MORE OF THE HOTELIERS NEED TO BE OVER 60%.

YEAH. SO WHERE ARE WE ON THAT? WELL, WE HAVEN'T STARTED THE COLLECTION OF PETITIONS YET, BUT WE ARE.

WE DON'T EVEN START. WE WOULDN'T BRING THIS TO YOU IF WE HADN'T ALREADY TALKED TO THE HOTELIERS AND SAID, IS THIS SOMETHING YOU WANT? BECAUSE IT ONLY HAPPENS IF WE GET THE APPROVAL OF OVER 60% OF THE HOTELIERS, PLUS THE MAJORITY APPROVAL OF THE CITY COUNCIL.

SO THAT'S WHY WE COME TO BOTH ENTITIES TO MAKE SURE THAT IT'S A VIABLE PROJECT.

I SEE. WELL, YOU KNOW, IF I CAN JUST GO AHEAD AND GIVE DIRECTION, THAT GROUP IS CLEARLY THE BEST TO JUDGE WHETHER IT PROVIDES A COMPETITIVE DISADVANTAGE OR NOT.

AND I TAKE THE POINT VERY, VERY MUCH THAT EVERYONE ELSE IS AT 17 POINTS.

IT'S NOT LIKE, YOU KNOW, IT SETS US BACK.

THE 7 TO 1 STANDARD ON RETURN IS IMPRESSIVE.

I HOPE THAT'S ACHIEVABLE.

AND EVERY NIGHT SURELY WILL RESULT IN SALES TAX COMING IN FROM OTHER PURCHASES.

I THINK THIS IS A REALLY GREAT FOR DENTON, SO I'M SUPPORTIVE.

THANK YOU. OKAY.

ANY OTHER QUESTIONS PLEASE? COUNCIL MEMBER.

WHAT'S. SEE YOU AGAIN.

GOOD TO SEE YOU BROUGHT THE BIG GUNS IN.

YEAH. ALL RIGHT.

I DON'T KNOW HOW BIG, BUT.

AND I HAVE NO WEAPON WITH ME.

JUST FOR THE RECORD. HEY, COUPLE OF QUESTIONS.

SO 60% OF 27 IS 16.2, SO YOU'VE GOT TO GET ALMOST I MEAN, THERE'S 17 I THINK THERE WAS 17 HOTELS AT 75 ROOMS OR GREATER.

IS THAT RIGHT? IT'S JUST THOSE 17 WE HAVE TO GET 60% OF.

OH YOU ONLY GET 60% OF THOSE.

OKAY. YES. THE ONES THAT ARE.

OKAY. RIGHT. ALL RIGHT.

SO I GUESS AND AGAIN THIS IS Y'ALL'S PROGRAM.

SO I JUST A COUPLE OF QUESTIONS I HAVE IS HOW DO YOU AVOID PICKING WINNERS AND LOSERS LIKE WE HAVE 1 OR 2 MAYBE PRIMARY.

WELL ONE THAT I'M AWARE OF WHERE THERE'S ACTUALLY LARGE CONVENTION SPACE WHERE PEOPLE CAN COME IN.

SO OF THOSE OTHER 60% OR THE OTHER 75 ONES THAT HAVE 75 ROOMS, HOW DO HOW DOES THIS NOT JUST GO TO A FEW HOTELS, RIGHT? I MEAN, NO, 100%.

LET ME, LET ME, LET ME ADDRESS THAT, BECAUSE THAT WAS THE ISSUE.

WE WOULDN'T WANT TO FORM THE DISTRICT IF IT ONLY AFFECTED ONE HOTEL OR TWO HOTELS.

AND THAT'S WHY WE HAVE THE INDIVIDUAL HOTEL INCENTIVE PROGRAM, BECAUSE THAT ALLOWS ALL THE HOTELS TO SUBMIT FOR THEIR GROUP BUSINESS.

THE OTHER THING IS THAT BY MARKETING DENTON, THAT NOT ONLY BENEFITS YOUR FULL SERVICE HOTEL, BUT ALL THE PROPERTIES.

AND THEN THE THIRD THING I WOULD POINT OUT IS COMPRESSION.

WHEN WE LOOK AT MOST OF OUR MAJOR MARKETS AND EVEN OUR MEDIUM SIZED MARKETS, WHEN WE HAVE A CITYWIDE OR A CONVENTION THAT IS BOOKING YOUR FULL SERVICE HOTEL, THAT FULL SERVICE HOTEL IS GOING TO BE THROWING OFF ITS BUSINESS THAT IT WOULD NORMALLY GET TO THE OTHER HOTELS.

AND SO WHEN THEY DON'T HAVE A BIG CONVENTION OR A BIG EVENT OR A BIG GROUP AT THAT HOTEL, TYPICALLY THAT HOTEL IS GOING TO LOWER, THE FULL SERVICE HOTEL IS GOING TO LOWER ITS PRICES AND GOING TO BE, I'M NOT GOING TO SAY STEALING BUSINESS, BUT THEY'RE GOING TO ATTRACT AWAY THE BUSINESS THAT MIGHT OTHERWISE HAVE GONE TO THE OTHER HOTELS.

SO WE DID A WE LOOKED AT AUSTIN, AND EVERY TIME WE HAD A CITYWIDE CONVENTION AND THE CITYWIDE EVENT AT THE CONVENTION CENTER, ALL THE PERIMETER HOTELS SAW HUGE

[00:50:05]

INCREASES IN THEIR OCCUPANCY AND IN THEIR RATES.

SO COMPRESSION REALLY IS NOT JUST A THEORY, IT'S A REALITY.

OKAY. JUST A COUPLE MORE QUICK ONES.

MAYOR, AS FAR AS SETTING SORT OF A BASELINE, LET'S SAY YOU MOVE FORWARD AND YOU GET THE REQUISITE SIGNATURES, EVERYTHING'S FINE AND THIS PROGRAM MOVES FORWARD.

HOW ARE YOU GOING TO SET A BASELINE PRIOR TO IT? YOU KNOW, PRIOR TO THE PROGRAM SO THAT WE CAN MEASURE BECAUSE THE 7 TO 1 INCENTIVE, YOU KNOW, YOU GET A SEVEN.

IT'S UNLESS YOU HAVE THAT BASELINE, IT'S GOING TO BE HARD TO BE ABLE TO SAY, WELL, WOULD THEY HAVE COME WITHOUT THE INCENTIVE? WOULD THEY HAVE COME WITH THE INCENTIVE? BUT IF WE HAVE A BASELINE OF HOW MANY ROOM NIGHTS WE HAVE NOW, JUST BUSINESS AS USUAL.

AND THEN ONCE WE'RE SPENDING THIS MONEY, IS THERE A IS THERE A WAY TO DO THAT.

YES. OKAY.

DO GIVE YOU AN EXAMPLE. WE JUST HAD A MEETING IN CORPUS CHRISTI WHERE THEY MET.

THEY JUST FORMED A TOURISM PIT IN THE LAST YEAR.

AND WHAT THEY DO IS THEY PRESENT TO THEIR BOARD OF DIRECTORS AND AS WELL TO THE CITY COUNCIL IN THEIR ANNUAL REPORT.

HERE'S WHAT WE'RE USING THE HOTEL TAX FOR.

AND THIS IS HOW MANY ROOM NIGHTS IT IS TYPICALLY GENERATED OVER THE PERIOD OF TIME.

HERE'S THE SUPPLEMENTAL FUNDING WE HAVE AT THE TOURISM PIT.

AND IT'S IMPORTANT TO NOTE THAT THIS IS INTENDED TO BE SUPPLEMENTAL FUNDING.

THE HOTEL INDUSTRY WOULD NOT DO A TOURISM PIT IF IT WERE SIMPLY TO REPLACE WHAT YOU WERE, WHAT YOU USED TO SPEND IN HOTEL TAX IN ORDER FOR IT TO BE EFFECTIVE AND FOR IT TO WORK.

WHATEVER YOU WERE GIVING BEFORE THEN THE THEORY IS WE'LL GO AHEAD AND ASSESS OURSELVES TO GET ADDITIONAL FUNDING, AND THEN WE'LL HOLD THIS ADDITIONAL FUNDING.

IT'S NOT TO BE SPENT FOR WHAT YOU DID BEFORE.

IT'S TO BE SPENT FOR NEW PROJECTS OR TO EXPAND WHAT YOU'RE DOING IN MARKETING, OR EXPAND WHAT YOU'RE DOING IN IN INCENTIVES.

ONE OF THE THINGS THAT WE FOUND OUT WITH, WITH NOT ONLY DENTON, BUT ALL THE OTHER SEVEN CITIES, IS THAT THE COMMUNITIES RAN OUT OF MONEY FOR BIDDING ON BUSINESS.

THEY COULD HAVE BEEN WINNING.

IN OTHER WORDS, YOU ONLY HAVE SO MUCH MONEY FOR INCENTIVES.

AND ONCE YOU BID OUT ON THIS CONFERENCE AND THIS EVENT AND THIS SPORTING EVENT, YOU HAVE TO STOP BIDDING.

YET THERE'S A LOT OF OTHER EVENTS THAT WOULD CONSIDER DENTON AS A LOCATION, AND YOU COULD BE EVEN MORE LUCRATIVE IN THE BIDS THAT YOU PUT OUT.

THAT'S WHY DALLAS WAS ABLE, IN ONE YEAR, TO DOUBLE THEIR CONVERSION RATE.

IT'S NOT THAT THEY SUDDENLY BECAME THAT MUCH MORE EFFECTIVE OR EFFICIENT, IT'S THAT THEY COULD BID ON SO MANY MORE EVENTS THAT WANTED TO COME TO DALLAS.

AND I JUST HAD A MEETING IN AUSTIN THIS MORNING WITH SOME HOTELIERS, AND THEY WERE LOOKING AT WHEN YOU'RE ABLE TO BID AND YOU'RE ABLE TO LOOK AT ALL THE EVENTS, YOU CAN NOT ONLY MAKE YOUR BIDS BETTER, BUT YOU CAN BID ON MORE.

YEAH. MAYOR, IF I IF I'D LIKE TO JUST HEAR A COUPLE OF VERY BRIEF COMMENTS IF THEY'RE WILLING TO SHARE FROM, I THINK SOME OF THE HOTELIERS THAT WE HAVE HERE JUST TO SEE I MEAN, YOU GUYS ARE THE SORT OF THE ASSOCIATIONS AND ALL THAT, BUT THE PEOPLE WHO ARE ACTUALLY GOING TO BENEFIT FROM THIS, IF EITHER ONE OF THEM WOULD WANT TO SPEAK, THAT'S FINE.

IF NOT, THAT'S OKAY TOO. SURE.

IF THEY'RE IF THEY WANT TO SHARE.

I'LL COME. GOOD AFTERNOON.

GOOD AFTERNOON. I'M EMILY, I'M THE GENERAL MANAGER AT THE HOMEWOOD SUITES OVER ON UNICORN LAKE.

IT'S A HILTON HOTEL. I'VE BEEN HERE SINCE 2014, AND I'M A RESIDENT OF DENTON.

YOU KNOW, MY KIDS GO TO RYAN ELEMENTARY AND CLOSER.

