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2007-07-17 OFFICIAL RECORD, CITY OF SOUTHLAKE REGULAR CITY COUNCIL MEETING MINUTES: JULY 17, 2007 LOCATION: 1400 Main Street, Southlake, Texas Council Chambers in Town Hall CITY COUNCIL PRESENT: Mayor Andy Wambsganss, Deputy Mayor Pro Tern Virginia M. Muzyka, and Councilmembers Laura K. Hill, Gregory Jones, Vernon Stansell, and John Terrell. CITY COUNCIL ABSENT: Mayor Pro Tem Carolyn Morris. STAFF PRESENT: City Manager Shana Yelverton, Assistant City Manager / Director of Public Safety Jim Blagg, Assistant to the City Manager Ben Thatcher, Community Relations Officer Pilar Schank, Manager of Information Services Gary Gregg, Information Systems Technician Pam Jordan, Director of Community Services Steve Polasek, Deputy Director of Community Services - Library Kerry McGeath, Community Services Coordinator Crystal Shafer, Director of Economic Development Greg Last, Director of Finance Sharen Jackson, Assistant Finance Director - Operations Sean Leonard, Municipal Judge Carol Montgomery, Director of Human Resources Kevin Hugman, Chief of Fire Services Robert Finn, Chief of Police Services Wade Goolsby, DPS School Resource Officer Allen Smith, Director of Planning and Development Services Ken Baker, Chief Planner Jayashree Narayana, Director of Public Works Robert H. Price, Deputy Director of Public Works Gordon Mayer, Civil Engineer Michael James, Public Works Operations Manager Chuck Kendrick, City Attorney E. Allen Taylor, and City Secretary Lori Payne. WORK SESSION: Agenda Item No. 1. Call to order. The work session was called to order by Mayor Wambsganss at 5:15 p.m. Agenda Item No. 2. Invocation. Assistant to the City Manager Thatcher gave the invocation. Mayor Wambsganss led the Pledge of Allegiance. Agenda Item No. 3. Recognition of Southlake Sister Cities Youth Ambassadors. Mayor Wambsganss and Councilmember Terrell introduced the Southlake students who were going to Tome, Japan: Tyler Alviz, Sam Friedland, Syboney King, Norma King, Allison Kline, Eric Liu, Kyle Reed, David Uriell, Samuel Van Cleve, Michael "Dillon" Votaw, and Zach Waters, as well as chaperone Officer Smith. Mayor Wambsganss presented the students with a gift, a jersey and a baseball signed by Texas Rangers pitcher Akinori Otsuka, to take to Tome Mayor Fuse. Agenda Item No. 4. Discuss new make up of the Joint Drug and Alcohol Awareness Committee and new direction for the Committee. Councilmember Hill presented information on Students and Parents Against Risks to our Kids in Southlake (S.P.A.R.K.S.). She discussed the new structure of this committee. Council discussed this item. REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page I of 13- Agenda Item No. 5. Discuss all items on tonight's meeting _a eg nda. City Council reviewed the consent agenda items with city staff. Item 6C to table to the August 7, 2007, regular City Council :meeting was added to the consent agenda. The work session ended at 5:49 p.m. REGULAR SESSION: Agenda Item No. 1. Call to order. The regular session was called to order by Mayor Wambsganss at 5:49 p.m. Agenda Item No. 2A. Executive Session. Mayor Wambsganss announced City Council would be going into Executive Session pursuant to the Texas Government Code Section 551.071, consultation with the city attorney, Section 551.074, deliberation regarding personnel matters, and Section 551.087, deliberation regarding economic development negotiations. City Council adjourned for Executive Session at 5:49 p.m. Executive Session began at 6:15 p.m. and ended at 6:17 p.m. Agenda Item No. 2B. Reconvene. Mayor Wambsganss reconvened the regular meeting at 6:49 p.m. and asked if any action was necessary from Executive Session. No action was necessary. Agenda Item No. 3A. Mayor's Report. Mayor Wambsganss announced upcoming meetings and events. Agenda Item No. 3B. Ctesger's Report. City Manager Yelverton introduced new Public Works Department staff member, Civil Engineer Michael James, P.E. The Council welcomed him to the city. Agenda Item No. 3C. Financial Report. A written report was given to Council. CONSENT AGENDA: Consent agenda items are considered to be routine by the City Council and are enacted with one motion. Mayor Wambsganss read the consent agenda items into the record. Agenda Item No. 4A. Approve the minutes from the June 19, 2007, regular City Council meeting and from the June 20, 2007, June Retreat with City Council. A presentation was not made on this item. Agenda Item No. 4B. Excuse members of the City Council and of the Planning and Zoning Commission for absences from meetings. No action was taken on this item. Agenda Item No. 4C. Approve the purchase of 40 desktop computers from Hewlett Packard CompM in the amount of $36,880. A presentation was not made on this item. Agenda Item No. 4D. Resolution No. 07-043, Suspend the July 30, 2007, effective date of the proposal by Atmos Energy Corp., Mid-Tex Division to implement interim GRIP rate adjustments for Gas Utility Investment in 2006, authorize participation with the Atmos Cities Steering Committee ("ACSC") in a Review and Inquiry into the sufficiency of the filing and the basis of REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page 2 of II- the proposed rate adjustments, authorize intervention in administrative and court proceedings involving the proposed GRIP rate adjustments; require reimbursement of reasonable legal and consultant ratemaking costs; and require delivery of this resolution to the company and legal counsel. A presentation was not made on this item. In accordance with Section 4.21 of the City Charter, the caption for this item is listed as follows: A RESOLUTION BY THE CITY OF SOUTHLAKE, TEXAS, SUSPENDING THE JULY 30, 2007, EFFECTIVE DATE OF THE PROPOSAL BY ATMOS ENERGY CORP., MID-TEX DIVISION TO IMPLEMENT INTERIM GRIP RATE ADJUSTMENTS FOR GAS UTILITY INVESTMENT IN 2006; AUTHORIZING PARTICIPATION WITH THE ATMOS CITIES STEERING COMMITTEE ("ACSC") IN A REVIEW AND INQUIRY INTO THE SUFFICIENCY OF THE FILING AND THE BASIS OF THE PROPOSED RATE ADJUSTMENTS; AUTHORIZING INTERVENTION IN ADMINISTRATIVE AND COURT PROCEEDINGS INVOLVING THE PROPOSED GRIP RATE ADJUSTMENTS; REQUIRING REIMBURSEMENT OF REASONABLE LEGAL AND CONSULTANT RATEMAKING COSTS; AND REQUIRING DELIVERY OF THIS RESOLUTION TO THE COMPANY AND LEGAL COUNSEL. Agenda Item No 