Video index

AGENDA

Dr. Richardson welcomed everyone and gave a brief overview of the agenda.

Roll Call: 6 members present, 1 members absent, 0 members excused.

AUDIT AND FINANCE COMMITTEE UPDATE

Mayor Pro Tem Ledbetter gave a brief overview of the Audit and Finance Committee. This committee is comprised 3 Councilmembers (Ledbetter, McCowan and North) and is open to the public. She highlighted the following areas:

*Purpose: The purpose of the committee is to fulfill responsibilities of council oversight of the City's internal and external audit processes and provide an avenue of communication between the City Council, management, independent auditors and internal auditors.

* What They Do: Recommend appointment of a public accounting firm, recommends investigations, seek information from City staff, meet with Finance staff and recommend outside legal counsel.

Mayor Pro Tem Ledbetter indicated that the committee had an opportunity to:

(1) Meet with independent auditors without city staff.
(2) Received training (webinar, instructor led) in ethics and government accounting.
(3) Had an opportunity to "job shadow" the Finance Department for a better understanding of roles.
(4) Discussed the FY 2013 audit (payroll, IT passwords, decentralize reoccurring functions).
(5) Reviewed AFC Guidelines.
(6) Reviewed financial policies.
(7) Discussed "fraud hotline". It should be noted that there is ongoing research dedicated to this subject.
(8) Discussed the January 2014 independent auditors findings which will be discussed at a later date.

Councilmember Clark arrived at 9:26am.

Roll Call: 7 members present, 0 members absent, 0 members excused.

CITY PARTICIPATION IN COMMUNITY EVENTS

Councilmember Clark discussed the need to establish dialogue regarding community events and establish the role/expectations of the City in order for the City to be more prepared for reoccurring community events.

Council and City Staff discussion regarding the Christmas Parade. Specifically, there were concerns regarding budgeting the Christmas parade (whether or not the funds are to come from the City solely (Hotel Fund verses City Budget) or each entity--School District and Chamber, the suggested amount of funds needed for the Christmas parade ($5,000-$7,000) the suggestion of tying the parade into the City's Christmas Tree Lighting ceremony, the lack of attendance of last year's Christmas parade, and a community event calendar.

Dr. Richardson, City Manager, distributed a Special Event Permit/Policy package that the City will be utilizing when individuals request special events. This policy became effective on October 1, 2014. There were Council concerns regarding website and permit application timeframes which will be corrected to reflect consistency.

It was in agreement that communication would be made with the different entities (Chamber/School District) to make plans, as a team, for these types of events as well as advertise more via the website www.visitdesototexas.com of community events so that a "community calendar" will be in place.

Mayor Sherman excused himself at 9:51am.

Roll Call: 6 members present, 1 members absent, 0 members excused.

Mayor Sherman returned at 10:08am

Roll Call: 7 members present, 0 members absent, 0 members excused.

ALTERNATIVE FUNDING FOR CITY BROADCAST SEGMENTS

Kathy Jones, Public Information Officer, gave a history of how funds were distributed in the General Fund prior to 2012. However, based upon recent legislation, production funds (i.e. film editing) are now allocated in the PEG fund which has strict guidelines of usage. Ms. Jones requested $10,000 in order to continue her productivity.

It was the consensus of the Council to allocate $10,000 for City broadcast and special events requiring video production and other items associated that cannot be allocated out of the Hotel Occupancy Tax Fund.

Council recessed at 10:31am.

Council reconvened at 10:42am.

Roll Call: 7 members present, 0 members absent, 0 members excused.

BILLBOARDS

Mayor Sherman gave a brief overview of billboards as discussed during the Winter Retreat last year. He also gave a powerpoint presentation highlighting the cost of power, maintenance service agreement, monthly charges, what others are paying for ad space, selling the ad space (i.e. chamber of commerce and marketing agency selling ad space for the city as well), retail sales agents commission, current city ordinance (i.e. current ordinance may prohibit billboards) and review for possible change, potential companies interested in purchasing ad space (e.g. a new DeSoto psychiatric hospital), and control measures for ad space.