SO SORRY. THERE YOU GO. YOU KNOW, AND SINCE THE.

SO I WAS HERE PRIOR TO THE CONVENTION CENTER.

WE BOTH WERE. AND WE BOTH AGREE ON THE COMPRESSION.

WHEN THE CONVENTION CENTER HAS GROUPS AND HAS BUSINESS, WE GET THAT BUSINESS.

WE FEEL THE COMPRESSION.

WE, YOU KNOW, EVERYBODY SELLS OUT AND FEELS IT.

THE OTHER THING WAS, IS THE THE SMALL INCENTIVES, YOU KNOW, I LOSE BUSINESS BECAUSE I DON'T HAVE SHUTTLE.

AND SO THE OPPORTUNITY TO BE ABLE TO BID ON A GROUP THAT I COULD GET REIMBURSED AND HAVE A SHUTTLE, THAT'S A PRIME EXAMPLE OF A GROUP THAT I WOULD THAT I AM CURRENTLY LOSING, THAT I COULD OTHERWISE GET.

I'M JAY DARCY WITH THE HILTON GARDEN.

LIKE EMILY MENTIONED WITH THE COMPRESSION.

JUST TWO WEEKS AGO, THE EMBASSY SUITES HAD A LARGE CONVENTION, FILLED THEM UP, FILLED MY HOTEL UP.

I WAS A SUNDAY TO THURSDAY.

TYPICALLY SUNDAYS WE RUN 40 TO 50%.

WE WERE 100%, WE WERE FULL.

AND THE RATES WE WERE ABLE TO CAPTURE 130 PLUS.

SO THAT COMPRESSION HELPS.

ALSO, WITH THE EMBASSY, I'M SURE MOST OF YOU KNOW THE HISTORY BEHIND THAT, BUT TO BUILD THAT CONVENTION CENTER, THEY WERE GIVEN INCENTIVE.

SO ALL OF THEIR HOT FUNDS.

AND MIKE HAS MORE SPECIFIC BUT GOES BACK TO TO THEM.

SO THOSE FUNDS THAT ARE, YOU KNOW, THEY'RE GETTING THE CONVENTIONS AND THE FUNDS THAT THE GUESTS ARE PAYING FOR THE HOTEL TAX GOES DIRECTLY BACK.

SO THIS IS A WAY TO KIND OF GET SOME MONEY BACK FROM EMBASSY FOR PEOPLE, YOU KNOW, WHEN THEY'RE FILLING UP, WE'RE GETTING 2% VERSUS THAT GOING BACK OUTSIDE OF JUST THE SALES TAX THAT THEY BRING TO TOWN.

SO I DON'T KNOW, MIKE, IF YOU CAN WHAT THE TOTAL HOT COLLECTED AND THEN TAKE OUT THE EMBASSY.

WHAT THAT NUMBER.

[00:55:05]

OH, YES, IT'S ABOUT THAT. IT'S ABOUT THE SAME AMOUNT AS OUR.

WHAT IS IT, THE 1.7? YEAH. IT'S ROUGHLY, I THINK 22 TO 24% OF THE OVERALL COLLECTION.

YEAH. OR 38.

WOULD THAT ADDITIONAL 2%, WOULD THAT ADDITIONAL 2% BE INCLUDED IN THE INCENTIVE TO TO REFUND TO EMBASSY SUITES.

NO NO NO OKAY. SO WHATEVER WHATEVER OKAY.

THAT 2%.

GOTCHA. OKAY. ALL RIGHT.

AND THEN JUST IT ALLOWS.

UM, THE CVB, WHEN THEY HAVE A GROUP COMING AND THEY SAY, HEY, WE NEED A SHUTTLE BUS FOR OUR GROUPS.

US SMALL HOTELIERS DON'T HAVE THE FUNDING TO DO THAT, SO THIS MAKES IT MORE COMPETITIVE.

THERE MIGHT BE A CITY.

YOU KNOW, DALLAS OR OKLAHOMA THAT SAYS, YOU KNOW WHAT? COME TO OUR CITY AND WE'RE GOING TO WE'RE GOING TO PAY FOR YOUR SHUTTLE.

WE'LL GET YOUR PEOPLE WHERE THEY NEED TO GO.

AND THEN THEY COME TO US AND WE JUST HAVE A VERY SMALL BUDGET THAT WE, YOU KNOW, WE CAN'T DO.

SO I FULLY SUPPORT IT.

THANK YOU. MAYOR. OKAY.

OKAY. COUNCILMAN. BYRD.

YOU KNOW, AS YOU ALL ARE SPEAKING, I'M THINKING OF SOMETHING ELSE THAT'S ALONG THOSE LINES IN REGARDS TO GROUPS COMING IN AND USING THE FACILITIES. ARE YOU ALL DISCOVERED IN.

CONNECTING WITH THE CITY IN REGARDS TO, YOU KNOW, WHAT'S INTERESTING HERE, ECONOMIC DEVELOPMENT WISE IN TERMS OF AMUSEMENT.

AND, YOU KNOW, I KNOW WE HAVE OUR LITTLE SPACE WHERE WE HAVE OUR ADULT ENTERTAINMENT TYPE STUFF, BUT IS THERE ANY PRESSURE BEING PUT ON THE CITY IN REGARDS TO MORE THINGS? SO THAT MAY CAUSE MORE PEOPLE TO WANT TO SETTLE HERE, YOU KNOW, FOR ACTIVITIES? HOW DOES THAT WORK? YOU YOU GET WHAT I'M SAYING? YEAH. YEAH, I THINK I DO.

AND I THINK OUR, OUR RELATIONSHIP BEING A DIVISION OF THE CHAMBER HAS HELPED WITH THAT SINCE THEY'RE ALL ABOUT ADVOCATING FOR BUSINESS AND GROWTH.

SO THEY'RE KIND OF OUR, I GUESS OUR WING INTO THAT.

AND WITH THEIR ECONOMIC DEVELOPMENT PARTNERSHIP, WE GENERALLY GET WORD OF THINGS THAT ARE MIGHT BE IN THE WORKS OR DEVELOPMENT.

YOU KNOW, A GOOD EXAMPLE OF THIS IS I KNOW IT'S JUST OUTSIDE THE CITY LIMITS, I THINK, BUT THAT THE NEW NORTH TEXAS FAIRGROUNDS EXPO CENTER, THEY'RE LOOKING AT BUILDING, I MEAN, THAT'S GOING TO BENEFIT DENTON GREATLY.

OUR HOTELS ARE THE FIRST HOTELS THEY'RE GOING TO BE AT.

AND SO THINGS THAT'S GOING TO BE SOMETHING THAT'S FAMILY FRIENDLY.

THERE'S GOING TO BE A SPORTS FACILITIES AND INDOOR OUTDOOR COURTS.

SO STUFF LIKE THAT. WE COULD ALWAYS USE MORE THINGS.

SO IT'S MORE OF A CHALLENGE WE HAVE SOMETIMES JUST AS SELLING DENTON WHAT MORE IS IT? I KNOW WE'VE TALKED ABOUT IT BEFORE TOO, THAT WE DON'T WANT TO JUST PROMOTE THE BREWERIES AND THE PUBS AND THE THINGS LIKE THAT, ALTHOUGH THAT'S GREAT THINGS THAT WE HAVE, BUT FAMILY, FAMILY ORIENTED THINGS.

SO THE MORE THINGS WE CAN DO AND HELP PROMOTE AND SELL THE CITY DEFINITELY GIVES US.

THAT'S WHERE I WAS GOING WITH THAT.

YES. PERFECT. CORRECT.

AND MAKING SURE WE'RE ON PROFIT.

CORRECT. COUNCILMAN HOLLAND THANK YOU.

WOULD WOULD THE THE AFFECT THE HOTS FUND? WE HAVE A HOTS FUND THAT THAT COUNCIL APPARENTLY DISTRIBUTES.

WOULD THIS BE TO TWO SEPARATE AGENCIES DISPERSING TOURISM INCENTIVE FUNDS? I CAN GIVE THE LEGAL ANSWER IF YOU'D LIKE.

AND I'D LIKE THE LEGAL ANSWER.

OKAY. OKAY.

THE HOT FUND IS COMPLETELY SEPARATE.

IT'S WITHIN THE DISCRETION OF THE CITY COUNCIL.

YOU ALLOCATE IT JUST LIKE YOU DID BEFORE THE TOURISM PUBLIC IMPROVEMENT DISTRICT.

YOU ALSO HAVE OVERSIGHT FOR YOU HAVE TO APPROVE THE SERVICE PLAN AND THE UPDATE EVERY YEAR TO THAT SERVICE PLAN.

SO YOU HAVE THAT OVERSIGHT.

THERE ARE TWO SETS WITH TWO SEPARATE STATUTORY BASES.

THE HOTEL TAX IS CONTROLLED BY THE USES UNDER CHAPTER 351 OF THE TAX CODE.

THE TOURISM PUBLIC IMPROVEMENT DISTRICT IS CONTROLLED BY CHAPTER 372 OF THE LOCAL GOVERNMENT CODE.

THAT ONLY ALLOWS THE MONEY TO BE USED FOR TWO PRIMARY PURPOSES MARKETING AND SALES.

AND THAT'S BY STATE STATUTE.

RESEARCH AND ADMINISTRATION IS A SUBSET OF MARKETING AND SALES.

AND SOME GOOD NEWS FOR YOU AND FOR THE COUNCIL IS THAT EVERY TIME, IF YOU HAVE $100 ROOM RATE AND THEN AND YOU HAVE A 2% TOURISM PITCH, YOUR NEW BASE WOULD BE $102 FOR THAT ROOM NIGHT, AND THAT WOULD BE THE BASE FOR YOUR HOTEL TAX.

SO YOU GET THE HOTEL TAX ON THAT 2% RATE.

SO THAT'LL BUMP UP YOUR HOTEL TAX, YOU KNOW, CITYWIDE FOR ANY PURPOSES THAT YOU EXPEND MONEY, BECAUSE THEY'RE NOT ONLY GOING TO PAY THE HOTEL TAX ON THE $100 BASE RATE, BUT ON

[01:00:03]

THE 2% TOURISM FEE AMOUNT.

INTERESTING. VERY EXCELLENT ANSWER.

THANK YOU, THANK YOU. DO I ASSUME THAT THAT HOTELS WITH LESS THAN 75 ROOMS ARE ALSO GOING TO PAY THE THE NEW THE NEW RATE 15 TO 16%.

NO. HOTELS WITH LESS THAN 75 ROOMS. IT'S ONLY 75 ROOMS AND MORE THAT WILL BE WITHIN THE DISTRICT.

THOSE ARE WHAT WE CALL OUR ELIGIBLE HOTELS, WITH THE THEORY BEING IF YOU HAVE AT LEAST 75 ROOMS OR MORE, YOU'RE LIKELY TO BENEFIT DIRECTLY FROM THE ACTIVITIES OF THE TOURISM PIT. NOW, ALL THE HOTELS WILL GET SOME BENEFIT, OF COURSE, BUT WE TRIED TO CREATE A POOL OF WHO WOULD GET THE MOST BENEFIT AND BRING THEM INTO THE DISTRICT, AND THEN WE HAVE TO GET OVER 60% OF OF ALL OF THOSE HOTELS WITHIN THAT CATEGORY.