4E Accept general warranty deed for parks in the Town Square Grand Avenue District. A presentation was not made on this item. Agenda Item No. 4F. Ordinance No. 480-341a, 1St Reading_(ZA07-066), Zoning Change and Revised Site Plan for Commerce Business Park located at 540 Commerce Street. Current Zoning_ S-P-1 Detailed Site Plan District. Requested Zoning: S-P-1 Detailed Site Plan District. SPIN Neighborhood #7. Chief Planner Narayana presented this item to Council during the work session. Council approved this item subject to Site Plan Review Summary No. 3, dated June 29, 2007, specifically not granting the requested variance regarding sidewalks and requiring the sidewalks to be constructed as required by ordinance but not requiring the sidewalks to be built until instructed by the City based upon future development around this project which would provide a tie-in to the sidewalks. _Agenda Item No 4G ZA07-073 Plat Revision for Lot 13R H. Granberry, No. 581 Addition, being a revision of Lot 13, H Granberry No 581 Addition located at 400 South White Chapel Boulevard Current Zoning: SF-IA Single Family Residential District. SPIN Neighborhood #14. A presentation was not made on this item. Council approved subject to Revised Plat Review Summary No. 2, dated July 11, 2007. Agenda Item No 4H. Consider SP07-213 Master Sign Plan for Block 22, Southlake Town Square located at the northeast corner of the intersection of Central Drive and East Southlake Boulevard. A presentation was not made on this item. Agenda Item No 41. Ordinance No. 480-222a lst Reading (ZA05-112), Zoning Change and Concept Plan for The Gateway Church - S.H. 114 Campus, being approximately 214 acres situated in the Richard Eads Survey Abstract No. 481, being Tracts 1, IAl, IE, 2, 2A, 2B, 2BIA and 2C1 and in the Thomas Mahan Survey Abstract No. 1049, being Tracts 2A, 2B, 2B1 3 3A 3C 5 5C and 5D and a portion of Tracts 1 and 1B1. The property is located along REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page 3 of 1$. the north side of the 1500 - 1800 blocks of State Highway 114, along the south side of the 1300 - 1800 blocks of East Highland Street and along the west side of the 600 - 900 blocks of North Kimball Avenue and is approximately 600 feet east of North Carroll Avenue. Current Zoning: NR-PUD Non-Residential Planned Unit Development District and AG Agricultural District. Requested Zoning: NR-PUD Non-Residential Planned Unit Development District. SPIN Neighborhood #6. This item was tabled administratively until the August 7, 2007, regular City Council meeting. Agenda Item No 4J Ordinance No 480-512 2„d Reading (ZA06-189 Zoning Change and Site Plan for proposed Southlake Design Center, located at 280 Commerce Street. Current Zoning: S- P-1 Detailed Site Plan District Requested Zoning: S-P-1 Detailed Site Plan District. SPIN Neighborhood #7. The applicant requested to table this item to the August 21, 2007, regular City Council meeting. Agenda Item No 6C Resolution No 07-030 (ZA07-045), Specific Use Permit for a mass gathering event at Gateway Church located at 1085 South Kimball Avenue. Current Zoning: S-P- 1 Detailed Site Plan District. SPIN Neighborhood #7. The applicant requested to table this item to the August 7, 2007, regular City Council meeting. Motion was made to approve consent agenda items 4A; 4C; 413; 4E; 4F subject to Site Plan Review Summary No. 3, dated June 29, 2007, specifically not granting the requested variance regarding sidewalks and requiring the sidewalks to be constructed as required by ordinance but not requiring the sidewalks to be built until instructed by the City based upon future development around this project which would provide a tie-in to the sidewalks; 4G subject to Revised Plat Review Summary No. 2, dated July 11, 2007; 4H; 41 to be tabled administratively until the August 7, 2007, regular City Council meeting; 4J to be tabled to the August 21, 2007, regular City Council meeting; and 6C to table to the August 7, 2007, City Council meeting. Motion: Terrell Second: Jones Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 REGULAR AGENDA: Agenda Item No. 5. Public Forum. No one spoke during public forum. Agenda Item No 6A Ordinance No 662-C 2nd Reading Revise the City of Southlake's Drought Contingency Plan. Director Price presented this item to Council. In accordance with Section 4.21 of the City Charter, the caption for this item is listed as follows: AN ORDINANCE OF THE CITY OF SOUTHLAKE, TEXAS, AMENDING THE DROUGHT CONTINGENCY PLAN FOR THE CITY OF SOUTHLAKE, TEXAS; ESTABLISHING CRITERIA FOR THE INITIATION AND TERMINATION OF DROUGHT RESPONSE STAGES IN COMPLIANCE WITH THE CITY OF FORT WORTH'S DROUGHT CONTINGENCY/EMERGENCY WATER MANAGEMENT PLAN. ESTABLISHING REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page 4 of 1 2- RESTRICTIONS ON CERTAIN WATER USES; ESTABLISHING PENALTIES FOR THE VIOLATION OF AND PROVISIONS FOR ENFORCEMENT OF THESE RESTRICTIONS; ESTABLISHING PROCEDURES FOR GRANTING VARIANCES; AND PROVIDING CUMULATIVE AND SEVERABILITY AND SAVINGS CLAUSES; AND AN EFFECTIVE DATE. No one spoke during the public hearing. Motion was made to approve Ordinance No. 662-C, 2"d Reading, Revise the City of Southlake's Drought Contingency Plan. Motion: Jones Second: Terrell Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Agenda Item No 6B Ordinance No 909, 2"d Reading Appoint a Municipal Judge and authorize the Mayor to execute an agreement with the Municipal Judge and provide an effective date. Mayor Wambsganss presented this item to Council. In accordance with Section 4.21 of the City Charter, the caption for this item is listed as follows: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SOUTHLAKE, TEXAS, APPOINTING A MUNICIPAL JUDGE AND AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT WITH THE MUNICIPAL JUDGE; AND PROVIDING AN EFFECTIVE DATE. No one spoke during the public hearing. Motion was made to approve Ordinance No. 909, 2"d Reading, Appoint a Municipal Judge and authorize the Mayor to execute an agreement with the Municipal Judge and provide an effective date, to reappoint Carol Montgomery with an annual salary of $42,000 plus TMRS compensation and bring the operational side of the court under the City Manager's Office. Motion: Terrell Second: Muzyka Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Agenda Item No 6D