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Minutes TC 12/08/2008 - Joint Session-, MINUTES FROM SPECIAL JOINT SESSION BETWEEN TROPHY CLUB MUNICIPAL UTILITY DISTRICT NO.1 And TROPHY ClllB MliNICIPAl UTILITY DISTRICT NO.2 dba TROPHY CLUB MASTER DISTRICT and TROPHY CLUB TOWN COUNCil MONDAY, DECEMBER 8, 2008 AT 6:00 P.M. STATE OF TEXAS § COUNTY OF DENTON § The Town Council of the Town of Trophy Club, Texas, met in a Joint/Special Session on Monday, Thursday, December 8,2008. The meeting was held within the boundaries of the Town and was open to the public. TOWN COUNCil MEMBERS PRESENT: Nick Sanders Mayor Philip Sterling Mayor Pro Tem Susan Edstrom Council Member Jim Moss Council Member Kathleen Wilson Council Member Glenn Strother Council Member Master District Directors Present: Connie White Chair Carol Borges Vice Chair James Thomas SecretarylTreasurer Kevin Carr Board Member Jim Hase Board Member Dean Henry Board Member Steven Kohs Board Member Neil Twomey Board Member Gary Cantrell Board Member Jim Budarf Board Member STAFF AND GUEST(S) PRESENT:­ Brandon Emmons Town Manager Stephen Seidel Assistant Town Manager Lisa Hennek Town Secretary Patricia Adams Town Attorney Danny Thomas Fire Chief Mary Moore Recording Secretary Robert Scott Utility Superintendent Bob West Attorney Pam Liston Attorney A.1 Call to Order and Announce a Quorum. a. Master District Master District Chair White called the Master District to order at 6:00 p.m. noting a quorum was present. b. Town Council Mayor Sanders called the Town Council to order at 6:00 p.m. noting a quorum was present. December 8,2008 Town Council Minutes A.2 Public Comments or Presentations Citizens are allowed three (3) minutes to address the Board regarding an item over which the Board has policy or oversight authority as provided by Texas law, the ethics order, or other policy order. No citizens addressed the Board. B.1 Discuss and take appropriate action regarding direction on the McLain report, funding of additional costs, additional data, extending scope of services and additional action related to the report. Mayor Sanders said that the Council voted not to spend any additional money for the web-based browser and suggested WinOcular. Sanders stated that the Council took action approving the original contract fee that included the four scenarios would be provided with that. Director Budarf commented that he did not see any reference to scenarios and only a list of spreadsheets Chair White agreed that the contract did not state the scenarios would be provided. White questioned how the group can determine what information McLain has. Council member Moss recalled Council's motion, which passed 4:1, approving to pay half of the $7,500 due, providing the Master District also agreed. Chair White understands that the $7,500 completes the study and the additional $10,000 is necessary to receive the analysis. Town Manager Emmons quoted the proposal and summarized that by fulfilling the payment obligation, McLain would produce what he has done to date, including the scenarios. To produce the data in a web­ based browser would require additional funds. Director Henry feels that we have received all the information we can from McLain and the rest can be done by us. Council member Wilson stated that Council's discussion with McLain explained that the $15,000 would cover delivery of the analysis and all backup data. Wilson said that staff can handle placing the information in a web-based browser, rather than expending additional funds. Motion made by Director Budarf, seconded by Vice Chair Borges to pay the remaining $3,750, satisfying the Master District's contractual agreement for adequate data. Director Cantrell would like one of the Directors to look at the information prior to vote as he has only seen an analysis in McLain's editorial. Director Twomey agreed with Cantrell. Council member Wilson stated that the information would be based off of the FY2008-09 budget and McLain would be available to help interpret the data. Wilson stated that McLain preferred to hand the model over to Chair White to run her own numbers. Mayor Sanders stated that as a citizen, the Town has the obligation to pay a vendor for an agreed upon product. If the data is not adequate or acceptable, the Town has the opportunity to object. Council member Edstrom stated concern that the group was getting too subjective by requesting yet another group review the data when the original goal was to have an impartial person review the facts. Thirty minutes on one item is indicative of the governance issue. Vice Chair Borges stated that the Master District was not looking for validation of the numbers only for fulfillment of the contract. December 8, 2008 Town Council Minutes 2 Mayor Pro Tem Sterling said that he hoped the Master District fulfills their portion of the contract in order to receive the consolidated numbers. Director Budarf restated his motion, to pay the remaining $3,750, satisfying the Master District's contractual agreement for providing the contract is fulfilled, and added review by the Consolidation Committee to ensure that the contract is fulfilled. The intent of the motion was not to argue the numbers but to ensure that McLain fulfills his contract. Director Hase thought McLain said he had not fulfilled the agreement by providing a recommendation. Mayor Sanders explained that McLain chose not to make a recommendation and rather provided options suggesting that the governance issues be fixed first. Chair White called the question. The amendment (to pay the remaining $3,750, satisfying the Master District's contractual agreement for providing the contract is fulfilled, and review by the Consolidation Committee to ensure that the contract is fulfilled) passed with Director Cantrell opposing and Director Twomey sitting out. B.2 Discuss and take appropriate action regarding comments