TO GIVE YOU AN EXAMPLE, ARLINGTON ALLOWS ALL HOTELS WITH 75 OR MORE ROOMS. THERE ARE HOTELS IN ARLINGTON THAT HAVE LESS THAN 75, BUT THE ONLY ONES WHO ARE ON THE BOARD AND ARE PART OF THE DISTRICT IN TERMS OF ASSESSING THE RATE ARE HOTELS WITH 75 OR MORE IN FORT WORTH AND DALLAS, IT'S HOTELS WITH 100 OR MORE ROOMS. SAN ANTONIO IT'S 100 OR MORE ROOMS. CORPUS CHRISTI I THINK IT'S 40 OR MORE ROOMS. FRISCO. WE HAVE A DIFFERENT NUMBER.

I THINK IT MAY BE 30 OR MORE ROOMS, BUT WE LOOK AT EACH MARKET AND WE SAY WHO WOULD BENEFIT MOST AND WE CREATE THAT AS THE ELIGIBLE CLASS.

AND OF COURSE, WHEN WE'RE CREATING THE ELIGIBLE CLASS, WE ALSO WANT TO LOOK AT WE HAVE TO GET OVER 60% OF THOSE FOLKS WITHIN THE ELIGIBLE CLASS TO SIGN THE PETITION.

SO WE LOOK WHO WOULD BE MOST LIKELY TO SUPPORT IT.

SO IT'S A WIN WIN FOR BOTH.

YOU DON'T WANT TO DRAG PEOPLE IN WHO AREN'T EXCITED ABOUT AND WOULDN'T SEE A DIRECT BENEFIT.

AND THEN AS A MATTER OF LAW UNDER THE PUBLIC IMPROVEMENT DISTRICT LAWS, WHOEVER WE HAVE IN THE DISTRICT, WE HAVE TO SHOW A COMMENSURATE BENEFIT.

WE CAN'T JUST ASSESS THEM, YOU KNOW, $2,000 A YEAR IN PUBLIC IMPROVEMENT DISTRICT ASSESSMENTS, IF WE'RE NOT GIVING THEM THAT AMOUNT AND VALUE ANNUALLY, THEY COULD ARGUE THAT IT'S A DISTRICT THAT HAS A SPECIAL ASSESSMENT THAT'S NOT YIELDING A BENEFIT.

SO THAT'S WHY WHEN WE INCLUDE AND WE DON'T TRY TO OVER HAVE OVERBREADTH AND INCLUDE TOO MANY, WE TRY TO INCLUDE THE FOLKS WE KNOW WE CAN HAVE AN ROI BACK TO THEIR PROPERTIES.

VERY GOOD, VERY GOOD. THANK YOU.

ALL RIGHT. ANY OTHER QUESTIONS? SEEING NONE I JUST WANTED TO CONFIRM WHAT YOU JUST SAID.

THE THE RATE IS.

SO IF IF SOMEONE'S CAPTURING A HIGHER RATE, IT'S BASED ON IT'S NOT BASED ON A BASE RATE FOR A ROOM, IT IS THE ACTUAL DOLLARS RECEIVED FOR THAT ROOM.

AND THAT 2% IS ASSESSED TO THAT.

SO IF THERE IF THAT RATE IS HIGHER THEN THAT.

OKAY. GOT IT. EXACTLY.

IT'S A PERCENTAGE OF WHATEVER YOUR RATE IS.

IF YOUR RATE IS $200, IT'S GOING TO BE 2% OR $200.

IF YOUR RATE IS $100, IT'S GOING TO BE 2% OF $100.

GOT IT. AND THEN JUST AGAIN, YOU ALREADY TOUCHED ON IT.

BUT JUST TO CONFIRM, AND MAYBE THIS IS A MIC QUESTION AND JUST TO DOCUMENT IT, NOT TO PUT YOU IN A BAD SPOT.

SO THESE ARE MY WORDS, NOT YOURS.

BUT THE HOT TAX IS AN ISSUE, RIGHT.

BECAUSE THE COUNCIL DISTRIBUTES THAT MONEY AND WE MAY NOT BE AS STRINGENT OR HAVE THE DATA TO SUPPORT WHERE THOSE HOT FUNDS ARE GOING.

AND IF IT'S GENERATING ROOM, WE DON'T WE DON'T HAVE THAT SAME SPECIFICATION FOR WHAT THOSE HOT FUNDS GO TO.

AND THE DIRECT RESULT TO OUR HOTELIERS.

I DON'T WANT TO PUT MIKE ON THE SPOT FOR THAT, BUT YES, SURE.

AND THAT WON'T CHANGE, IS WHAT COUNCIL MEMBER HOLLAND WAS ASKING, THAT FUNDS WILL STILL BE MANAGED BY COUNSEL, AND WE DO STILL ALLOW FESTIVALS AND DIFFERENT ACTIVITIES TO APPLY.

AND OUR DATA IS BASED OFF SELF REPORTING.

SO SAYING WE HAVE THIS MANY ATTENDEES, IS IT GENERATING BUSINESS TO COME TO DENTON.

AND THAT'S KIND OF HOW WE ALLOCATE RIGHT NOW.

WE ARE WORKING THROUGH REFINING THAT PROCESS.

BUT YOU'RE CORRECT.

IT'S NOT A A GREAT PROCESS ON HOW WE ALLOCATE THAT, WHICH LEADS TO DISCOVER DENTON GETTING THAT SMALLER PORTION OF THE FUNDS.

RIGHT. AND SO THAT'S THAT'S THE UNIQUE THING IN THIS.

AND YOU WON'T SAY IT I WILL.

BUT THAT'S THE PROBLEM.

RIGHT. THAT HOTELIERS ARE SAYING OR THINKING OR.

MAYBE WHEN THEY'RE WATCHING THAT ALLOCATION LIKE, HEY, YOU KNOW, I WOULDN'T HAVE TO DO THE EXTRA 2% IF I WAS GETTING MORE OF THE OTHER PERCENT, RIGHT.

BUT I'M NOT GETTING A PERCENT.

Y'ALL AREN'T RESPONDING OR IN A WAY THAT I WOULD, OR PROVIDING THE DATA OR REQUIRING THE REPORTING THAT I WOULD REQUIRE.

ERGO, WE'RE GOING TO GO DO THIS BECAUSE WE WANT TO BE COMPETITIVE.

WE WANT TO CONTINUE TO BE SUCCESSFUL, ETCETERA.

AND THEY'RE ALREADY BEING SUCCESSFUL.

I MEAN, THE NUMBERS ARE UP, THE AVERAGES ARE UP, ALL THOSE THINGS.

BUT TO CONTINUE THAT TO TO DO THE SHUTTLES, THOSE SORTS OF THINGS BECAUSE OF THAT ALLOCATION, IT'S ONE, YOU KNOW, ONE AFFECTS THE OTHER.

IN MY MIND, JUST BASED ON THE CONVERSATIONS I'VE HAD.

SO NOT AGAIN, NOT PUTTING WORDS IN YOUR MOUTH.

THAT'S JUST WHAT I'VE HEARD FROM PEOPLE IS, HEY, YOU GAVE HOT FUNDS TO THIS ORGANIZATION.

THEY'RE NOT GENERATING ROOM NIGHTS.

WELL, WE ARE WORKING AND THAT IS ONE OF THE COUNCIL PRIORITIES TO LOOK AT STREAMLINING THAT PROCESS.

AND SO WE ARE CONTINUING TO MAKE IMPROVEMENTS IN THAT APPLICATION PROCESS.

SO WE CAN MAKE SURE ARE WE AWARDING FUNDS THROUGH THE HOT FUNDS PROGRAM ON ACTUAL EVENTS THAT ARE DRAWING PEOPLE TO STAY IN DENTON AND STAY OVERNIGHT.

[01:05:08]

SO WE'RE CONTINUING TO IMPROVE THAT, GET SOME TOOLS THAT WILL MAYBE MOVE AWAY FROM SELF-REPORTING TO ACTUAL DATA OF YES, WE KNOW THAT THESE PEOPLE STAYED HERE, BUT I MEAN, YOU'RE CORRECT. 26 I THINK 26% OF THAT HOT FUNDS BUDGET DOES GO TO FESTIVALS LIKE DAY OF THE DEAD, ARTS AND JAZZ, VERSUS ALL GOING TO THE CONVENTION AND VISITORS BUREAU.

OKAY. YES, SIR.

IF I CAN NOTE TO WHAT WE FOUND IN THE TOURISM PUBLIC IMPROVEMENT DISTRICTS, IT'S BEEN A GREAT OPPORTUNITY TO PROVIDE AN ALTERNATIVE MODEL TO THE CITY COUNCIL TO SAY, LOOK HOW WE CAN DO IT. IF WE HAVE HOTELIERS THAT ARE PROLIFERATING THE BOARD, IF WE DON'T HAVE A MANDATE TO SPEND THE MONEY THAT YEAR, BUT WE WAIT FOR THE RIGHT PROJECT AND SET AN ROI MINIMUM, AND THAT IF WE MEASURE EVERY ONE OF OUR PROGRAMS AND MAKE SURE THEY MET AND EXCEED THOSE MINIMUMS, I THINK THIS WILL BE THE NEW GOLD STANDARD, AND IT'LL BE GREAT FOR YOU TO LOOK AS A CITY COUNCIL TO SAY, HOW DID THEY DO COMPARED TO THE OTHER FUNDING THAT WE HAVE, AND WHAT IMPROVEMENTS CAN WE MAKE IN THE HOTEL OCCUPANCY TAX REALM? BASED ON WHAT WE'VE LEARNED IN THE TOURISM PUBLIC IMPROVEMENT DISTRICT REALM? GOT IT. YEAH. SO I WOULD JUST SAY, CHRISTINE, AS THAT COMES BACK AS WE TRUE THAT UP.

I DON'T WANT TO CAUSE RIPPLE EFFECTS ON THOSE THAT ARE RECEIVING THOSE FUNDS.

RIGHT. THAT MAY NOT ONCE YOU TRUE UP THOSE NUMBERS COME IN UNDER REPORTING.

SO I WOULD JUST SAY WHEN YOU BRING THAT BACK I THINK THERE NEEDS TO ONE A IS ADDRESSING THAT AND MAKING SURE WE'RE STATIC AND HOW WE'RE TRACKING THAT AND WE'RE AND WE'RE GETTING REAL NUMBERS. ONE B WOULD BE FOR MY PREFERENCE WOULD BE WHERE WE CAN SUPPLEMENT THOSE FUNDS.

SO HEY, THIS NUMBER WE BELIEVE IS OVERINFLATED.

THIS GROUP IS USED TO GETTING X AMOUNT OF DOLLARS.

THAT'S GOING TO TAKE A HIT FROM THE HOT FUNDS PERSPECTIVE.

BUT HERE'S A FUND THAT WE CAN SUPPLEMENT THAT.

HERE'S A WAY WE CAN MAKE THEM WHOLE.

WE STILL WANT THESE EVENTS.

WE JUST NEED TO SPEND THE MONEY OUT OF THE RIGHT BUCKET.