Ordinance No. 480-410a 2"d Reading (ZA07-050), Zoning Change and Revised Concept Plan for Southlake Town Square on properties located at 245 North Carroll Avenue 1297 Division Street 1301 and 1501 East State Highway 114 and at the southeast intersection of the eastbound East State Highway 114 frontage road and Central Avenue. Current Zoning: DT Downtown District C-3 General Commercial District, and S-P-1 Detailed Site Plan District Requested Zoning: DT Downtown District. SPIN Neighborhood #8. Director Baker presented this item to Council in conjunction with items 6E, 6F and 6G. In accordance with Section 4.21 of the City Charter, the caption for this item is listed as follows: REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page 5 of 1$., AN ORDINANCE AMENDING ORDINANCE NO. 480, AS AMENDED, THE COMPREHENSIVE ZONING ORDINANCE OF THE CITY OF SOUTHLAKE, TEXAS; GRANTING A ZONING CHANGE ON A CERTAIN TRACT OR TRACTS OF LAND WITHIN THE CITY OF SOUTHLAKE, TEXAS, BEING LEGALLY DESCRIBED AS TRACTS 3A, AND A PORTION OF TRACT 3J, R. EADS SURVEY ABSTRACT NO.481, LOT 2 GREENWAY CARROLL ADDITION, LOT 1, BLOCK 12 & A PORTION OF LOT 6, BLOCK 3R2, SOUTHLAKE TOWN SQUARE PHASE IV, AND MORE FULLY AND COMPLETELY DESCRIBED IN EXHIBIT "A" FROM "C-3" GENERAL COMMERCIAL DISTRICT TO "DT" DOWNTOWN DISTRICT, SUBJECT TO THE SPECIFIC REQUIREMENTS CONTAINED IN THIS ORDINANCE; CORRECTING THE OFFICIAL ZONING MAP; PRESERVING ALL OTHER PORTIONS OF THE ZONING ORDINANCE; DETERMINING THAT THE PUBLIC INTEREST, MORALS AND GENERAL WELFARE DEMAND THE ZONING CHANGES AND AMENDMENTS HEREIN MADE; PROVIDING THAT THIS ORDINANCE SHALL BE CUMULATIVE OF ALL ORDINANCES; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR A PENALTY FOR VIOLATIONS HEREOF; PROVIDING A SAVINGS CLAUSE; PROVIDING FOR PUBLICATION IN THE OFFICIAL NEWSPAPER; AND PROVIDING AN EFFECTIVE DATE. No one spoke during the public hearing. Motion was made to approve Ordinance No. 480-410a, 2°d Reading (ZA07-050), Zoning Change and Revised Concept Plan for Southlake Town Square subject to Council's motion on 1St Reading: noting the City will retain 0.44 acres of open space with location to be determined later; requiring a schematic for the open space to be brought before Council prior to the final approval of the block north of the Brownstones; and requiring the open space north of the Brownstones to be open to the public. Motion: Terrell Second: Muzyka Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Agenda Item No. 6E. Ordinance No. 480-526 2nd Reading (ZA07-049), Zoning Change and Site Plan for Department of Public Safety Central Facility on property being legally described as Lots lA R. Eads No. 481 Addition and a portion of Tract 3J, R. Eads Survey, Abstract No. 481 and being located at 245 and 667 North Carroll Avenue. Current Zoning: CS Community Service District DT Downtown District and C-3 General Commercial District. Requested Zoning: S-P-1 Detailed Site Plan District. SPIN Neighborhood #8. Director Baker presented this item to Council in conjunction with items 6D, 6F and 6G. In accordance with Section 4.21 of the City Charter, the caption for this item is listed as follows: AN ORDINANCE AMENDING ORDINANCE NO. 480, AS AMENDED, THE COMPREHENSIVE ZONING ORDINANCE OF THE CITY OF SOUTHLAKE, TEXAS; GRANTING A ZONING CHANGE ON A CERTAIN TRACT OR TRACTS OF LAND REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page 6 of WITHIN THE CITY OF SOUTHLAKE, TEXAS, BEING LEGALLY DESCRIBED AS LOT IA, R. EADS NO. 481 ADDITION AND A PORTION OF TRACT 3J, R. EADS SURVEY, ABSTRACT NO. 481, AND MORE FULLY AND COMPLETELY DESCRIBED IN EXHIBIT "A" FROM "CS" COMMUNITY SERVICE DISTRICT, "DT" DOWNTOWN DISTRICT AND "C-3" GENERAL COMMERCIAL DISTRICT TO 4'S-P-1" DETAILED SITE PLAN DISTRICT WITH AMENDED "CS" COMMUNITY SERVICE DISTRICT USES, SUBJECT TO THE SPECIFIC REQUIREMENTS CONTAINED IN THIS ORDINANCE; CORRECTING THE OFFICIAL ZONING MAP; PRESERVING ALL OTHER PORTIONS OF THE ZONING ORDINANCE; DETERMINING THAT THE PUBLIC INTEREST, MORALS AND GENERAL WELFARE DEMAND THE ZONING CHANGES AND AMENDMENTS HEREIN MADE; PROVIDING THAT THIS ORDINANCE SHALL BE CUMULATIVE OF ALL ORDINANCES; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR A PENALTY FOR VIOLATIONS HEREOF; PROVIDING A SAVINGS CLAUSE; PROVIDING FOR PUBLICATION IN THE OFFICIAL NEWSPAPER; AND PROVIDING AN EFFECTIVE DATE. No one spoke during the public hearing. Motion was made to approve Ordinance No. 480-526, 2nd Reading (ZA07-049), Zoning Change and Site Plan for Department of Public Safety Central Facility subject to the Site Plan Review Summary No. 2, dated June 1, 2007, noting that the zoning will follow the uses, regulations, and design guidelines of the "DT" Downtown District, to include a two level structured parking garage as a permitted use. Motion: Terrell Second: Hill Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Agenda Item No 6F. ZA07-055 Revised Preliminary Plat for Blocks 11, 15, and 16 and a portion of Block 12, and includes portions of Division Street and State Street Southlake Town Square being approximately 23 acres located at 245 and 667 North Carroll Avenue and 1297 and 1299 Division Street. Current Zoning: C-3 General Commercial District, CS Community Service District and DT Downtown District. Proposed Zoning: S-P-1 Detailed Site Plan District, C-3 General Commercial District and DT Downtown District. SPIN Neighborhood #8. Director Baker presented this item to Council in conjunction with items 6D, 6E and 6G. Motion was made to approve ZA07-055, Revised Preliminary Plat for Blocks 11, 15 and 16 and a portion of Block 12, and includes portions of Division Street and State Street, Southlake Town Square, subject to Revised Preliminary Plat Review Summary No. 1, dated June 1, 2007. Motion: Terrell Second: Hill Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page 7 of 1X Agenda Item No 6G ZA07-065 Plat Revision for Lot 1R Richard Eads No. 481 Addition, also to be known as the Department of Public Safety Central Facilitbeing approximately 5 acres located at 245 and 667 North Carroll Avenue. Current Zoning: C-3 General Commercial District, CS Community Service District and DT Downtown District. Proposed Zoning: S-P-1 Detailed Site Plan District. SPIN Neighborhood #8. Director Baker presented this item to Council in conjunction with items 6D, 6E and 6F. Motion was