A new DeSoto psychiatric hospital has indicated an interest in ad space, total cost for the installation of billboard: $600,000, advertising on both sides and purchasing of both sides of the billboard, city controlling what ads are listed on billboard,

Jim Chappell - Reynolds Sign
Justin Bush - Sales Manager

Mr. Chappell gave a brief overview of the project highlighting the following:

*Overview of the product.
*Income stream for the City.
*Longevity of product (approximately 100,000 hours which is equivalent to 15 years)
* Installation costs ($600,000)
* Average time of ad (2-8 seconds)

Council discussion regarding contract for service to include maintenance issues, training staff, success in generating individuals who want to purchase ad space, return on investment, the city's servicing of the debt, timeframe to building the sign, data sheet on how ads are displayed, lease with an option to purchase, the impact on the new sign policy, and options of offering discounts.

Council also desired to determine what location and a contract that would engage a marketing company (or Chamber) that may want to partner with the City in order to sell ad space and allow the agencies to "test the waters".

Councilmember McCowan indicated that she would like to see more information on a "lease to purchase" option. Councilmember Clark indicated that she would like to see the "entire picture" of the proposal to include operating costs and maintenance of the system.

Mayor Sherman asked the Council if they would be comfortable moving forward with the proposal to construct the billboard, if the City received signed contracts and check ad buys totaling $100,000. It was the consensus of the Council (7-0) in support to move forward with the proposal.

HOTEL/CONVENTION CENTER UPDATE

Dr. Richardson gave a summary of the proposed project listed below:

Construction of the 1st full Service Hotel and Conference Center
*120 room Marriott Courtyard full service hotel - $15,000,000
* 20,000 square foot Conference Center - $5,000,000

Developers Pro Forma Projected 1st Year Operations - Assumptions/Results

*Occupancy Percentage: 59%
*Average Daily Rate: $131.31
*RevPAR: $77.19 (PFK projects)
*Gross Hotel Revenue: $3.3 million
*Meeting Room revenue: $1.0 million

DEVELOPER INCENTIVE REQUEST
*Land Purchase: $400,000
-$300,000 from the City and $100,000 from the Developer
-if project fails to develop, the Developer will be reimbursed the $100,000 by the City

*$5,000,000 Cash Contribution
-The City pays the debt service on $5 million EB-5 loan

*Moratorium on new Hotels
-The City puts a moratorium on construction of new hotels in the City until the proposed Developer's hotel achieves 65% occupancy for a year.

PROPOSED CITY INCENTIVE RESPONSE
* 380.01 Reimbursement Agreement
-Risk/Reward allocated appropriately to Developer
-Incremental City Project Taxes minus City Operational Cost (TBD) - Available for incentive
-Based on PFK's and Developer's Financial Pro Forma
-Financial and Strategic Benchmarks For Reimbursement

ECOMONIC DEVELOPMENT INCENTIVE

380.01 Financial Incentive
-Incremental City Project Taxes minus Operational Cost - Available for Incentive (incremental cost of facility to city TBD)
-Based of PKF's and Developer's Financial Pro Forma 20 years

380.01 Incentive Benchmarks for Reimbursement
-city review and approval of design and construction concepts, standards and cost
-Minimum average daily room rate - $120 (justify incentive and non-competitive with existing hotels)
-Minimum number of significant events at Conference Center greater than 50 (significant events definition to be determined-tax exempt events excluded as significant events)
-City of DeSoto prominently featured in name, advertising and promotions
-Guidelines on allowable events/uses
-Current on all Tax and Fee payments, agreements and contracts
-Limitation on Incentive Assignment - insure quality of operator for City

Council recessed at 12:15pm.

Council reconvened at 12:28pm.

Roll Call: 7 members present, 0 members absent, 0 members excused.

Jim Sabonis, FirstSouthwest, gave a brief overview of his experience with this type of project throughout the country. He indicated that there was a great format and that the target for smaller conventions had become very successful (i.e. weddings and graduations). The plan had "developer-carried" risk and was not competitive. He indicated that he was a strong supporter of the project.

Council discussion included pleasure in seeing the new proposal to include a developer-carried risk factor and establishing benchmarks. It was also stated that once a quality project is established, it has a greater possibility of igniting additional development along the corridor.

Mayor Sherman asked the council for a consensus on moving forward with the project. It was the Council's desires to have the City Manager and hotelier move forward with the new proposal (7-0).

Council recessed at 1pm.

Council reconvened at 1:15pm.

Roll Call: 7 members present, 0 members absent, 0 members excused.