RIGHT. AND SO THAT DOESN'T MEAN YOU DON'T GET THE MONEY OR YOU DON'T GET AN INCREASE.

THAT JUST MAY MEAN IT'S A DISCUSSION FOR THE COUNCIL.

DOES THAT COME FROM THE GENERAL FUND? DOES THAT COME FROM FESTIVAL FUND, WHEREVER THAT IS.

BUT IT THEN ALLOWS US TO HAVE A SOLID CONVERSATION BASED ON DATA ON HOTEL HOT, HOT TAX FUNDS.

AND THEN THERE'S THIS OTHER FUND THAT WOULD THEN SAY, HEY, WE THINK YOU'RE DOING A GREAT JOB, GREAT EVENT VALUE THE CITY, GREAT MARKETING, WHATEVER.

AND WE'RE GOING TO SUPPLEMENT OUT OF THIS OTHER FUND.

AGREED. WE WANT TO MOVE IN THAT DIRECTION AND MAKE DATA DRIVEN DECISIONS AND MAXIMIZE THOSE FUNDS.

OKAY. GREAT. AND THEN LASTLY I'LL JUST SAY FROM FROM A PRICING STANDPOINT, YEAH, I WAS JUST IN AUSTIN AND THOUGHT IT WAS A LESS THAN GREAT PART OF TOWN. RIGHT.

AND BUT IT WAS NEAR THE AIRPORT, SO IT WAS GREAT.

BUT I MEAN, I WAS 130 AND AND IT WAS I MEAN, IT WAS.

SO I THINK TO YOUR POINT, IT'S IT'S MORE THAN, YOU KNOW, ANYTHING WE WOULD DO HERE WOULD MAKE ME WANT TO FEEL SAFER, TOO.

IT WOULD BE RIGHT IN LINE WITH THAT ON, YOU KNOW, ON THE HIGHER END.

SO I FEEL LIKE WE'RE REALLY POSITIONED WELL AND, AND SO LOOK FORWARD TO THOSE CONVERSATIONS.

AND THEN ALSO WE JUST PUT FORWARD FROM A SHUTTLE STANDPOINT, I THINK THAT'S ABSOLUTELY SPOT ON.

AND IF WE CAN PARTNER WITH LIKE A DCTA FOR BUSSES OR SOMETHING LIKE THAT TO THEN KIND OF KEEP IT IN THE FAMILY AND KIND OF SOURCE THOSE THAT WAY, THEN WHATEVER WE CAN DO.

BUT BUT I RESPECT THE FACT THAT, YES, YOU HAVE TO GO GET PEOPLE ON BOARD.

AND SO THAT PROCESS TO ME, THERE'S NOTHING MORE FAIR AND EQUITABLE.

SO YEAH, I'M SUPPORTIVE AS WELL.

SO THAT'S THAT'S MY THOUGHT IS THERE.

SO SIMPLY IS THERE ANYONE THAT'S NOT IN SUPPORT.

THAT'S THE EASIEST WAY TO ADDRESS IT.

ANYONE NOT IN SUPPORT OKAY.

GREAT. ADDITIONAL QUESTIONS.

IS THAT WHAT I'M SEEING. WHAT AM I.

IT WAS ABOUT WHAT YOU JUST OKAY.

GOT IT OKAY. GOT IT OKAY.

VERY GOOD. ALL RIGHT. THANK YOU ALL VERY MUCH.

I APPRECIATE YOU ALL BEING HERE. THANKS.

I'M SORRY. MAYOR, ONE ADDITIONAL QUESTION.

BEFORE THEY SUBMIT THE PETITION, THEY WILL ALSO BE SUBMITTING THAT SERVICE PLAN.

SO IT SOUNDS LIKE EVERYONE WAS IN AGREEANCE OF USING THE MONEY IN THOSE MAJOR CATEGORIES, THOSE INCENTIVES, THE SHUTTLES, THE MARKETING.

ANY THOUGHTS ON THAT? OKAY. OKAY. ALL RIGHT.

THANK YOU VERY MUCH. THANK YOU.

APPRECIATE YOU BEING HERE.

YEAH. YES.

ALL RIGHT. THAT TAKES US TO OUR LAST WORK SESSION ITEM BEFORE WE GO INTO CLOSED.

[D. Receive a report, hold a discussion, and give staff direction on pending City Council requests for: 1. A work session to discuss the City creating Public Facility Corporations to develop affordable housing in the City of Denton, including a comprehensive analysis of the definition, creation, and administration of Public Facility Corporations. [Estimated Presentation/Discussion Time: 30 minutes]]

AND THAT IS ID 23227 RECEIVE, REPORT.

HOLD DISCUSSION. GIVE STAFF DIRECTION ON PENDING CITY COUNCIL REQUEST.

GOOD AFTERNOON, COUNSEL MONICA BENAVIDES, ASSISTANT TO THE CITY MANAGER.

I'M GOING TO GO OVER TODAY'S PENDING REQUEST FOR INFORMATION, ALSO KNOWN AS A TWO MINUTE PITCHES.

I WON'T READ THIS SLIDE VERBATIM, BUT IT'S JUST A REMINDER THAT THE REQUESTING COUNCIL MEMBER WILL HAVE UP TO TWO MINUTES TO DESCRIBE THEIR THEIR REQUEST, AND RESPONDING COUNCIL MEMBERS HAVE UP TO ONE MINUTE TO PROVIDE FEEDBACK.

SAME WITH THIS. ONE REQUEST SHOULD BE ASSIGNED A HIGH, MODERATE OR LOW PRIORITY.

[01:10:01]

WITH THAT. WE HAVE ONE TODAY FROM COUNCIL MEMBER WATTS.

IT IS A WORK SESSION TO DISCUSS THE CITY CREATING PUBLIC FACILITY CORPORATIONS TO DEVELOP AFFORDABLE HOUSING IN THE CITY OF DENTON, INCLUDING A COMPREHENSIVE ANALYSIS OF THE DEFINITION, CREATION AND ADMINISTRATION OF PUBLIC FACILITY CORPORATIONS.

SO, COUNCIL MEMBER WATTS, I'LL TURN IT OVER TO YOU.

YOU HAVE TWO MINUTES.

ALL RIGHT. START MY TIME THERE.

I WANT TO TAKE THE TWO MINUTES. YEAH.

BASICALLY, I WANT TO JUST BRING BACK.

I'M NOT GOING TO PUT A HARD SELL ON.

WE ALL ARE PRETTY FAMILIAR WITH THE ISSUE.

JUST WANTED TO BRING UP A COUPLE POINTS.

AND THE REASON I'M BRINGING BACK IS, NUMBER ONE, THE CITIZENS COMMITMENT TO AFFORDABLE HOUSING BY THE PASSAGE OF THE AFFORDABLE HOUSING BOND PROPOSITION.

THIS DOES NOT INFRINGE UPON DENTON HOUSING AUTHORITY.

IT CREATES OTHER OPTIONS FOR US THAT ALLOWS US IF THEY DON'T DO IT.

BUT IN THE EVENT THAT IT DOES CREATE OPTIONS THAT PEOPLE THAT BENEFIT THE MOST ARE CITIZENS WHO ARE NEEDING AFFORDABLE HOUSING.

AND I LEARNED SOMETHING NEW.

I THINK THIS CAN APPLY TO ALSO PROPERTIES THAT ARE PREEXISTING, THAT IF YOU HAVE SOMEBODY WHO'S WANTING TO BUY PREEXISTING PROPERTIES, THEY CAN ENTER INTO THESE, WHICH THEN ALSO HAS A CHANCE TO INCREASE THE AFFORDABILITY, AFFORDABLE HOUSING A NUMBER OF AFFORDABLE HOUSING UNITS WITH A MUCH LESS COST THAN NEW CONSTRUCTION.

THE STUDY COUNCIL MEMBER, MAYOR PRO TEM, MENTIONED IT IN THE COUNCIL MEETING WHERE IT DIDN'T PASS THAT THE STUDY WAS NOT VERY KIND TO FCS, AND I AGREE WHOLEHEARTEDLY WITH THAT.

WE'VE SEEN A PROJECT IN DENTON LIKE THAT, BUT IT ALSO THE STUDY PRESENTS WAYS TO MITIGATE THAT, AND THE ONLY WAY TO MITIGATE IT FOR US AS A CITY IS IF WE HAVE A SEAT AT THE TABLE, WHICH TO ME IS THE MOST IMPORTANT THING.

SO WE'VE BEEN THROUGH THIS.

IT WAS DIRECTED TO HAVE A WORK SESSION BEFORE COUNCIL VOTED AGAINST IT BACK IN LIGHT OF THE BOND PROGRAM.

SO, MAYOR, THAT'S ALL I HAVE TO SAY.

THANK YOU. OKAY.

ANY ANY COMMENTS, COUNSELOR? MELTZER YEAH, I'M HAPPY TO HAVE THE WORK SESSION ON THE CONDITION THAT IT INCLUDE DENTON HOUSING AUTHORITY IN THE CONVERSATION.

I REALLY, TRULY WANT TO UNDERSTAND WHAT THE DIFFERENT INTENDED ROLES ARE FOR EACH AND HOW WE WOULD WORK TOGETHER OR NOT TOGETHER.

IT'S OTHERWISE, I THINK IT'S FRANKLY CONFUSING TO THE PUBLIC, NOT JUST ME ALONE.

SO. YOU HAVE YOUR 40 MINUTES.

THAT'S NOT A CORRECT ME.

MODIFICATIONS. ARE THOSE ALLOWED? I MEAN, I HAVEN'T HAD A CHANCE TO GLANCE AT THIS OR MEMORIZE IT.

A TWO MINUTE PITCH. SO HE SAYS HE'S IN SUPPORT.

BUT IF THIS MODIFICATION IS IS ADDED, IT'S NOT IN THE ORIGINAL TWO MINUTE PITCH.

AND SO I DON'T KNOW HOW TO CAPTURE THAT.

WELL, IT'S ALWAYS BEEN A LITTLE BIT UNCLEAR.

I THINK THAT'S ONE OF OUR ONGOING ISSUES, IS THAT WE GET INCOMPLETE DIRECTION FROM COUNCIL BECAUSE DIFFERENT COUNCIL MEMBERS GIVE A DIFFERENT INPUT.

SO YEAH, THE MOST THE MOST CLEAR PROCESS WOULD BE YES OR NO ON THE PITCH.

GOT IT. OKAY. SO IF YOUR ANSWER HOLDS TRUE, OBVIOUSLY YOU HAVE 40S IF YOU WANT TO MODIFY THAT.

BUT AS YOUR ANSWER HOLDS TRUE AS BY THE DOCUMENTED ORDINANCE WE HAVE, YOU'RE A NO.

SO I'M JUST LETTING YOU KNOW HOW I'M COUNTING YOU.

DO YOU WANT YOUR 40S? YES. I DON'T NEED ALL 40S.

IT'S JUST MY POSITION IS WHAT I STATED.

I THINK STAFF UNDERSTANDS IT.

OKAY. YEAH. AND IT'S.

AND SO I'M GOING TO DIRECT STAFF TO FOLLOW THE CODE AS WRITTEN.

AND I'M GOING TO TRACK THAT AS A NO.