made to approve ZA07-065, Plat Revision for Lot 1R, Richard Eads No. 481 Addition, also to be known as the Department of Public Safety Central Facility subject to Plat Review Summary No. 1, dated June 1, 2007. Motion: Terrell Second: Hill Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Agenda Item No. 6H. Ordinance No. 480-527 2"d Reading(ZA07-052), Zoning Change and Concept Plan for Southlake Regional Medical Center located at 335 State Highway 114. Current Zoning: AG Agricultural and SF-lA Single Family Residential District. Requested Zoning: S-P- 2 Generalized Site Plan District. SPIN Neighborhood #11. Director Baker presented this item to Council. Applicant Jim Williams, President of LandPlan Corporation, 5400 Dallas Parkway, Frisco, Texas, made a presentation and answered Council's questions. Applicant representative Mark Kennedy, 2703 Telecom Parkway, Frisco, Texas, answered questions regarding the doctor- owned facilities. Applicants Doug Mousel from LandPlan Corporation and Architect Fernando Andrade also answered Council's questions. In accordance with Section 4.21 of the City Charter, the caption for this item is listed as follows: AN ORDINANCE AMENDING ORDINANCE NO. 480, AS AMENDED, THE COMPREHENSIVE ZONING ORDINANCE OF THE CITY OF SOUTHLAKE, TEXAS; GRANTING A ZONING CHANGE ON A CERTAIN TRACT OR TRACTS OF LAND WITHIN THE CITY OF SOUTHLAKE, TEXAS, BEING LEGALLY DESCRIBED AS BLOCK 1, BRIGHTBILL ADDITION & TRACTS 3ElA, 3E1B, & 3E1C, SITUATED IN THE L. CHIVERS SURVEY, ABSTRACT NO. 300, BEING APPROXIMATELY 30 ACRES, AND MORE FULLY AND COMPLETELY DESCRIBED IN EXHIBIT "A" FROM "AG" AGRICULTURAL DISTRICT AND "SF-IA" SINGLE FAMILY RESIDENTIAL DISTRICT TO "S-P-2" GENERALIZED SITE PLAN DISTRICT WITH LIMITED "0-2" OFFICE DISTRICT USES, AS DEPICTED ON THE APPROVED CONCEPT PLAN ATTACHED HERETO AND INCORPORATED HEREIN AS EXHIBIT "B", SUBJECT TO THE SPECIFIC REQUIREMENTS CONTAINED IN THIS ORDINANCE; CORRECTING THE OFFICIAL ZONING MAP; PRESERVING ALL OTHER PORTIONS OF THE ZONING ORDINANCE; DETERMINING THAT THE PUBLIC INTEREST, MORALS AND GENERAL WELFARE DEMAND THE ZONING CHANGES AND AMENDMENTS HEREIN MADE; PROVIDING THAT THIS ORDINANCE SHALL BE CUMULATIVE OF ALL ORDINANCES; PROVIDING A SEVERABILITY CLAUSE; PROVIDING FOR A PENALTY FOR VIOLATIONS HEREOF; PROVIDING A SAVINGS CLAUSE; PROVIDING FOR REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page 8 of 15L PUBLICATION IN THE OFFICIAL NEWSPAPER; AND PROVIDING AN EFFECTIVE DATE. Mayor Wambsganss opened the public hearing. Mike Lafavers, 303 East Highland, Southlake, Texas, spoke in support. L.O. Brightbill, 335 East Northwest Parkway, Southlake, Texas, did not speak but recorded his support. Gary Fawks, 330 Ravenaux, Southlake, Texas, voiced several concerns to the Council and asked them to deny the requested variances. Mayor Wambsganss closed the public hearing. Council continued discussion of this item and asked additional questions of the applicant. Motion to approve Ordinance No. 480-527, 2„d Reading (ZA07-052), Zoning Change and Concept Plan for Southlake Regional Medical Center noting approval will be subject to developer's presentation which will be provided to staff; subject to plans being submitted by the applicant; subject to Concept Plan Review Summary No. 3, dated July 11, 2007, granting driveway spacing and stacking depth variances; adding landscaping and bufferyard along the entire State Highway 114 frontage with the first phase; requiring live oak or red oak trees along the western edge of phase 1 with ornamentals; west elevation of the west garage elevation needs additional review at the time of final approval, especially if the adjacent site is not built; requiring the clock tower, fountains, and entrance features (porte-cochere) in phase 1 to be built as shown in the concept plan understanding that the top portion of the center, that would be the bridge between the two buildings, will not be built in phase 1 and the building heights may end up being slightly lower than shown in phase 1 with the maximum height of what is shown on plans; requiring developer to retain existing buffers along Highland until construction of the phase adjacent to the buffer, the landscaping and berm along Highland will be added in at the commencement of construction of each phase as each phase is constructed; requiring the pruning and trimming of any existing landscaping buffers along Highland; requiring internal sidewalks to be a minimum of five feet in width; requiring the masonry list to exclude tilt wall panels entirely; noting the number of beds to be approximately 61 beds for phase 1, in-patient suites will all be private suites; allowing a maximum of 358 beds; requiring the height of parking garages closest to Highland - 5 levels maximum; requiring the parking garage design - external building material (e.g. cast stone) of the parking garage should be the same as the main buildings, cornice to match; regarding landscaping - not granting the waiver on the parking garage footprint requirements as requested; requiring parking along Highland to be limited to phase 1 parking as shown on the plan (but revisit in Phase 2); parking ratios in accordance with the development regulations and surface parking limited to areas shown on the Concept Plan as parking or parking REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page 9 of 1 garages unless approved by Council; requiring continuous planting along the Highland berm with 3' high berm and shrubs 5-6' in height and the berm and shrubs together a minimum of 12' in height at maturity; and shrubs a maximum 5' center to center with accent and canopy trees based on ordinance); eliminating the nursing home use as a permitted use; requiring the awning treatments which will make the buildings look less institutional; and allowing no construction traffic on Highland (construction entrance off of State Highway 114 only presupposing TxDOT approval). Motion: Terrell Second: Jones Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Mayor Wambsganss called for a break at 9:11 p.m. and reconvened the meeting at 9:37 p.m. Agenda Item No. 61. ZA07-053 Revised Site Plan for Harris Methodist Southlake expansion on property being legally described as Lot 1R Block 1 Gorbutt Addition, located at 1545 East Southlake Boulevard. Current Zoning: S-P-2 Generalized Site Plan