City Council Preview – December 1, 2015

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The Denton City Council meets today at noon for a Work Session followed by a 6:30pm Regular Session. There’s much on this agenda worth discussing, so take a look at the complete agenda and let’s highlight some things here…

PROPOSED CHANGES IN DRILLING AND PRODUCTION FEES
Ever since the council set out to amend our current gas well ordinance, we recognized the need to update and revise the fees associated with this activity. This is for two reasons. First, we need to make sure our fees align with the work done by the city in order to properly facilitate the planning process as well as properly inspect this industry according to our ordinance. The council has made it clear for several years that the city should in no way subsidize the gas drilling industry in town. If it costs the city X amount to operate our gas well inspections team, then that X amount should be passed along to the industry. The fee schedule is developed in order to maintain this balance. This is precisely why we have relied on a team of experts to dig into the numbers on two occasions in the last 5 years and advise the city on our fees.

Second, fees can also be used to encourage the type of industry behavior a community values. As we have seen in the struggle for local control with the oil and gas industry over the last couple of years, the city’s jurisdiction to mandate what it wants is severely limited by state law. Therefore, it is in the best interest of the city to utilize both carrots and sticks in order to encourage such activity in a way that is better for the city. Toward this end, the proposed fee schedule encourages operators to update their old gas well development plats as well as encourage the co-location of gas wells to avoid the unnecessary proliferation of drilling sites all over the city and in undesirable locations.

For more on the proposed fee schedule and how it compares to the current set of fees, check out this PowerPoint presentation.

RENEWABLE DENTON PLAN
We will have another public discussion on the proposed Renewable Denton Plan that aims to scale our renewable energy resources in our portfolio from 40% to 70% by 2019 (made up of solar and wind). Part of the plan calls for the creation of two natural gas quick start generation plants that will give DME control of its quick start needs in a more cost effective manner than relying on the market. Another part of the plan also assumes our divestment in a older coal generation plant at Gibbons Creek. By all counts, this plan is one of the most ambitious plans by a municipal electric provider in the nation in terms of its commitment and investment in renewable energy resources. It puts us on a trajectory to scale to 100% renewables as soon as that becomes more reliable and more cost effective. It puts us well beyond just about every long-term recommendation made by national organizations fighting climate change. And it does it all in a way that keeps our electricity on and our customers paying lower rates.

To see the PowerPoint for today’s council meeting, click here.

BUC-EE’S PROPOSAL TO COME TO DENTON
When the city council first heard a proposal to provide economic incentives for Buc-ee’s to come to Denton, my reaction was what I’m hearing from some of my fellow citizens: “We are seriously considering providing economic incentives for a gas station?” And I’ve had additional concerns along the way, such as the amount of the incentive, the rationale for providing incentives to the out parcel properties that do not yet have an identified user, and the impact of this development project on the nearby neighborhood. Much of these concerns that I and other council members raised along the way have led to a number of important things: a neighborhood meeting and the facilitation of communication between the business owner and those living in proximity, greater examination of the incentive package to more closely tie the incentive to a reimbursement for public infrastructure projects, greater clarity on what would and what wouldn’t count as an incentive for the surrounding parcels as they come online, and a bigger picture perspective on the benefit to Denton’s transportation assets along this stretch of I35.

Economic development for a city is complex. Commercial development is crucial for both necessary and desired city services for our citizens. At the end of the day, the cost to serve citizens in an average priced home in Denton is greater than the tax dollars generated by that home. Commercial development, both from the point of view of property tax and sales tax, helps subsidize the cost of services for our citizens. In other words, in most cases, commercial development pays more in city sales and property taxes than it receives in city services. But if our economic development efforts focused solely on this sort of equation (and many cities do), I would be deeply concerned.

A robust economic development policy must look beyond the obvious sales and property tax generators and also concern itself with: numbers of jobs, unemployment rates, average income in our city, cost of living, affordable housing, high end housing, long-term strategies toward fostering key industries in our city, developing the spirit of entrepreneurship, maintaining our creative class, avoiding the brain drain from our two universities, and the diversification of its commercial base in order to be more resilient in times of economic downturns.

While much attention as of late has been place on this Buc-ee’s proposal, this is far from being the largest, most significant, or most important project pursued by Denton over the last couple of years. We recently landed the largest distribution facility Denton has even seen. Our downtown is booming and the explosion in sales tax revenue to the city is bettering our local businesses as well. This is in part due to key investments and focus on our greater Square area. One downtown merchant reported to me that last months sales were 22% over last year. Older neighborhoods, known for years as college rental areas, are starting to see a resurgence in investment and interest – property values and neighborhood integrity is increasing as a result. Our tech and startup community is vibrant and thriving due to maintained focus by community and city leaders over the last few years. This has resulted in the creation of a new Innovation District just East of downtown and near the train station where underutilized industrial properties are in desperate need of new life. The city just inked a deal that would result in the creation of our city’s first coworking and startup incubation space in that area in order to reignite a passion for entrepreneurship – a long-term strategy for building into our economy. We’ve been working with the Denton Community Market to find a new space and platform for small business development in that same area. And so much more….

There’s still much to do and more to create to invest in our local economy, but I am confident we are heading in the right direction. If the economic development strategies of Denton were reduced to bringing in a Buc-ee’s to town, I would be deeply worried. But we are doing so much more than that. I look forward to tonight’s discussion on this topic.

 

 

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