ANYONE ELSE COUNCILWOMAN BYRD TRACK ME AS A YES.

BUT I HAVE A QUESTION AS WELL.

I UNDERSTAND THAT WE'RE GOING TO HAVE A SEAT AT THE TABLE, BUT I'M NOT UNDERSTANDING WHAT THE TABLE IS.

WHAT DOES THAT MEAN? OKAY.

WE'RE HAVING A SEAT AT THE TABLE.

WE CAN'T ASK QUESTIONS AGAIN.

SORRY. WELL, HE'LL FOLLOW UP WITH YOU DURING THE BREAK, SO COUNCIL MEMBER WATTS CAN CAN TOUCH ON THAT AGAIN, AS IS WRITTEN, WE CAN'T ASK QUESTIONS.

ANSWER QUESTIONS. I UNDERSTAND, I'M JUST IT'S ROUGH OUT THERE, SO I'VE GOT TO FOLLOW THE RULES.

ANYONE ELSE? MAYOR PRO TEM, FIRST, I'LL SAY THANK YOU FOR FOLLOWING THE RULES.

I APPRECIATE YOU TRYING TO THREAD THE NEEDLE.

IT'S HARD. SO I.

AND I KNOW I'M DIPPING INTO MY ONE MINUTE.

I WILL SAY THAT WE HAD THIS WE HAD WE HAD A VOTE.

WE HAD A WORK SESSION. WE HAD A VOTE ON IT.

I'VE LEARNED SOME ADDITIONAL THINGS, LIKE DOJ HAS TOLD ME THAT THEY HAVE SUFFICIENT EXCESS CAPACITY AND INFRASTRUCTURE IN THESE PROJECTS, AND THEY'RE WILLING TO, YOU KNOW, FOLLOW OUR BUMPER RAILS AND NEGOTIATIONS.

SO I DON'T SEE THE NEED TO CREATE THE INFRASTRUCTURE FOR US AT THIS TIME WHEN THE INFRASTRUCTURE ALREADY EXISTS IN THE DA, THE DA AND DENTON ISD.

SO I THINK, YOU KNOW, MY MINE IS A NO AT THIS TIME.

COUNCIL MEMBER HARLAN. GO RIGHT AHEAD.

YES, SIR. YEAH, THAT'S MY ANSWER.

YES. OKAY. OH.

I DIDN'T EVEN SEE THE NEED TO TURN ON MY MICROPHONE, ALTHOUGH IT'S ON.

[01:15:03]

GOT IT. OKAY, THEN I WILL BE THE FOURTH.

YES. TO HAVE THIS DISCUSSION AGAIN.

FOR THOSE TRACKING ALONG, IT'S WELL DOCUMENTED IN THE ANSWERS FOR WHAT WE ASK.

AND SO IF YOU LOOK AT THE AGENDA YOU ARE ONLINE YOU'D HAVE THAT.

BUT HERE'S WHAT I'LL SAY.

AN EXAMPLE FOR ME AND WHY TO HAVE THIS CONVERSATION IS IF A DEVELOPER COMES TO THE HOUSING AUTHORITY, ONE HOUSING AUTHORITY IS FOCUSED ON LOWER INCOME ONLY.

THAT'S THEIR FOCUS. AND I WANT THAT MISSING MIDDLE THE ALISON HOUSEHOLDS THAT THE UNITED WAY STATES, 102,000 FAMILIES FALL INTO THAT MIDDLE CHECK TO CHECK.

AND THAT'S WHO I'M TRYING TO SERVE.

THAT'S WHO I'M TRYING TO REACH.

AND IF A DEVELOPER CAN'T GET ALONG WITH THE HOUSING AUTHORITY, THEY END UP AT OUR CITY COUNCIL MEETING AND WE CAN'T DO ANYTHING ABOUT IT BECAUSE WE DON'T HAVE A SEAT AT THE TABLE.

THIS GIVES US AN OPPORTUNITY.

IF SOMEONE SAYS, HEY, I'VE TALKED TO THESE PEOPLE CAN'T BREAK THROUGH.

DO SOMETHING. CITY COUNCIL GIVES US SOMETHING, A TOOL.

SO ALL RIGHT, SO THAT'S COUNCIL MEMBER WATTS, BYRD COUNCILMEMBER HOLLAND, MYSELF IN THE AFFIRMATIVE.

MAYOR PRO TEM AND COUNCILMAN MELTZER IN THE IN THE NON AFFIRMATIVE WHATEVER THE TECHNICAL TERM FOR THAT IS THAT CONCLUDES THAT ITEM TAKES US TO CLOSED

[1. Closed Meeting:]

SESSION AND.

OH, I HAVE THAT HERE.

WE'LL TAKE. I'LL TAKE US INTO CLOTHES AND WE'LL TAKE A BREAK BECAUSE WE HAVE FOUR ITEMS. THE CITY COUNCIL AT 3:17 P.M.

CONVENED IN CLOSED MEETING TO DELIBERATE THE CLOSED MEETING.

ITEMS SET FORTH ON THE AGENDA, WHICH INCLUDE THE FOLLOWING ITEM A ID 231978.

DELIBERATIONS REGARDING REAL PROPERTY UNDER TEXAS GOVERNMENT GOVERNMENT CODE SECTION 551.072, ITEM D23246.

DELIBERATIONS REGARDING REAL PROPERTY UNDER TEXAS GOVERNMENT CODE SECTION 551.072.

ITEM C, ID 232169.

CONSULTATION WITH ATTORNEYS UNDER TEXAS GOVERNMENT CODE SECTION 551.071 AND ITEM D, ID 232222.

CONSULTATION WITH ATTORNEYS UNDER TEXAS GOVERNMENT CODE SECTION 551.071.

AND SO WE'RE NOW IN CLOSED.

WE'LL TAKE A TEN MINUTE BREAK.

LET'S COME BACK 327 AND WE'LL GET STARTED.

AND THEN WE'LL, WE'LL CLOSE THE, THE WINDOW AND OH GOT IT.

AND, AND THAT WINDOW.

SO SO DO I NEED TO COME BACK OUT.

IS THAT HOW THAT WORKS. OKAY.

WE CAN DO IT ON BREAK. YEAH. WHAT ARE WE DOING? YEAH. OKAY.

GOT IT. SO YEAH, WE'LL BE BACK 327 AND CLOSED, BUT.

OKAY. AND CITY COUNCIL NOW AT 5:30 P.M.

IS RECONVENED FROM CLOSED SESSION AND NO OFFICIAL ACTION WAS TAKEN.

THAT THEN TAKES US TO OUR.

WE'RE JUST GOING TO GO STRAIGHT TO CONSENT.

[3. CONSENT AGENDA]

AND BECAUSE THIS IS A SPECIAL CALLED MEETING AND I WILL NOTHING WAS PULLED.

WE WERE GIVEN A NOTE ABOUT THE ONE ITEM AND I'LL TAKE A MOTION.

COUNCILMAN MELTZER.

YEAH, I MOVE APPROVAL OF THE CONSENT AGENDA.

I DON'T ACTUALLY RECALL THE NOTE.

DO YOU NEED ME TO CITE THAT? YES. SO THAT'S ITEM V IS ACTION TO OPT OUT.

SO ITEM V, WHICH IS WHICH IS CONSIDERED APPROVAL OF RESOLUTION OF THE CITY OF DENTON OPTING OUT OF PROPOSED CLASS ACTION BECAUSE IT'S ADDED.

YEAH, YEAH. OKAY.

SO I MOVE APPROVAL OF THE CONSENT AGENDA, INCLUDING THE GOLLY INCLUDING ITEM V.

YEAH. OKAY.

MAYOR PRO TEM SECOND, ANY DISCUSSION? THERE'S A MOTION AND A SECOND LET'S VOTE ON THE SCREEN.

THAT PASSES 6 TO 0 TAKES US TO OUR FIRST INDIVIDUAL CONSIDERATION ITEM, WHICH IS.

[A. Consider adoption of an ordinance of the City of Denton adopting a schedule of fees, updating the existing charges and fees for use of city owned property and facilities, and for city services provided at or by parks and recreation department; superseding prior fee schedules; providing severability and repealer clauses; and providing for an effective date.]

ID 231863.

CONSIDER ADOPTION OF AN ORDINANCE OF THE CITY OF DENTON ADOPTING A SCHEDULE OF FEES, UPDATING THE EXISTING CHANGES, APARTMENT CHARGES AND FEES FOR USE OF CITY OWNED PROPERTY AND FACILITIES, AND FOR CITY SERVICES PROVIDED AT OR BY PARKS AND RECREATION DEPARTMENT.

HELLO. GOOD EVENING.

MATT HAMILTON, BUDGET MANAGER, HERE TO PRESENT THE PROPOSED FISCAL YEAR 2324 PARKS AND RECREATION SCHEDULE OF FEES.

THIS IS A THE SAME PRESENTATION THAT WAS PRESENTED AT COUNCIL ON OCTOBER 24TH DURING WORK SESSION.

[01:20:06]

AND AND THEN STAFF DID FOLLOW UP ON NOVEMBER 9TH IN THE STAFF REPORT.

SO AGAIN, JUST THE PROCESS THAT WE'VE USED FOR EVALUATING PARK FEES.

THE FEES ARE REVIEWED ANNUALLY.

WE GATHER FINANCIAL DATA TO INPUT INTO THE COST OF SERVICE MODEL, WHICH WAS DEVELOPED IN 2020 AND ADOPTED BY COUNCIL AT THAT TIME. WE EVALUATE THE CURRENT FEES, THE CURRENT COST RECOVERY PERCENTAGES, TARGET COST RECOVERY PERCENTAGES, AND THE IMPACT THAT THE PROPOSED FEES MAY HAVE ON THE COMMUNITY, AND THEN PROPOSED FEES ARE REVIEWED BY THE PARKS AND RECREATION AND BEAUTIFICATION BOARD AND ULTIMATELY APPROVED BY CITY COUNCIL.

SO AGAIN, THIS IS A VISUAL REPRESENTATION OF THE PARK'S COST OF SERVICE MODEL THAT WAS DEVELOPED IN 2020.

THE RED LINE REPRESENTS THE COST RECOVERY RATE, WITH THE LOWER LEFT HAND CORNER REPRESENTING COMMON GOODS, FOR WHICH THERE IS NOT A COST RECOVERY. THESE WOULD BE THINGS LIKE OPEN PARK SPACE AND TRAILS ALL THE WAY UP TO THE UPPER RIGHT HAND CORNER, WHICH HAS 100% COST RECOVERY FOR RESALE ITEMS. THESE WOULD BE ITEMS THAT WOULD BE INCLUDED IN CONCESSION SALES, FOR EXAMPLE.

SO EACH OF THE PARKS, PROGRAMS AND ACTIVITIES ARE ASSIGNED A SERVICE CATEGORY WITHIN THIS MODEL.

AGAIN, THIS IS JUST ANOTHER WAY TO TO VISUALIZE THE COST OF SERVICE MODEL WITH OPEN ACCESS THERE AT THE BOTTOM, WITH THE 0% COST RECOVERY GOAL AND RESELL ITEMS AT THE TOP WITH 100% COST RECOVERY GOAL.