District. SPIN Neighborhood #8. Chief Planner Narayana presented this item to Council. No one spoke during the public hearing. Motion was made to approve ZA07-053, Site Plan for Harris Methodist Southlake expansion subject to Revised Site Plan Review Summary No. 2, dated June 29, 2007, granting the requested variances. Motion: Jones Second: Muzyka Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Agenda Item No 7A. Ordinance No. 480-521 1St Reading~(ZA07-005), Zoning Change and Site Plan for Chapel Crossing. Shopping Center, located at 245 West State Highway 114 and 200 Countryside Court. Current Zoning: AG Agricultural District and C-1 Neighborhood Commercial District. Requested Zoning: S-P-2 Generalized Site Plan District. SPIN Neighborhood #11. Director Baker presented this item to Council. Applicant Brenda McDonald, on behalf of Greenway Investment, made a presentation and answered Council's questions. Council discussed this request. Motion was made to approve Ordinance No. 480-521, 1St Reading (ZA07-005), Zoning Change and Site Plan for Chapel Crossing Shopping Center, subject to Site Plan Review Summary No. 6, dated July 11, 2007, granting the requested variances for driveway spacing and stacking; subject to applicant's presentation and renderings presented tonight; noting applicant will look at creating some knee walls of a minimum of 24 inches in height in the various window areas and will provide a rendering of the knee walls at 2nd reading; requiring color palette to be similar to REGULAR CITY COUNCIL MEETING MINUTES, JUL Y 17, 2007 Page 10 of what was presented; requiring applicant to bring back some language regarding the fireplace amenity feature that will obligate the tenant of that space to certain operational hours and maintenance; requiring applicant to review monument signs with the intent to have less percentage of signage on the monument face; allowing only the cornices and accents to have any synthetic stucco; requiring the applicant to visit with Mr. Larson regarding his comments prior to 2„d Reading; requiring the detention area to have stained concrete; requiring the trees in the detention area to be a minimum of 5 to 6 inches caliper to be an effective screening at the time of planting; requiring applicant to look at increasing the berm along SH114 to a minimum of 3 feet in height; to look at angled parking and fewer parking spaces between Buildings A and B; applicant to put in median along White Chapel Boulevard if it hasn't already been placed prior to the issuance of a C.O. and subject to the approval of the City Engineer; and trees shown on end cap need to be shown on site plan. Motion: Terrell Second: Stansell Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Agenda Item No. 7B. Ordinance No. 480-386b, 1" Reading (ZA07-054), Zoning Change and Revised Site Plan for Cristina's Fine Mexican Restaurant located at 2707 East Southlake Boulevard. Current Zoning: S-P-2 Generalized Site Plan District. Requested Zoning: S-P-2 Generalized Site Plan District. SPIN Neighborhood #7. Chief Planner Narayana presented this item to Council. Applicant Brian Yengling of Yengling Architects answered Council's questions, and business owner Arturo Vargas introduced his business to Council. Motion was made to approve Ordinance No. 480-386b, I" Reading (ZA07-054), Zoning Change and Revised Site Plan for Cristina's Fine Mexican Restaurant, subject to Revised Site Plan Review Summary No. 2, dated July 11, 2007, and granting requested variances. Motion: Stansell Second: Terrell Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Agenda Item No. 9A. ZA07-029, Preliminary Plat for Autumn Creek located at 321, 331, and 333 West Highland Street. Current Zoning: SF-lA Single Family Residential District. SPIN Neighborhood #10. Chief Planner Narayana presented this item to Council in conjunction with item 9B. Applicant Scott Levell, 208 Van Oaks Drive, Colleyville, Texas, answered Council's questions. Motion was made to approve ZA07-029, Preliminary Plat for Autumn Creek subject to Plat Review Summary No. 4, dated June 29, 2007. Motion: Terrell Second: Jones Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page 11 of IX Approved: 6-0 Agenda Item No. 9B. ZA07-033, Plat Revision for Autumn Creek being a revision of Lots 5R1- 5R3, Block 1, T.M. Hood No. 706 Addition, located at 321, 331, and 333 West Highland Street. Current Zoning: SF-lA Single Family Residential District. SPIN Neighborhood #10. Chief Planner Narayana presented this item to Council in conjunction with item 9A. Applicant Scott Levell, 208 Van Oaks Drive, Colleyville, Texas, answered Council's questions. Motion was made to approve ZA07-033, Plat Revision for Autumn Creek being a revision of Lots 5R1-5R3, Block 1, T.M. Hood No. 706 Addition subject to Plat Review Summary No. 4, dated June 29, 2007. Motion: Terrell Second: Muzyka Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Agenda Item No. 9C. Consider SP07-182, Variance to Sign Ordinance No. 704-C for Cornerstone Plaza, located at 2707, 2717, and 2729 East Southlake Boulevard. Chief Planner Narayana presented this item to Council. Applicant Christine Sotello with Schafer Plaza 25 made a presentation and answered Council's questions. Council discussed this request. After discussion, Ms. Sotello asked to table this item to the next meeting. Motion was made to table SP07-182, Variance to Sign Ordinance No. 704-C for Cornerstone Plaza, located at 2707, 2717, and 2729 East Southlake Boulevard, to the August 7, 2007, regular City Council meeting. Motion: Terrell Second: Jones Ayes: Hill, Jones, Muzyka, Stansell, Terrell, Wambsganss Nays: None Approved: 6-0 Agenda Item No. 11. Adjournment. Mayor Wambsganss adjourned the meeting at 11:31 p.m. *An audio recording of this meeting will be permanently retained in the City Secretary's Office. Andy Wain sganss °,1~Y~~wfea'rosp~®sr Mayor ATTEST: s~ 0 -A - ~t m m o d r n Lori Payne, TRMC REGULAR CITY COUNCIL MEETING MINUTES, JULY 17, 2007 Page 12 of 1 2- 11 C/) E -0 O - N O O L 4) M 0 O CL ~ O O ~ a) co U =3 0 o co U. LL w~ 0 % C c = 3 I~.