and opinions from McLain Update, governmental service issues, including water/wastewater operations, fire protection and other governmental services provided by the Town and MUDs to the residents; Town-MUD relations, and governance issues. Director Budarf said that the relationship between the Town and MUD has been a seesaw over the past several years. Budarf stated that the press was more than welcome to attend meetings, and that the Elected Officials should do due diligence prior to speaking to the press. Chair White and Director Twomey preserited a graph with the issues and goals. Chair White said her suggestion is to consolidate MUD1 and MUD2 and eventually move under the Town. Mayor Sanders stated that some facts and data were left out of the information presented and objected to some of the adjectives used in the presentation. Sanders is concerned that someone may take the information presented as gospel and questioned the assumptions made in the presentation, stating that he had a different viewpoint. Vice Chair Borges said that she appreciated Mayor Sanders' comments and questioned his reference to a Water Board. Borges said in essence that would be removing MUD2 only to create another Board. The group discussed the number of meetings occurring given the current government structure. Council member Edstrom asked Town Attorney Adams if a vote of the citizens was required under any of the scenarios. Town Attorney Adams advised that a vote for consolidation of MUD1 and MUD2 was required and that a vote was not necessary for the Town to take over MUD2. Council member Edstrom stated she would have preferred that the MUDs worked with the Town prior to presenting the graph with the issues and goals. Chair White said that staff was not questioned regarding efficiencies and that the information presented was just a start. Director Twomey spoke to the lack of communication between the Council and the Master District; that the Consolidation Committee has only begun pUlling data and the Mayor is already talking about a Water Board. Twomey stated that prior to the Town taking action a cost benefit analysis needed to be preformed. Director Thomas said real financial numbers are necessary and Thomas expressed his disappointment in the lack of numbers presented by McLain. Thomas questioned how to distribute the MUD2 tax throughout the December 8,2008 Town Council Minutes 3 Town as he has not found a Municipality in Texas that charges a different water/waste water rate in different areas in a community. Residents can write off a MUD tax but not their water bills. Town Manager Emmons stated that typically an entire community has one water provider. The Town would not charge different rates for different areas in the community. Good facts and information were presented, however, there was not enough data to prove up any assumption yet. Emmons agreed that a resident cannot write off water rates and you cannot control water taxes, but can control water rates based on usage and commodity. Additionally, other cities don't charge an ad valorem tax for operations. Emmons suggested that all step aside from everyone trying to make a point or win a fight, and work together. Director Henry stated that the only water provider in Trophy Club is MUD1. MUD1 has a contract with Fort Worth, not MUD2 and not the City, MUD1. Director Twomey added that the combined cost of an average home value with the MUD1 or I\IIUD2 tax was still/ess than compared to Roanoke or Westlake. Director Budarf stated his concern for the lack of proof showing financial benefit with the dissolution of MUD2. Budarf commented that he would vote in favor if there was proof that it would be revenue neutral. Chair White suggested that the Board consider including two Council members to the Consolidation task force as posted under Item B.3. White further suggested implementing another task force to research the Town taking over MUD2 and include members of the MUDs. Council member Edstrom cautioned the group about being myopic and suggested the already established Consolidation Committee research all consolidation options and viable options. MUD2 Attorney Liston advised for purposes of the consolidation, the water code negotiations should be kept between the two parties. Town Attorney Adams stated that the Agenda was not posted to talk about the creation of another task force under Item B.3. Town Manager Emmons supports one group researching all options. Director Cantrell suggested that the Ways and Means Advisory Group look at numbers and upon completion of the audit allow the auditors to make a recommendation regarding consolidation and savings. Chair White and Director Budarf suggested inviting two residents to the Consolidation Committee as well as add the attorneys to the Consolidation Committee. Mayor Sanders clarified that the Master District expanded the original scope of the committee to look at all consolidation options. Motion made by Director Budarf, seconded by Thomas to expand the Consolidation Committee to include two Council members and two residents to look at all consolidation options as one committee and come back in time to post for the May election. Director Cantrell suggested resident Bob Fair. Director Budarf said that recommendations need to be turned in to the Chair and Mayor and they would choose. Council member Moss stated concern that too much was being put on the committee in order to meet the deadline for the May election. Council member Edstrom suggested the Committee break up into sub groups. Director Cantrell suggested deadlines might impact the ability for the Committee to research the correct way. December 8, 2008 Town Council Minutes 4 Chair White agreed and stated Cantrell's suggestion was valid as long as all agree that no additional action would be taken by any of the parties, until the Consolidation Committee has concluded their