AND WHILE THESE ARE TARGETS, I WOULD NOTE THAT YOU KNOW, THE ULTIMATE FEES THAT ARE PRESENTED.

THERE'S OTHER FACTORS THAT ARE INCLUDED.

SO, YOU KNOW, TAKING A LOOK AT BENCHMARKING WITH OTHER CITIES THAT HAVE SIMILAR AMENITIES AND AGAIN, IMPACTS ON THE COMMUNITY.

SO THE PROPOSED RATE CHANGES IN THE SERVICE CATEGORY OF DROP IN ACCESS.

YOU CAN SEE THE CURRENT COST RECOVERY PERCENTAGES THERE FOR THESE ITEMS AND THE PROPOSED COST RECOVERY PERCENTAGES.

ALL OF ALL OF THEM ARE WITHIN THE STATED COST RECOVERY GOAL FOR THIS CATEGORY OF 25 TO 50%.

THE WATERWORKS PARK DAILY ADMISSION.

JUST BEING THERE AT 51%.

BUT WITH ANTICIPATED INCREASED COSTS IN THE COMING YEAR, WE ANTICIPATE THAT THAT WILL FALL WITHIN THE COST RECOVERY RANGE.

IN THE SERVICE CATEGORY OF RENTALS.

THE COST RECOVERY GOAL IS 70 TO 100%.

THE CURRENT COST RECOVERY ON THE TOP SIX ITEMS IS 80%, WITH A PROPOSED COST RECOVERY OF 94% AND THEN THE BOTTOM TWO ITEMS, THE FACILITY RENTALS AND THE BUILDING ATTENDANT BEING 63% AS A CURRENT COST RECOVERY AND INCREASING THAT TO 65%.

ADDITIONALLY IN THE SERVICE CATEGORY OF RESALE, INCREASING THE MEMORIAL BENCH FROM A CURRENT COST RECOVERY OF 70% TO 100%. THIS IS A BENCH THAT AN INDIVIDUAL WOULD PURCHASE AS A MEMORIAL, AND THE $3,400 COST INCLUDES THE CONCRETE PAD AND THE INSTALLATION AND THE AND THE BENCH ITSELF, ALONG WITH A PLAQUE.

ADDITIONAL PROPOSED FEE CHANGES INCLUDE A NONRESIDENT FEE, OUTSIDE CATERING FEE FOR THE WATERWORKS PARK, AND THEN A CLEANING FEE FOR FACILITY RENTALS THAT OCCUR AFTER HOURS.

AND THEN PROPOSED REMOVAL OF RATES.

WE WOULD PROPOSE REMOVING THE $45 AN HOUR POLICE SECURITY LINE FROM THE PARKS SCHEDULE OF FEES, BECAUSE THIS IS DICTATED BY THE SCHEDULE OF FEES FROM POLICE, AND SO THEY DETERMINE THEIR HOURLY RATES FOR OFFICERS AND THEN THE REMOVAL OF THE NATATORIUM THREE MONTH PASS JUST DUE TO UNDERUTILIZATION.

ANY QUESTIONS? OKAY. QUESTIONS FOR STAFF.

COUNCILMAN. THANK YOU.

TELL ME HOW MANY OF THE MEMORIAL BENCHES HAVE BEEN PLACED AND WHERE.

I'M JUST NOT FAMILIAR WITH THAT.

YEAH. LET ME ASK CAROLINE TO COME DOWN.

HI CAROLINE STUART, BUSINESS ADMINISTRATION MANAGER FOR PARKS AND RECREATION.

WE PLACED ONE MEMORIAL BENCH THIS LAST YEAR, AND IT WAS PLACED OUT AT NORTH LAKES DOG PARK IN MEMORIAL OF A RUNNER WHO RECENTLY PASSED AWAY.

[01:25:04]

OKAY, SO IT'S JUST ONE THIS LAST FISCAL YEAR.

YES. THANK YOU.

EASY ANSWER. OKAY.

ANY OTHER QUESTIONS? SEEING NONE. I'LL TAKE A MOTION.

MAYOR PRO TEM, I'M GOING TO GO AHEAD AND MOVE APPROVAL.

BUT I'M GOING TO REMIND STAFF ABOUT THE DISCUSSION WE HAD THE LAST TIME IN THE WORK SESSION, ESPECIALLY ON THE AQUATICS FEES.

REALLY MAKE SURE THAT WE ARE NOT SUPPRESSING THE AUDIENCE WITH THE FEE STRUCTURES THAT WE HAVE.

SO BUT OTHERWISE I'LL MOVE APPROVAL.

COUNCILMEMBER HOLLAND, SECOND THE MOTION.

WE HAVE A MOTION BY MAYOR PRO TEM.

SECOND BY COUNCILMEMBER HOLLAND.

ANY OTHER DISCUSSION? COUNCILOR MELTZER? YEAH, JUST I APPRECIATE THE HARD WORK AND AND I, I VERY MUCH SUPPORT THE FRAMEWORK AND THE METHODOLOGY AS MY JUST WITH MY INPUT IN, IN WORK SESSION WHERE WE'RE NOT REALLY MOVING IN ANY MEANINGFUL WAY INTO THE TARGET RANGE OF COST RECOVERY.

I'M NOT IN FAVOR OF THESE BIG JUMPS IN FEES OF MORE THAN $5, AND SO I'LL BE VOTING NO.

I'D PREFER WE TAKE A SHARP PENCIL TO IT AGAIN, BUT THAT'S THAT'S JUST WHERE I AM.

ANY OTHER DISCUSSION.

LET'S VOTE ON THE SCREEN. AND THAT PASSES FIVE ONE TAKES US TO ITEM B, ID 232117.

[B. Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager to execute a Construction Manager at Risk contract with Sundt Construction, Inc., for construction phase services for Neighborhood 2 and 6 Improvements for the Capital Projects Department; providing for the expenditure of funds therefor; and providing an effective date (RFQ 8055 - awarded to Sundt Construction, Inc., including the first Guaranteed Maximum Price in the partial not-to-exceed amount of $13,889,600.00).]

CONSIDER ADOPTION OF AN ORDINANCE OF THE CITY OF DENTON, A TEXAS HOME RULE MUNICIPAL CORPORATION AUTHORIZING THE CITY MANAGER TO EXECUTE A CONSTRUCTION MANAGER AT RISK CONTRACT WITH SUNDT CONSTRUCTION, INC FOR CONSTRUCTION PHASE SERVICES FOR NEIGHBORHOOD TWO AND SIX IMPROVEMENTS FOR CAPITAL PROJECTS DEPARTMENT.

GOOD EVENING, MAYOR AND COUNCIL SETH GARCIA, DEPUTY DIRECTOR OF CAPITAL PROJECTS.

THIS EVENING WE HAVE BEFORE YOU THE CONSTRUCTION PHASE CONTRACT FOR NEIGHBORHOOD TWO AND SIX.

THIS IS GUARANTEED MAXIMUM PRICE NUMBER ONE.

SO FOR A QUICK OVERVIEW OF THE ENTIRE PROJECT.

SO NEIGHBORHOOD TWO AND SIX ENCOMPASSES ABOUT 118 ROADWAY SEGMENTS.

IT'S OUTLINED THERE IN THE BLUE.

WE'RE DOING ROUGHLY 31,000 LINEAR FEET OF WATER.

MAIN REPLACEMENT 28,000 LINEAR FEET OF WASTEWATER.

MAIN REPLACEMENT. WE'RE DOING MINI SIDEWALK CONNECTIVITY ASSESSMENTS, AND WE'RE INCLUDING PHOTOMETRIC STUDIES AND SOME LIGHTING DESIGN AND INSTALLATION.

AND JUST A REMINDER, THIS IS OUR SECOND CONSTRUCTION MANAGER AT RISK PROJECT FOR HORIZONTAL.

SO MORE SPECIFICALLY FOR GNP NUMBER ONE, IT'S GOING TO BE THE 15 ROADWAY SEGMENTS THAT YOU SEE THERE IN RED.

WITH THOSE, WE'RE DOING APPROXIMATELY 6000 LINEAR FEET OF WASTEWATER.

MAIN REPLACEMENT.

A LITTLE OVER 1800 SQUARE YARDS OF SIDEWALK REPLACEMENT.

AND ONCE AGAIN, WE'RE INSTALLING CONDUIT AND POOL BOXES FOR STREET LIGHTING THAT IS GOING TO COME IN AND INSTALL AFTER WE'RE COMPLETE.

SO FOR A REMINDER HOW WE GET TO A GUARANTEED MAXIMUM PRICE.

SO NEIGHBORHOOD TWO AND SIX WAS SEPARATED INTO EIGHT DIFFERENT WORK CATEGORIES THAT YOU CAN SEE LISTED OUT THERE ARE AT RISK SUNK CONSTRUCTION THEN PUBLICLY BIDS THOSE THAT WORK FOR COMPETITIVE PRICING.

WE HELD INTERVIEWS WITH THE TO RANK WITH THOSE HIGHEST RANKING FIRMS, AND WE CONVERTED THOSE PRICES TO LUMP SUM PACKAGES.

SON CONSTRUCTION THEN PROVIDED A GNP BASED ON OUR SUBCONTRACTOR BIDS.

GENERAL CONDITIONS COST ARE BOND AND INSURANCE REQUIREMENTS, THE CONTINGENCY AND THE CONTRACTOR'S FEE THAT WAS NEGOTIATED IN THEIR RFP.

SO IN THIS SLIDE WE GET A LITTLE BIT FURTHER INTO THOSE COSTS.

SO AS YOU CAN SEE IN THAT TOP SECTION WE HAVE WORK CATEGORIES ONE THROUGH EIGHT.

AND OUR GENERAL WORK ITEMS THAT $9.6 MILLION TOTAL THAT YOU SEE THERE IS THE TOTAL COST OF THE WORK.

THE NEXT SECTION COVERS ALLOWANCES.

SO THESE ARE RISKS THAT WE'VE IDENTIFIED WITHIN THE PROJECT THAT WE'RE CARRYING ADDITIONAL FUNDS IN CASE WE NEED TO MITIGATE SOME OF THOSE ACTIONS.

THIS SECTION WILL REVERT BACK TO THE CITY THOSE FUNDS IF THEY ARE NOT USED.

AND THEN THAT FINAL SECTION SHOWS THE CONTINGENCY, THE CONSTRUCTION FEE AND THEIR GENERAL CONDITIONS COST FOR THIS FIRST PACKAGE.

SO IN TOTAL WE'RE JUST OVER 13.4 MILLION FOR GMP NUMBER ONE.

QUICKLY FOR THE SCHEDULE, SO THE DESIGN AND SEEMA WAS APPROVED IN NOVEMBER OF 2022.

WITH Y'ALL'S APPROVAL TONIGHT, WE'RE ANTICIPATING A NOTICE TO PROCEED IN DECEMBER OF NEXT NEXT MONTH, ESSENTIALLY.

AND CONSTRUCTION COMPLETION FOR PACKAGE ONE WILL BE DONE BY APRIL OF 25.

SO WITH THAT, WE RECOMMEND ADOPTION WITH CONSTRUCTION AND THE AMOUNT OF 13.889 MILLION.