COMPREHENSIVE PLAN UPDATE

Comprehensive Plan - Development of Proposed Amendments Timeline

March 2013: Briefed Council on process and timeline for updated comprehensive plan
March 2013: Steering committee was appointed (2 members for PZ, DEDC, and Council - Rachel and James)
April 2013: Met with steering committee
April 2013: Survey activated on website for public input.
May-June 2013: Worked with committee to develop a preliminary plan
October 2013: Brought to city council

Mr. Vatthauer also discussed the tentative project schedule: 2015 Comprehensive Plan Update

Phase1 - Kick Off and Public Input (Public Open Houses)
Phase 2 - Develop recommendation Chapters
Phase 3 - Public Input of Draft Comprehensive Plan
Phase 4 - Adoption of the Comprehensive Plan

Council discussion regarding steering committee updates, objectives, funding strategy, clearing defining the purpose, and public events. It was the consensus of the Council to move forward (7-0) to continue to have Councilmember Proctor and Councilmember Zander to continue to serve on the committee.

Mayor Sherman gave the Council and opportunity to share their comments about the retreat. In summary,

Councilmember McCowan indicated that this was a productive retreat and expressed appreciation to the staff for a "well-oiled" retreat. She applauded the work of the hotel convention center project and liked the idea to move ahead with the Comprehensive Plan. She thanked the Council for input and contributions.

Councilmember Proctor thanked city staff for planning the retreat. She appreciated the fluidness and how things were accomplished. She is looking forward to moving ahead with the projects presented.

Councilmember North stated that one of the most important things happening for the city is the hotel project and he thanked everyone for their participation.

Councilmember Zander thanked the City Manager for putting together a strong business proposal and hiring competent people to make the vision of the elected people a reality.

Councilmember Clark indicated the retreat had very good discussions and that it was good to see some of the projects moving forward. She was glad to see the new hotel proposal and noted that it was a really good deal which was better than the last proposal. She also thanked staff for preparing the agenda items and looks forward to serving.

Mayor Pro Tem Ledbetter thanked the staff who coordinated the retreat and stated that she was very pleased with the hotel package and glad that she was able to be a part of the process. She also stated that this would be her last city council retreat and she gave the advice to always do what's in the best interest of the citizens keeping with the vision.

Mayor Sherman gave closing remarks indicating that it has been such a pleasure to work with a council which represents the make-up of America (e.g. majority female city council) and hopes that the council continues to challenge one another.

Mayor Sherman adjourned the meeting at 1:49pm.

Feb 07, 2014 City Council Meeting 2014-02-07 Winter Retreat (Special Meeting)

Full agenda
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AGENDA

Dr. Richardson welcomed everyone and gave a brief overview of the agenda.

Roll Call: 6 members present, 1 members absent, 0 members excused.

AUDIT AND FINANCE COMMITTEE UPDATE

Mayor Pro Tem Ledbetter gave a brief overview of the Audit and Finance Committee. This committee is comprised 3 Councilmembers (Ledbetter, McCowan and North) and is open to the public. She highlighted the following areas:

*Purpose: The purpose of the committee is to fulfill responsibilities of council oversight of the City's internal and external audit processes and provide an avenue of communication between the City Council, management, independent auditors and internal auditors.

* What They Do: Recommend appointment of a public accounting firm, recommends investigations, seek information from City staff, meet with Finance staff and recommend outside legal counsel.

Mayor Pro Tem Ledbetter indicated that the committee had an opportunity to:

(1) Meet with independent auditors without city staff.
(2) Received training (webinar, instructor led) in ethics and government accounting.
(3) Had an opportunity to "job shadow" the Finance Department for a better understanding of roles.
(4) Discussed the FY 2013 audit (payroll, IT passwords, decentralize reoccurring functions).
(5) Reviewed AFC Guidelines.
(6) Reviewed financial policies.
(7) Discussed "fraud hotline". It should be noted that there is ongoing research dedicated to this subject.
(8) Discussed the January 2014 independent auditors findings which will be discussed at a later date.

Councilmember Clark arrived at 9:26am.

Roll Call: 7 members present, 0 members absent, 0 members excused.

CITY PARTICIPATION IN COMMUNITY EVENTS

Councilmember Clark discussed the need to establish dialogue regarding community events and establish the role/expectations of the City in order for the City to be more prepared for reoccurring community events.

Council and City Staff discussion regarding the Christmas Parade. Specifically, there were concerns regarding budgeting the Christmas parade (whether or not the funds are to come from the City solely (Hotel Fund verses City Budget) or each entity--School District and Chamber, the suggested amount of funds needed for the Christmas parade ($5,000-$7,000) the suggestion of tying the parade into the City's Christmas Tree Lighting ceremony, the lack of attendance of last year's Christmas parade, and a community event calendar.