review. Director Budarf amended the motion, seconded by Director Thomas to include two Council members and two residents, to look at all scenarios and remove the deadline. Council member Wilson stated that rather than creating all these sub-committees the group needs to decide where everyone stands. Mayor Sanders said that Council had not taken any action regarding the consolidation and has asked for legal advice. Sanders asked staff to post an item to the Council's Agenda to discuss consolidation options and the legalities associated with those options. Mayor Pro Tem Sterling questioned if total consolidation was the ultimate goal. In order for the Consolidation Committee to be successful, the entire group needs to come to a consensus and let that purpose be completely understood. Sterling asked the group to consider what they want the Town to look like in ten years. Sterling stated as a resident of MUD2, it is easier to understand one tax; people are scared of MUD taxes because they do not understand it. Chair White said she had a problem with Sterling's comments that MUD taxes are a problem but PID fees were okay. Director Henry agrees with one entity and said it was between MUD1 and Westlake. Council member Wilson stated for the record that no discussions regarding a Water Board have occurred. Wilson suggested creating a strategic plan in order to consolidate into one entity and not create additional entities and/or committees. Director Budarf said that the MUDs have talked about consolidation for a long time and now it was coming to a head. Budarf said people think their taxes will go away if the MUDs go away, which is not true. The taxes only get moved around. Mayor Pro Tem Sterling said that the taxes would be easier to understand if all under the same entity. Director Thomas feels the Consolidation Committee will benefit better once the McLain report comes in and appreciated Council member Wilson's and Strother's input in the Committee. Mayor Sanders asked that the numbers currently being collected by the Consolidation Committee be shared with the Council and for an agreement that lines are not drawn between the Entities and that all share the information collected. Sanders said that, all though the process can be tedious, he appreciated the Joint Meetings to discuss the issues and options, as Council has an obligation to follow the requirements of the Open Meeting's Act. Chair White agreed with Mayor Sanders and asked that the group make an agreement that action excluding the other entities not be taken until the Consolidation Committee makes their final report. Director Budarf called the question. Chair White said that she felt strongly that the Consolidation Committee first determines what the right step was for the residents. White stated if the analysis was going to be done correctly, she would like to know, that neither party would go off and take some other action that precludes the other one. White requested the group agree to the same agreement that was made and adhered to when the McLain Study began and reiterated that neither party take further action until the results from the Consolidation Committee are reported. White summarized the agreement that the MUDs would not place consolidation on the ballot until all agreed that this was the best step and that the Town not vote to dissolve MUD2untii the analysis was completed and all agreed this was the best step. Director Cantrell seconded the motion. (Chair White's statement was not made as a motion, Director Cantrell agreed with White's request.) December 8,2008 Town Council Minutes 5 Mayor Pro Tem Sterling agreed in the spirit of cooperation, stating that he felt the agreement was the only way to move the Town forward. Town Attorney Adams cautioned the Council that the Agenda is not posted for action. Chair White said that consensus from the group was not action. In addition to Mayor Pro Tem Sterling and Director Cantrell verbal acknowledgement, the following agreed to a consensus to work together and not take further action: Director Hase Council member Edstrom Director Henry Mayor Sanders Chair White Director Borges Director Thomas Council member Wilson Director Budarf Council member Strother Director Twomey Director Kohs Council member Moss The amendment (to expand the Consolidation Committee to include two Council members and two residents, to look at all consolidation options as one committee, and report back to the Board with no due date) passed with Director Henry opposing. Mayor Sanders read a letter into the record submitted by Greg Lamont. Director Kohs thanked Director Twomey for putting together the numbers. 8.3 Discuss and take appropriate action regarding the inclusion of two Council Members to serve on the MUDs' Joint Task Force to study the consolidation of MUDs 1 and 2. Action taken under B.2 8.4 Discussion regarding MUDs' recent vote to consolidate MUD1 and MUD 2, the process for consolidation, and the consensus regarding the consolidation of the MUDS. Action taken under B.2 Council member Edstrom asked the Consolidation Committee to review the numbers collected by Director Twomey. Director Twomey said the Consolidation Committee met last night and the numbers were shared with the other Directors today. Director Twomey presented and explained those preliminary numbers. Vice Chair Borges asked for a volunteer to take the lead to help move the Consolidation Committee forward. Director Hase volunteered. Mayor Sanders asked that Town Manager Emmons be included in the meetings. C.1 Adjourn. Motion made by Henry, seconded by Budarf to adjourn. December 8,2008 Town Council Minutes 6 Motion made by Sterling, seconded by Edstrom to adjourn. Meeting adjourned at 8:14 p.m. dlog JL2?W eJ ./-----~ Lisa Hen k, Town Secretary Nick Sanders, Mayor Town of Trophy Club, Texas Town of Trophy Club, Texas December 8, 2008 Town Council Minutes 7