[01:30:02]

THAT DOES INCLUDE THE GMP NUMBER ONE AND A LITTLE OVER 400,000 FOR A OWNERS CONTINGENCY.

AND I CAN TAKE ANY QUESTIONS.

OKAY. MAYOR PRO TEM THANK YOU, MR. MAYOR. SO WERE THOSE ALLOWANCES IN THE LIST THAT YOU SHOWED US? DO THEY INCLUDE THINGS LIKE.

I KNOW THAT FOR SOME OF THE THE PREVIOUS RECONSTRUCTIONS, WE HAD HAD VARIOUS SERVICES LOWERED AN ADDITIONAL TWO FEET BECAUSE OF PRIOR DESIGN, WAS NOT FOLLOWED FOR FOR REASONS THAT I YOU KNOW, I'M NOT TRYING TO RELITIGATE IT HERE AT THE DYESS BUT BUT THAT'S STILL AS WE ENCOUNTER THESE SAME TYPES OF INTERSECTIONS IN OTHER NEIGHBORHOODS, ARE ANY OF THOSE ALLOWANCES, INCLUDING THAT ADDITIONAL COMPONENT THAT BEFORE WE CAN GET INTO THE STREETS AND THE SEWER AND EVERYTHING ELSE? YEAH. SO WE DON'T CARRY THOSE WITHIN THIS CONTRACT BECAUSE TYPICALLY WE GO TO EITHER THE FRANCHISE FOLKS OR OUR INTERNAL STAKEHOLDERS TO DO THOSE LINE LOWERING.

SO WE WON'T TYPICALLY COMPENSATE THE CONTRACTOR IF THEY'RE REPLACING THE WORK WITH THE CONTRACT, WE WOULD EXPECT FOR IT TO BE AT WHATEVER THE MINIMUM DEPTH REQUIREMENT IS.

SO. I WOULD SAY OCCASIONALLY WE WOULD COMPENSATE THE CONTRACTOR IF THERE'S A LOWERING THAT THEY DO.

OTHERWISE WE WOULD BE WORKING WITH ATMOS OR CHARTER OR OUR INTERNAL WATER DEPARTMENT TO LOWER THOSE LINES AND AND CLEAR THOSE CONFLICTS.

OH, BUT BUT WHO BEARS THE THE COSTS OF THE LOWERING ITSELF? IS IT IS IT THIS CONTRACT OR THE CITY AND ABSORBS IT.

YEAH. SO IF IT'S A FRANCHISE PERSON THAT WOULD FALL ON THEM TO RELOCATE, IF IT'S NOT TO PROPER DEPTH, IF IT'S WITH THE WATER DEPARTMENT, TYPICALLY WE'LL EITHER PROVIDE THEM THE PROJECT FUNDING ACCOUNT SO IT WON'T ACTUALLY COME OUT OF THE CONTRACT AMOUNT, BUT IT'LL COME OUT OF THE PROJECT ACCOUNT OR THEY'LL JUST GO AHEAD AND RELOCATE AS A MAINTENANCE EFFORT.

IF IT'S IF IT'S NOT TO PROPER DEPTH.

OKAY. ALL RIGHT, I APPRECIATE THAT.

THANK YOU, MR. MAYOR. OKAY.

ANY OTHER QUESTIONS FOR STAFF? COUNCILMEMBER MELTZER, I THINK I THINK IT'S A SIMPLE YES, BUT WHEN WE UNDERTAKE THESE SEGMENTS, DO WE DO WE PLAN OUT ALTERNATE ROUTES IN AND OUT FOR THE PEOPLE ON THESE STREETS? I'M JUST LOOKING AT THIS, AND I KNOW THAT I'M GOING TO GET A LOT OF GRIEF FROM MY NEIGHBORS, AND I NEED TO EXPLAIN TO THEM THAT HAVING STREETS GET FIXED IS BETTER THAN HAVING THEM BE IN BAD SHAPE.

THAT'S NOT ALWAYS CLEAR TO PEOPLE.

BUT THE OTHER ISSUE IS, DO THEY HAVE AN ESCAPE ROUTE? AND SOME OF THEM, SOME OF IT LOOKS PRETTY TOUGH, LIKE LIKE HOUSTON STREET.

YOU KNOW, IT LOOKS LIKE IT'S KIND OF BOOKENDED.

HOW DO THEY GET IN AND OUT? YOU DO LIKE A LANE AT A TIME OR HOW DOES THAT WORK? YEAH. SO SIMPLE ANSWER.

YES, BUT WE WILL WORK WITH THE CONTRACTOR FOR TRAFFIC CONTROL AND PHASING PLANS.

SO OF COURSE AS WE GO THROUGH CONSTRUCTION THE STREETS WILL BE OPEN TO LOCAL TRAFFIC.

SO A CITY DENTON EXPECTATION IS YOU STILL HAVE ACCESS TO YOUR HOME.

IF WE'RE EVER GOING TO BLOCK ACCESS, WE WILL NOTIFY YOU UP TO 48 HOURS PRIOR TO TO LET YOU KNOW WE'RE GOING TO BE WORKING IN FRONT OF YOUR HOUSE.

CAN YOU PLEASE PARK DOWN THE STREET A COUPLE OF BLOCKS WHILE WE REPORT YOUR DRIVEWAY? SO WE'LL WORK WITH THE CONTRACTOR ON THAT AS FAR AS ALTERNATE ROUTES.

SO WE'LL TYPICALLY BLOCK IT OFF DURING THE DAY WHILE WE'RE WORKING THERE, AND THEN WORK TO OPEN IT UP AT NIGHT.

BUT AGAIN, THAT IS NOT BLOCKING THE LOCAL TRACKS, THE LOCAL TRAFFIC FROM ACCESSING THEIR HOMES.

THANK YOU, COUNCILMAN HARLAN.

THANK YOU. SLIDE NUMBER SIX.

NOW, I LOST IT. THERE IT IS.

I WAS SURPRISED TO SEE PERFORATED SUB DRAIN DRAINS.

IS IS THAT WHAT I USED TO CALL A FRENCH DRAIN? YES. YOU'RE CORRECT.

AND SO WE'RE NOT NECESSARILY INSTALLING THOSE WITH THIS PROJECT.

THIS IS JUST A GRAPHIC THAT WE LIKE TO SHOW AT OUR PUBLIC MEETINGS FOR ALL THE DIFFERENT THINGS THAT WE EVALUATE AND LOOK FOR WHEN WE DO THESE PROJECTS, A LOT OF TIMES THE PUBLIC DOESN'T UNDERSTAND HOW MUCH IS ACTUALLY UNDERNEATH THE ROADWAY AND IN THE PARKWAYS.

SO THIS IS JUST A GOOD DESCRIPTION OF DIFFERENT THINGS THAT COULD BE WITHIN THE CITY'S RIGHT OF WAY.

OKAY. TO THAT, TO THAT POINT WHEN, WHEN WOULD YOU USE THAT OR OR WHEN WOULD YOU ABSOLUTELY NOT USE THAT.

SO THE SUB DRAIN THE FRENCH DRAIN.

SO WE'VE RAN INTO INSTANCES WHERE WE'VE CROSSED NATURAL SPRINGS.

AND AS WE DUG AND EXCAVATED THE LEAST PATH RESISTANCE IS FOR WATER TO COME UP ONCE WE DO THAT.

SO WE'VE HAD DIFFERENT PLACES TOO, WHERE WE'VE HAD TO INSTALL A FRENCH DRAIN ON TOP OF AN EXISTING UTILITY LINE OR WITHIN OR BENEATH THE SUBGRADE, AND ACTUALLY RUN THAT FRENCH DRAIN TO AN INLET SO THE WATER DOESN'T CONTINUE TO SURFACE UP THROUGH THE ROADWAY.

HOW LONG HAS THAT BEEN? A A MATTER OF COURSE.

UM, I WOULD SAY IT'S ON A CASE BY CASE BASIS.

BUT IN THE DID YOU DO IT 20 YEARS AGO? THAT I'M NOT SURE, BUT I KNOW OF A FEW INSTANCES WITHIN THE LAST.

[01:35:04]

YEAH, YEAH, IT WAS WITHIN THE LAST 12 TO 24 MONTHS WHERE WE HAVE INCLUDED THAT IN A PROJECT AS A MITIGATION.

OKAY. VERY GOOD, VERY GOOD.

THANK YOU. I'M KIDDING.

NO OFFENSE. OKAY.

ANY OTHER QUESTIONS? COUNCILMAN. BYRD. WHEN DO YOU ALL HAVE AN OPPORTUNITY TO REPLACE A SIDEWALK WITH THIS PROJECT? OR OUR SIDEWALKS INCLUDED IN THIS PROJECT? YEAH. SO WHEN WE DO THE DESIGN, WE ACTUALLY GO OUT WITH THE ENTIRE TEAM, OUR, OUR DESIGN ENGINEER AND DO CONDITION BASED ASSESSMENTS AS WELL AS CHECK FOR ADA REQUIREMENTS.

SO ANYTHING THAT'S NOT ADA THAT'S TOUCHING THE ROADWAY, SPECIFICALLY RAMPS, WE'RE REQUIRED BY LAW.

WHEN WE TOUCH THE ROADWAY, WE REPLACE IT AND MAKE IT ADA COMPLIANT.

THE REST OF THE SIDEWALK SEGMENT, JUST BECAUSE THOSE SIDEWALK FUNDS WEREN'T NECESSARILY INCLUDED WITH THE BOND.

WE'RE INCLUDING CONDITION BASED.

SO IF IT'S LARGE CRACKS, LIPS OVER A QUARTER OF AN INCH, AND WE'RE TRYING TO REPLACE THOSE.

SO IT'S NOT NECESSARILY FULL REPLACEMENT ALL THE TIME, BUT WE'RE DOING OUR BEST TO CATCH ALL THE ADA STUFF AS WE COME THROUGH THERE.

YES, MA'AM. OKAY.

ANY OTHER QUESTIONS? COUNCILOR WATTS.

I'LL MOVE FOR APPROVAL.

COUNCILOR METZLER. SECOND.

WE HAVE A MOTION AND A SECOND.

ANY OTHER DISCUSSION? LET'S VOTE ON THE SCREEN. IT PASSES SIX ZERO.

THANK YOU. TAKES US TO OUR NEXT ITEM C WHICH IS ID 232133.

[C. Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager to execute a contract with Stealth Partner Group, LLC, for Individual and Aggregate Stop Loss (Reinsurance) Insurance coverage for the Human Resources Department; providing for the expenditure of funds therefor, and providing an effective date (RFP 8339 - awarded to Stealth Partner Group, LLC, for three (3) years, with the option for two (2) additional one (1) year extensions, in the total five (5) year not-to-exceed amount of $38,864,326.00).]

CONSIDER ADOPTION OF AN ORDINANCE OF THE CITY OF DENTON, A TEXAS HOME RULE MUNICIPAL CORPORATION AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT WITH STEALTH PARTNER GROUP, LLC FOR INDIVIDUAL AND AGGREGATE STOP LOSS REINSURANCE INSURANCE COVERAGE.

GOOD EVENING, MAYOR AND CITY COUNCIL MEGAN GILBREATH, DIRECTOR OF HUMAN RESOURCES.