Dr. Richardson, City Manager, distributed a Special Event Permit/Policy package that the City will be utilizing when individuals request special events. This policy became effective on October 1, 2014. There were Council concerns regarding website and permit application timeframes which will be corrected to reflect consistency.

It was in agreement that communication would be made with the different entities (Chamber/School District) to make plans, as a team, for these types of events as well as advertise more via the website www.visitdesototexas.com of community events so that a "community calendar" will be in place.

Mayor Sherman excused himself at 9:51am.

Roll Call: 6 members present, 1 members absent, 0 members excused.

Mayor Sherman returned at 10:08am

Roll Call: 7 members present, 0 members absent, 0 members excused.

ALTERNATIVE FUNDING FOR CITY BROADCAST SEGMENTS

Kathy Jones, Public Information Officer, gave a history of how funds were distributed in the General Fund prior to 2012. However, based upon recent legislation, production funds (i.e. film editing) are now allocated in the PEG fund which has strict guidelines of usage. Ms. Jones requested $10,000 in order to continue her productivity.

It was the consensus of the Council to allocate $10,000 for City broadcast and special events requiring video production and other items associated that cannot be allocated out of the Hotel Occupancy Tax Fund.

Council recessed at 10:31am.

Council reconvened at 10:42am.

Roll Call: 7 members present, 0 members absent, 0 members excused.

BILLBOARDS

Mayor Sherman gave a brief overview of billboards as discussed during the Winter Retreat last year. He also gave a powerpoint presentation highlighting the cost of power, maintenance service agreement, monthly charges, what others are paying for ad space, selling the ad space (i.e. chamber of commerce and marketing agency selling ad space for the city as well), retail sales agents commission, current city ordinance (i.e. current ordinance may prohibit billboards) and review for possible change, potential companies interested in purchasing ad space (e.g. a new DeSoto psychiatric hospital), and control measures for ad space.

A new DeSoto psychiatric hospital has indicated an interest in ad space, total cost for the installation of billboard: $600,000, advertising on both sides and purchasing of both sides of the billboard, city controlling what ads are listed on billboard,

Jim Chappell - Reynolds Sign
Justin Bush - Sales Manager

Mr. Chappell gave a brief overview of the project highlighting the following:

*Overview of the product.
*Income stream for the City.
*Longevity of product (approximately 100,000 hours which is equivalent to 15 years)
* Installation costs ($600,000)
* Average time of ad (2-8 seconds)

Council discussion regarding contract for service to include maintenance issues, training staff, success in generating individuals who want to purchase ad space, return on investment, the city's servicing of the debt, timeframe to building the sign, data sheet on how ads are displayed, lease with an option to purchase, the impact on the new sign policy, and options of offering discounts.

Council also desired to determine what location and a contract that would engage a marketing company (or Chamber) that may want to partner with the City in order to sell ad space and allow the agencies to "test the waters".

Councilmember McCowan indicated that she would like to see more information on a "lease to purchase" option. Councilmember Clark indicated that she would like to see the "entire picture" of the proposal to include operating costs and maintenance of the system.

Mayor Sherman asked the Council if they would be comfortable moving forward with the proposal to construct the billboard, if the City received signed contracts and check ad buys totaling $100,000. It was the consensus of the Council (7-0) in support to move forward with the proposal.

HOTEL/CONVENTION CENTER UPDATE

Dr. Richardson gave a summary of the proposed project listed below:

Construction of the 1st full Service Hotel and Conference Center
*120 room Marriott Courtyard full service hotel - $15,000,000
* 20,000 square foot Conference Center - $5,000,000

Developers Pro Forma Projected 1st Year Operations - Assumptions/Results

*Occupancy Percentage: 59%
*Average Daily Rate: $131.31
*RevPAR: $77.19 (PFK projects)
*Gross Hotel Revenue: $3.3 million
*Meeting Room revenue: $1.0 million

DEVELOPER INCENTIVE REQUEST
*Land Purchase: $400,000
-$300,000 from the City and $100,000 from the Developer
-if project fails to develop, the Developer will be reimbursed the $100,000 by the City

*$5,000,000 Cash Contribution
-The City pays the debt service on $5 million EB-5 loan

*Moratorium on new Hotels
-The City puts a moratorium on construction of new hotels in the City until the proposed Developer's hotel achieves 65% occupancy for a year.