• c °c o E ~ V Values Ira te~;ritt[itIiovatioii 4cCoufitabilitI, Curl mit»rem to Excellence TewitworA Finance Department's ~ II;~ Quarterly Review 7 For the period ended June 0 _()0 it OfSouthlake JUIN7 2007 To: Shana Yelverton, City Manager Jim Blagg, Assistance City Manager From: Sharen Jackson, Finance Director Re. • Third Quarter FY 2007 Financial Report Date: July 17, 2007 The finance department is pleased to submit a financial report for the third quarter of FY 2007 period ended June 30, 2007. This report contains financial statements for the City's operating funds status reports of the Capital Projects and a report of the City 's Investment portfolio. GENERAL FUND REVENUES Property tax. In the General Fund, $12,767,038 of $12,953,276 or 98.6% of budgeted property tax has been collected. Since property tax bills are delinquent as of February 1, j 1 most tax collections are received in the first four months of the fiscal year. It is anticipated that collections will meet projections. Tarrant County has collected the City's taxes since 1982. Sales tax. Sales tax budgeted for Fiscal Year 2007 is $7,812,000. For FY 2007 third quarter (October through June) the City has collected $5,784,958 in sales tax. This is 14.0% or $709,104 above the projected amounts to date. The significant increase is due to budget collections are net Grand Avenue 380 agreement and actual collections include 100% of Grand Avenue sales tax collections. ~i Franchise fees. Franchise fees include amounts received for use of public rights of way from utility companies. To date the City has received $1,501,207 of $2,188,723 budgeted. Oncor began remitting franchise payments quarterly as opposed to annually in prior years; therefore the collections to date are higher when compared to FY 2006. Fines/forfeitures. Revenues from Fines and Forfeitures are $698,474, which is 57.4% of III the $1,216,000 budgeted. This revenue source depends on many variables, such as the number of citations issued, warrants issued and collected, plus the number of cases assigned to deferred adjudication. Citation volume is lower FY 2007 compared to the ~j i i i I same period in FY 2006. Citation volume is expected to remain consistent, staff will continue to monitor revenues and make any necessary budget amendments this summer during the budget process. II Charges for services. This category includes revenue from ambulance transport, recreation class fees, and amounts received from the Cities of Grapevine and Colleyville for participation in the Teen Court program. Revenue to date total $619,005, compared majority of the with $566,806 collected for the same period in the prior year. The increase in collections for FY 2007 is related to the increase in ambulance revenue for FY 2007. During 2006, City Council approved a contract with Intermedix for ambulance billing; we have collected $72,036 more in ambulance revenue to date compared for the same period in FY 2006. It is anticipated that revenue from Charges for Services will be slightly above budgeted amounts any necessary budget amendments will be included in the budget process this summer. I, Permits/fees. Revenues from permits and fees are $1,509,334, or 90.5% of the budgeted j amount of $1,667,960. This is comparable to $1,361,941 collected as of June 30, 2006. 145 residential permits have been issued to date compared to 122 issued in the prior fiscal year third quarter. The residential permits issued for FY 2007 are for homes with higher values on average approximately $106,776 higher in value. 20 and 28 commercial permits were issued as of the third quarter June 30, 2007 and June 30, 2006, respectively. Miscellaneous. This category includes amounts from tower leases, the 10% administrative fee retained from Municipal Court State taxes remitted quarterly to the Comptroller, and library fees/fines. The City has received $463,173 to date. Revenues from miscellaneous income will exceed the $484,966 budgeted any required budget amendments will be recommended during the budget process this summer. Interest income. Interest earnings to date total $207,954. The total collected is on target with the $250,000 budgeted for the year. GENERAL FUND EXPENDITURES For the third quarter ending June 30, 2007 of the fiscal year, General Fund total g expenditures are $17,995,977 or 66.1% of the $27,216,997 amended budget. A brief discussion of each department will follow, providing a summary explanation of major expenditures trends. General government department. Department expenditures for the City Secretary's Office, Human Resources, City Manager's Office and Support Services total $3,213,752, which is 63.0% of budget. Personnel, legal services and utility expenditures are on target with budget. Therefore it is anticipated that expenditures in General Government will be within the amount budgeted. f ~I i Finance department. For the Finance, Municipal Court, Teen Court Divisions, total expenditures to date are $1,189,540 or 73.5% of the $1,618,177 budgeted. Personnel, operations and capital expenditures are within budget. Public safety department. Total expenditures for Police Services, Fire Services, Public Safety Support, and Building Inspections are $8,131,490, which is 69.9% of the $11,638,136 budgeted. Currently, public safety expenditures are within budget and on target for the fiscal year. Public works department. Budgeted within this department are Streets/Drainage, and Pub o Expenditures to date are $1,663,037 or 64.8/0 of the Public Works Administration. budgeted. Personnel, operations and capital $2,565,721 expenditures are within budget. Planning department. The department has expended $588,572 or 63.2% of the $931,298 budgeted for the year. Expenditures in the Department are within budgeted. Economic development department. The department has expended $213,979, or 54.7% of the $391,541 budgeted for the year. Expenditures in the Department are within budget. Community services department. Total expenditures for Community Services, Parks I,~I and Recreation, and Library Services are $2,995,607 or 60.2% of the $4,973,928 budgeted. Personnel expenditures are on target with budget. Expenditures in the ~I Department are expected to be within budget projections. j WATER AND SEWER ENTERPRISE FUND Revenues. As of June 30, 2007, the City has received $11,182,227 or 61.6% in revenues of the $18,148,000 estimated. This is less than the prior year collections of $12,378,670 received through June of last year. The reduction in 2007 collections is due to the extremely rainy season we have experienced. The majority of revenue is