THIS ITEM IS A CONTRACT AWARD FOR STEALTH PARTNER GROUP FOR OUR STOP LOSS INSURANCE FOR THE CITY'S SELF-INSURED MEDICAL PLAN AND PROVIDING A BIT OF BACKGROUND, OUR CURRENT CONTRACT WITH UHC ENDS DECEMBER 31ST OF THIS YEAR.

STOP LOSS PROTECTS THE CITY'S SELF-FUNDED HEALTH PLAN FROM CATASTROPHIC HEALTH CLAIMS, PROVIDED BY PROVIDING A CAP ON THE AMOUNT OF HEALTH CLAIMS PAID BY COVERED MEMBERS.

THE COVERAGE INCLUDES BOTH INDIVIDUAL STOP LOSS AND AGGREGATE STOP LOSS COVERAGE.

OUR CURRENT THRESHOLD FOR INDIVIDUAL STOP LOSS INSURANCE COVERAGE IS A REIMBURSEMENT OF 185,000, AND THAT IS BASED ON A PER MEMBER PER MONTH PREMIUM OF $188.85.

THE AGGREGATE STOP LOSS INSURANCE REIMBURSEMENT BEGINS ONCE OUR TOTAL EXPECTED CLAIMS COST FOR THE ENTIRE PLAN YEAR HAS EXCEEDED 25%, AND THAT IS PAID AT A CURRENT RATE OF $4.82 PER MEMBER PER MONTH.

WE ISSUED AN RFP IN AUGUST OF 2023.

WE RECEIVED ONE BID FROM STEALTH PARTNER GROUP AND THAT INCLUDED FOUR COMPANIES, ONE OF WHICH WAS UHC.

UHC S PROPOSAL PROVIDES THE LOWEST OVERALL COST, WITH AN OVERALL INCREASE OF 7.43% COMPARED TO OUR CURRENT RATES IN THE PROPOSALS THAT WE REQUESTED. THERE WERE OTHER REIMBURSEMENT VALUES INCLUDED OF 185,200, 225 AND $250,000 THRESHOLD LEVELS.

BUT AFTER REVIEW OF OUR AVERAGE CLAIMS EXPERIENCE, IT WOULD OFFSET THE PRIOR YEAR.

DATA DOES NOT SUPPORT THE INDIVIDUAL STOP LOSS LEVEL OF AN INCREASED VALUE, SO WE RECOMMEND STAYING AT THE $185,000 THRESHOLD.

WE RECOMMEND, EXCUSE ME, AWARDING A CONTRACT WITH UHC THROUGH THE STEALTH PARTNER GROUP FOR INDIVIDUAL AND AGGREGATE STOP LOSS INSURANCE COVERAGE FOR FIVE YEARS IN THE NOT TO EXCEED AMOUNT OF $38,864,326.51.

THIS AMOUNT DOES INCLUDE AN EXPECTED INCREASE OF A 5% ENROLLMENT YEAR OVER YEAR, AS WELL AS AN ESTIMATED 20% RATE INCREASE YEAR OVER YEAR, WITH A BUILT IN 10% CONTINGENCY.

HOWEVER, OUR CONTRACT RENEWAL DOES GO UP TO 40%.

HOWEVER, THIS EXPERIENCE WOULD BE UNLIKELY AND WOULD BE THE RESULT OF A PRIOR POOR CLAIMS EXPERIENCE.

STOP LOSS IS CONTRACTED FOR MULTIPLE YEARS TO PROTECT THE PLAN, BUT IT IS TAKEN TO MARKET ANNUALLY.

AND WITH THAT, I'LL ANSWER ANY QUESTIONS.

COUNCILMAN WATTS.

YES, MEGAN.

ON THE ON THE MILLION DOLLAR AGGREGATE CAP.

YES. OKAY, SO IF WE WERE SELF-INSURED.

SO WE'VE GOT HELP ME UNDERSTAND HOW THAT KICKS IN.

IF WE HAVE 25% ABOVE WHAT.

SO THE 125% VALUE OF THE EXPECTED RENEWAL IS 38,654,000 APPROXIMATELY.

[01:40:05]

SO IF IT GOES ABOVE THAT AMOUNT, WE WOULD RECEIVE FULL REIMBURSEMENT UP TO AN ADDITIONAL MILLION DOLLARS.

NOW, THE INDIVIDUAL STOP LOSS THRESHOLD IS STILL GOING TO PAY FOR THOSE OTHER CLAIMS IN PARALLEL.

THAT DOESN'T STOP.

SO THAT WILL CONTINUE.

THE AGGREGATE JUST STOPS.

IT GIVES US AN EXTRA MILLION DOLLAR BUFFER BEFORE WE HAVE TO PAY ADDITIONAL CLAIMS. HAVE WE EVER HAD TO USE THAT? HAS IT HAVE NOT? OKAY.

WHAT ABOUT THE STOP LOSS ON THE INDIVIDUAL? IS THAT FAIRLY COMMON? YES. SO WE ACTUALLY IN OUR CLAIMS EXPERIENCE, WE AVERAGE ABOUT 13 CLAIMS PER YEAR THAT WE HAVE TO USE THE INDIVIDUAL STOP LOSS REIMBURSEMENT.

AND ARE THOSE COSTS ARE THESE COSTS PASSED ON TO THE EMPLOYEE SIDE OF THE OR? THESE ARE JUST PART OF WHAT WE ASSUME.

AND THEN THEY JUST PAY WHATEVER THEY'RE PAYING IN A QUOTE UNQUOTE.

THEY ARE TAKEN INTO CONSIDERATION, HOWEVER, WHEN WE'RE DETERMINING EMPLOYEE PREMIUMS. OKAY. ALL RIGHT. THANK YOU, MAYOR PRO TEM.

THANK YOU, MR. MAYOR. MEGAN, I NOTICED ON THE WE HAD A MODEL FOR THE STOP LOSS COUNTS THAT INCREASED 5% PER ANNUM.

AND AND I GUESS MAYBE I'M JUST NOT UNDERSTANDING.

SO MAYBE EDUCATE ME IS THAT WE'RE ANTICIPATING A 5% PER ANNUM INCREASE IN CLAIMS, A 5%, AN INCREASE IN STAFFING.

WHAT IS THE 5% REPRESENT ITS STAFFING.

SO IT'S AN INCREASE IN STAFFING.

HISTORICALLY, WE AVERAGE ABOUT A 3 TO 4% INCREASE IN HEADCOUNT.

BUT TO BETTER SAFE THAN SORRY, WE ALWAYS GAUGE FOR THAT 5% THRESHOLD TO EXPECT THAT STAFFING OR ENROLLMENT AND PARTICIPATION IN THE PLAN WOULD INCREASE BY THAT AMOUNT.

OKAY. ALL RIGHT. THAT CLARIFIES IT.

THANK YOU SO MUCH. OKAY.

ANY OTHER QUESTIONS FOR STAFF? ALL RIGHT. COUNCILMAN. WHAT'S.

I'LL MAKE A MOTION TO APPROVE MAYOR PRO TEM SECOND.

OKAY, WE HAVE A MOTION AND A SECOND.

ANY OTHER DISCUSSION? LET'S VOTE ON THE SCREEN.

THAT PASSES SIX ZERO.

AND, MEGAN, I HAVE SOMETHING FOR YOU HERE.

SINCE YOU'RE IN A.

NUH. NUH NUH.

WAIT. WHY? HAVE YOU PRESENTED TO ME? PRESENTED IN CLOSED SESSION.

OKAY. GOT IT. SO? SO THIS IS ESPECIALLY BECAUSE YOU HAVE A NEW CAPACITY.

YOU'RE IN. RIGHT? SO YOUR NEW ROLE IS DIRECTOR OF HUMAN RESOURCES.

OUTSTANDING. CONGRATULATIONS.

YEAH. HARD EARNED. SO WE HAVE A ELEPHANT FOR YOU TO REMEMBER WHEN YOU YOUR FIRST PRESENTATION AND ALSO REFLECT FONDLY ON YOUR YOUR NEW POSITION.

WE THANK YOU VERY MUCH FOR THANK YOU FOR ALL YOU'RE DOING.

YEAH FOR SURE. AND THEN HERE WE GO.

YOU GOT TO TAKE IT. OH GOSH.

YEAH. THANK YOU.

YES. YOU'D HAVE TO MAKE AN AWESOME JACKET.

FANTASTIC. THANK YOU VERY MUCH I APPRECIATE IT.

YES. THANK YOU VERY MUCH. THAT'S SO NICE.

ALL RIGHT. THAT TAKES US TO ITEM D.

[D. Consider a motion to reconsider the November 7, 2023 denial of a Specific Use Permit (File ID S23-0002b) to allow a building no more than 53 feet in height on approximately 2.695 acres of land generally located at the southwest corner of the intersection of Stuart Road and Loop 288 in the City of Denton, Denton County, Texas. (S23-0002c, Stuart Apartments, Mia Hines)]

JUST SO THIS IS OUR LAST ITEM BEFORE CONCLUDING ITEMS. IT'S ITEM D ID S230002C.

CONSIDER A MOTION TO RECONSIDER THE NOVEMBER 7TH, 2023 DENIAL OF A SPECIFIC USE PERMIT TO ALLOW TO ALLOW A BUILDING NO MORE THAN 53FT IN HEIGHT ON APPROXIMATELY 2.695 ACRES OF LAND, GENERALLY LOCATED AT THE SOUTHWEST CORNER OF THE INTERSECTION OF STUART ROAD AND LOOP 38, IN THE CITY OF DENTON.

MAYOR. THERE'S NO PRESENTATION.

THIS IS JUST ASKING COUNCIL TO RECONSIDER THE ITEM AND IF IT IF YOU NEED A BRIEF PRESENTATION, WE CAN GIVE IT TO YOU.

BUT IT'S REALLY TO RECONSIDER THE ITEM AND PUT IT BACK ON THE AGENDA IN THE FUTURE.

OKAY. COUNCILWOMAN ESSER.

YES, I REQUESTED THIS OPPORTUNITY TO ASK YOU TO RECONSIDER.

YOU MAY RECALL THIS WAS A PRETTY BRIEFLY CONSIDERED ITEM AFTER THE VERY LONG ONE LAST WEEK, AND A LOT OF IT TURNED ON THIS QUESTION ABOUT BUILDING 53FT IN HEIGHT AND IT'S AND HOW NEAR IT WAS TO TO OTHER STRUCTURES.

AFTER THE MEETING, DIRECTLY AFTER THE MEETING, STAFF INFORMED ME THAT THERE HAD BEEN A KIND OF A CHANGE IN PLAYERS CLOSE TO THE TIME OF PRESENTATION THAT WE WEREN'T HEARING FROM THE STAFF MEMBER THAT HAD ACTUALLY DEVELOPED THE CASE, AND THAT NO, NO FAULT OF THE PERSON WHO PRESENTED WHO PITCHED IN. BUT AS A RESULT, THERE WAS MATERIAL INFORMATION ABOUT WHAT MITIGATION STEPS WERE BEING

[01:45:04]

PROPOSED IN THE DESIGN, SIGNIFICANT ENOUGH THAT I FELT IT WAS WORTH HEARING.

AND FOR ME, RECONSIDERING.