PROPOSED CITY INCENTIVE RESPONSE
* 380.01 Reimbursement Agreement
-Risk/Reward allocated appropriately to Developer
-Incremental City Project Taxes minus City Operational Cost (TBD) - Available for incentive
-Based on PFK's and Developer's Financial Pro Forma
-Financial and Strategic Benchmarks For Reimbursement

ECOMONIC DEVELOPMENT INCENTIVE

380.01 Financial Incentive
-Incremental City Project Taxes minus Operational Cost - Available for Incentive (incremental cost of facility to city TBD)
-Based of PKF's and Developer's Financial Pro Forma 20 years

380.01 Incentive Benchmarks for Reimbursement
-city review and approval of design and construction concepts, standards and cost
-Minimum average daily room rate - $120 (justify incentive and non-competitive with existing hotels)
-Minimum number of significant events at Conference Center greater than 50 (significant events definition to be determined-tax exempt events excluded as significant events)
-City of DeSoto prominently featured in name, advertising and promotions
-Guidelines on allowable events/uses
-Current on all Tax and Fee payments, agreements and contracts
-Limitation on Incentive Assignment - insure quality of operator for City

Council recessed at 12:15pm.

Council reconvened at 12:28pm.

Roll Call: 7 members present, 0 members absent, 0 members excused.

Jim Sabonis, FirstSouthwest, gave a brief overview of his experience with this type of project throughout the country. He indicated that there was a great format and that the target for smaller conventions had become very successful (i.e. weddings and graduations). The plan had "developer-carried" risk and was not competitive. He indicated that he was a strong supporter of the project.

Council discussion included pleasure in seeing the new proposal to include a developer-carried risk factor and establishing benchmarks. It was also stated that once a quality project is established, it has a greater possibility of igniting additional development along the corridor.

Mayor Sherman asked the council for a consensus on moving forward with the project. It was the Council's desires to have the City Manager and hotelier move forward with the new proposal (7-0).

Council recessed at 1pm.

Council reconvened at 1:15pm.

Roll Call: 7 members present, 0 members absent, 0 members excused.

COMPREHENSIVE PLAN UPDATE

Comprehensive Plan - Development of Proposed Amendments Timeline

March 2013: Briefed Council on process and timeline for updated comprehensive plan
March 2013: Steering committee was appointed (2 members for PZ, DEDC, and Council - Rachel and James)
April 2013: Met with steering committee
April 2013: Survey activated on website for public input.
May-June 2013: Worked with committee to develop a preliminary plan
October 2013: Brought to city council

Mr. Vatthauer also discussed the tentative project schedule: 2015 Comprehensive Plan Update

Phase1 - Kick Off and Public Input (Public Open Houses)
Phase 2 - Develop recommendation Chapters
Phase 3 - Public Input of Draft Comprehensive Plan
Phase 4 - Adoption of the Comprehensive Plan

Council discussion regarding steering committee updates, objectives, funding strategy, clearing defining the purpose, and public events. It was the consensus of the Council to move forward (7-0) to continue to have Councilmember Proctor and Councilmember Zander to continue to serve on the committee.

Mayor Sherman gave the Council and opportunity to share their comments about the retreat. In summary,

Councilmember McCowan indicated that this was a productive retreat and expressed appreciation to the staff for a "well-oiled" retreat. She applauded the work of the hotel convention center project and liked the idea to move ahead with the Comprehensive Plan. She thanked the Council for input and contributions.

Councilmember Proctor thanked city staff for planning the retreat. She appreciated the fluidness and how things were accomplished. She is looking forward to moving ahead with the projects presented.

Councilmember North stated that one of the most important things happening for the city is the hotel project and he thanked everyone for their participation.

Councilmember Zander thanked the City Manager for putting together a strong business proposal and hiring competent people to make the vision of the elected people a reality.

Councilmember Clark indicated the retreat had very good discussions and that it was good to see some of the projects moving forward. She was glad to see the new hotel proposal and noted that it was a really good deal which was better than the last proposal. She also thanked staff for preparing the agenda items and looks forward to serving.

Mayor Pro Tem Ledbetter thanked the staff who coordinated the retreat and stated that she was very pleased with the hotel package and glad that she was able to be a part of the process. She also stated that this would be her last city council retreat and she gave the advice to always do what's in the best interest of the citizens keeping with the vision.

Mayor Sherman gave closing remarks indicating that it has been such a pleasure to work with a council which represents the make-up of America (e.g. majority female city council) and hopes that the council continues to challenge one another.

Mayor Sherman adjourned the meeting at 1:49pm.

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