received in the summer months however we will continue to monitor the revenue collections and make any recommended budget amendments. i Expenses. The City has expended $10,743,547 or 59.5% of the $18,052,854 budgeted for personnel, operations, capital, and debt services. Of the total expenses, $2,731,798 has been paid to the City of Fort Worth for treated water. STORMWATER ENTERPRISE FUND i Revenues. On October 17, 2006 City Council approved Ordinance No. 900 and 901 establishing the Storm water Drainage Utility System and establishing the fee j j respectively. The revenues of $644,494 or 73.5% of estimated revenue of $903,500 as of June 30, 2007 reflect a partial year of collections. i I i j , Expenses. The City has expended $222,708 on a capital purchase of a new gradall. The equipment will be used to grade drainage channels and roadside ditches. DEBT SERVICE FUND Revenues. The City has received $5,717,202 in current and delinquent property taxes through June 30, 2007. This fund pays the property tax supported debt requirements for the city. The first semi-annual payments were paid February 2007 totaling $3,026,534. DEVELOPMENT CORPORATION SPDC SOUTHLAKE PARKS ( ) Operating Fund. As of June 30, 2007, $2>849 X08 in the /z cent sales tax has been collected. SPDC sales tax receipts are 3.7% above estimates, or $101,003. CRIME CONTROL AND PREVENTION DISTRICT (CCPD) / cent sales tax has been b Operating Fund. As of June 30, 2007, $2,780,296 in the 2 collected. Sales tax receipts are 1.1% above estimates, or $31,392. PARK DEDICATION FEE FUND II' Revenues. The City has collected $77,041 of the $60,000 budgeted for the year. This revenue source varies depending on the number of developments during a fiscal year, and the park dedication fee credits given, if any, for open space and amenities. The park land dedication revenue will be amended during the budget process this summer to better reflect actual collections for FY 2007. TAX INCREMENT FINANCIAN DISTRICT (TIF) Revenues. To date TIF received $2,029,503 in revenues for the fiscal year. Historically, the TIF revenues are not collected until the third and fourth quarter of the fiscal year. i STRATEGIC INITIATIVE FUND i Expenditures. As of June 30, 2007 the expenditures were $1,383,085 majority related to ! sidewalks, software conversion and fire ladder tuck initial payment. ~I I i~ GENERAL FUND Statement of Revenues, Expenditures and Changes in Fund Balance for the period ended June 30, 2007 with comparative actual amounts for the period ended June 30, 2006 (fiscal month 9-75.00%) AMENDED Percent Year to Date 2006/07 Collected/ Year to Date REVENUES 6/30/07 Budeet Expended 6/30/2006 Ad Valorem Taxes $12,767;038 $12,953,276 98.6% $12,280,676 Sales Tax 5;875,369 7,952,000 73.9% 5,329.124 Franchise Fees 1,501,207 2,188,723 68.6% 1;176,158 Fines 698,474 1,216,000 57.4% 967,557 Charges for Services 619,005 729,612 84.8% 566,806 Permits/Fees 1,509,334 1;667,960 90.5% 1,361,941 Miscellaneous 463,173 484,966 95.5% 445.232 Interest Income 207.954 250.000 83.2% 195.855 Total Revenues $23,641,554 $27,442,537 86.1% $22,323,349 EXPENDITURES City Secretary $215,727 $351,920 61.3% $193,843 Human Resources 257,810 382,214 67.5% 254,247 City Manager 353,864 585,752 60.4% 333,977 Support Services 2.386.351 3.778.310 63.2% 2.218.522 General Government Total 3,213,752 5,098,196 63.0% 3.000,589 Finance 722,471 965,864 74.8% 635,872 Municipal Court 387;317 534,089 72.5% 303,727 Municipal Court-Teen Court 79.752 118.224 67.5% 48.543 Finance Total 1.189,540 1.618377 73.5% 988.142 Fire 2,562,338 3.802.935 67.4% 2,210,716 Police 4.239.604 5;600,222 75.7% 3.313,753 Public Safety Support 836,970 1.515.609 55.2% 1.015.883 Building 492.578 719.370 68.5% 576.678 Public Safety Total 8,131,490 11.638.136 69.9% 7,117,030 Streets/Drainage 1,035,493 1,589,732 65.1% 936.384 Public Vdorks Administration 627.544 975.989 64.3% 530.578 Public Works Total 1.663.037 2,565,721 64.8% 1,466,962 Planning 588.572 931.298 63.2% 437.097 Planning Total 588.572 931,298 63.2% 437,097 Economic Development 213.979 391.541 54.7% 222.603 Economic Development Total 213,979 391.541 54.7% 222,603 Conununity Services 390,356 524;061 74.5% 250,324 Parks and Recreation 2,242,204 3,969,702 56.5% 2.100.566 Library Services 363.047 480.165 75.6% 308.638 Community Services Total 2,995,607 4,973,928 60.2% 2.659.528 Total Expenditures $17,995,977 $27,216,997 66.1% $15.891351 Excess (deficiency) of Revenue over Expenditures $5.645.577 $225.540 $6,431.398 OTHER FINANCING SOURCES AND (USES) Proceeds from lease/CO (net) $0 $0 $0 Transfer In-Other Funds 0 295,752 0 Transfer To-Other Funds (1.700.000) (3.160.000) Total Other Sources/(Uses) $0 ($1,404,248) ($3,160.000) Excess (deficiency) of Revenues/other sources over Exp. $5.645.577 ($1.178.708) $3271.398 FUND BALANCE OCT 1 $7,985,520 Change in reserved fund balance $0 ENDING FUND BALANCE $6.806.812 fund balance percentage 25.01% WATER AND SEWER ENTERPRISE FUND Comparative Statement of Revenues and Expenses for the period ended June 30, 2007 and June 30, 2006 (fiscal month 9-75.M%) AMENDED Percent Year to Date 2006./07 Collected, Year to Date REVENUES 6/30/07 Budaet Ex ended 6/30/2006 Water Sales-residential $5,379,981 $10,200,000 52.7% $6,712,833 Water Sales-commercial 1,723,632 2,800,000 61.6% 1.835.271 Sewer Sales 2,868,809 3.700,000 77.5% 2,684,270 Sanitation Sales 729,873 960,000 76.0% 762,519 Other utility charges 204.378 285.500 71.60io 169,720 Miscellaneous 126,874 102,500 123.8% 141.308 Interest Income 148.680 100.000 148.7% 72.749 Total Revenues $11,182,227 $18,148,000 61.6% $12.378,670 EXPENSES Water $4,715,096 $9,601.024 49.1% $4,772,504 Utility filling 198,469 358.863 55.3% 167.385 Sewer 965,569 1.922,268 50.2% 972.935 Sanitation 493.893 754.500 65.5% 479,528 Debt Service 4.370.520 5.416.199 80.7% 4.284.645 Total Expenses $10,743,547 $18,052,854 59.5% $10.676,997 Excess (deficiency) of Revenue over Expenses $438.680 $95,146 $1.701.673 OTHER FINANCING SOURCES AND (USES) Transfer In-Other Funds $0 $0 Developer Contributions $0 $50,000 $0 Transfer Out-Other Funds 0 (275.595) 0 Total Other Sources/(Uses) $0 ($225595) $0 Excess (deficiency) of Revenues and other sources over Expenses $438.680 ($130.449) $1.701.673 CITY OF SOUTHLAKE 1% SALES TAX REPORT 2006-07 Collected Budget Balance Budget to Date Balance Percent $ 7,812,000 $5,784.958 $2,027,042 25.95% FISCAL FISCAL FISCAL YEAR % Inc YEAR % Inc YEAR % Inc MONTH 04-05 -Dec 05-06 -Dec 06-07 -Dec October 412,698 13.2% 933,496 126.2% 674,934 -27.7% November 469,819 26.5% 520,781 10.8% 6192509 19.0% December 719,323 18.3% 823,106 14.4% 1,106,026 34.4% January 435,716 23.1% 499,821 14.7% 559,469 11.9% February 410,409 28.1% 477,019 16.2% 611,242 28.1% March 639,509 26.7% 733,397 14.7% 804,752 9.7% April 491,822 18.4% 619,820 26.0% 664,768 7.3% May 490,073 8.0% 632,954 29.2% 744,258 17.6% June 628,183 26.8% 899,050 43.1% 0 -100.0% July 450,490 9.4% 509,767 13.2% 0 -100.0% August 519,327 33.4% 642,637 23.7% 0 -100.0% September 613,024 21.8% 773,386 26.2% 0 -100.0% TOTAL $6,280,392 $8,065,233 $5,784,958 Three Year Revenue Comparison by Month 1,2D0,000 I 1,000,000 800,000 i 600,DD0 400,000 200,000 p o~ o1 o`O o0 o`O o~ o~` 'A cpl~ e<61 40 ®FISCAL YEAR 04-D5 ®FISCAL YEAR 05-06 ❑FISCAL YEAR 06-07 Actual Budget Actual Estimated (budget-est.) % Month 2005-06 2006-07 2006-07 2006-07 Difference Change October(*) $ 933,496 $ 549,186 $ 674,934 $ 674,934 $ 125,748 13.52% November(*) $ 520,781 $ 564,430 $ 619,509 $ 619,509 $ 55,079 10.69% December(*) $ 823,106 $ 892,262 $ 1,106,026 $ 1,106,026 $ 213,764 26.07% January(*) $ 499,821 $ 549,127 $ 559,469 $ 559,469 $ 10,342 2.09% February(*) $ 477,019 $ 522,041 $ 611,242 $ 611,242 $ 89,201 18.70% March(*) $ 733,397 $ 785,370 $ 804,752 $ 804,752 $ 19,383 2.66% April $ 619,820 $ 600,359 $ 664,768 $ 664,768 $ 64,409 11.96% May(*) $ 632,954 $ 613,080 $ 744,258 $ 744,258 $ 131,178 23.85% June $ 899,050 $ 870,822 $ - $ 870,822 $ - 0.00% July $ 509,767 $ 493,762 $ - $ 493,762 $ - 0.00% August(*) $ 642,637 $ 622,460 $ - $ 622,460 $ - 0.00% September(*) $ 773,386 $ 749,103 $ - $ 749,103 $ - 0.00% TOTAL $ 8,065,233 $ 7,812,000 $ 5,784,958 $ 8,521,105 $ 709,105 * Beginning April 2006 includes Grand Avenue sales tax collections per 380 agreement 80% of collections will be distributed to Cooper & Stebbins SOUTHLAKE PARKS DEVELOPMENT CORPORATION 1/2% SALES TAX REPORT 2006-07 Collected Budget Balance Budget to Date Balance Percent $ 4.285,000 $2.849.308 $1.435.692 33.51% FISCAL FISCAL FISCAL YEAR % Inc YEAR % Inc YEAR % Inc MONTH 04-05 -Dec 05-06 -Dec 06-07 -Dec October $203,269 13.2% $459,781 126.2% $332,430 -27.7% November 231,403 26.5% 256,504 10.8% 305,131 19.0% December 354,293 18.3% 405,410 14.4% 544,759 34.4% January 214,607 23.3% 246,505 14.9% 275,560 11.8% February 202,142 28.1% 234,949 16.2% 301,059 28.1% March 314,982 26.7% 361,225 14.7% 396,371 9.7% April 242,241 18.4% 305,284 26.0% 327,423 7.3% May 241,379 8.0% 311,753 29.2% 366,575 17.6% June 309,404 39.5% 442,816 43.1% - -100.0% July 221,883 9.4% 251,080 13.2% - -100.0% August 255,788 33.4% 316,523 237% - -100.0% September 301,937 21.8% 380,921 26.2% - -100.0% TOTAL $3,093,328 $3,972753 $2,849,308 it Three Year Revenue Comparison by Month $600,000 $5DO.DOO $4DO,DOD j $300,OOO $200,000 $100, ODD $0 Ob 00 0o O1 OA 01 01 01 O~ OS\ OA 01 Op~°, O~G ~a~ F~~ ~a~ PQ~ ~Sa~ )J~~ ~J\ PJ°' Sep i N FISCAL YEAR 04-05 ® FISCAL YEAR 05-D6 ❑ FISCAL YEAR 06-07 Actual Budget Actual Estimated (budget-est.) % 2005-06 2006-07 2006-07 2006-07 Difference Change October $ 459,781 $ 295,919 $ 332,430 $ 332,430 $ 36,511 7.35% November $ 256,504 $ 305,665 $ 305,131 $ 305,131 $ (534) -0.19% December $ 405,410 $ 467,274 $ 544,759 $ 544,759 $ 77,485 17.70% January $ 246,505 $ 295,880 $ 275,560 $ 275,560 $ (20,320) -7.63% February $ 234,949 $ 282,416 $ 301,059 $ 301,059 $ 18,644 7.35% March $ 361.225 $ 418;617 $ 396,371 $ 396,371 $ (22,246) -5.70% April $ 305;284 $ 337,279 $ 327,423 $ 327,423 $ (9,856) -2.99% May $ 311,753 $ 345,256 $ 3663575 $ 366,575 $ 21,319 5.95% June $ 442,816 $ 486,620 $ - $ 486,620 $ - 0.00% July $ 251,080 $ 279,814 $ - $ 279,814 $ - 0.00% August $ 316,523 $ 350,401 $ - $ 350,401 $ - 0.00% September $ 380,921 $ 419,861 $ - $ 419,861 $ - 0.00% TOTALS $ 3,972,753 $ 4,285,000 $ 2,849,308 $ 4,386,002.68 $ 101,003 SOUTHLAKE CRIME CONTROL AND PREVENTION DISTRICT 1/2% SALES TAX REPORT 2006-07 Collected Budget Balance Budget to Date Balance Percent $ 4.255.000 $2,780,296 1.549.064 36.41% Fiscal Year Percent Fiscal Year Percent Fiscal Year Percent 2004-05 Increase/ 2005-06 Increase/ 2006-07 Increase/ MONTH Actual (Decrease) Actual (Decrease) Actual (Decrease) October $208,809 15.75% $461,119 120.83% $304,276 -34.01% November 235,483 27.17% 258,824 9.91% 308,020 19.01% December 336,549 18.78% 371,963 10.52% 523,323 40.69% January 221,418 25.55% 246,180 11.18% 290,761 18.11% February 205,904 31.16% 235,970 14.60% 301,199 27.64% March 295,147 34.53% 336,357 13.96% 382,088 13.60% April 246,608 20.52% 303,289 22.98% 311,411 2.68% May 245,721 10.69% 314,379 27.94% 359,218 14.26% June 280,578 21.34% 422,323 50.52% - -100.00% July 220,410 7.38% 255,215 15.79% - -100.00% August 252,803 29.49% 311,137 23.07% - -100.00% September 276,077 21.90% 340,310 23.27% - -100.00% TOTAL $3,025,507 $3,857,066 $2,780,296 Three Year Revenue Comparison by Month $6DO,ooo $500,000 $400.000 $3DO,DDO $2D0,DD0 I $10o,DD0 $D . 00 00 00 0A o' o'A CIA oA o) II ~o ~e a e ■ Fiscal Year 2004-05 Actual ® Fiscal Year 2005-06 Actual ■ Fiscal Year 2006-07 Actual Actual Budget Actual Estimated (budget-est.) % 2005-06 2006-07 2006-07 2006-07 Difference Change October $ 461,119 $ 298,693 $ 304,276 $ 304,276 $ 5,583 1.12% November $ 258,824 $ 318,527 $ 308,020 $ 308,020 $ (10,507) -3.76% December $ 371,963 $ 440,338 $ 523,323 $ 523,323 $ 82,985 20.66% January $ 246,180 $ 300,579 $ 290,761 $ 290,761 $ (9,818) -3.69% February $ 235,970 $ 289,315 $ 301,199 $ 301,199 $ 11,884 4.66% March $ 336,357 $ 400,059 $ 382,088 $ 382,088 $ (17,971) -4.95% April $ 303,289 $ 344,579 $ 311,411 $ 311,411 $ (33,168) -10.13% May $ 314,379 $ 356,813 $ 359,218 $ 359,218 $ 2,404 0.63% June $ 422,323 $ 475,894 $ - $ 475,894 $ - 0.00% July $ 255,215 $ 291,546 $ - $ 291,546 $ - 0.00% August $ 311,137 $ 353,237 $ - $ 353,237 $ - 0.00% September $ 340,310 $ 385,420 $ - $ 385,420 $ - 0.00% TOTAL $ 3,857,066 $ 4,255,000 $ .2,780,296 $ 4,286,392 $ 31,392 v> cm Ri ~ a m U W cn W ~ Cr 0 N ~o O M Q. 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C C^ M O C O x ~n ^ C Cn C C C ~n r 0 M C C O ~"i v~ x7 ~ - N O M M r C O N V - n C x M M R-t ~n O M C M O f 'S JL u _ ~ ~ ~ Q - Y, M M ~ M^ M ~ O ^ .M_. r ...i ~ ` C r ~ ICJ a. r ^ N V~ c^, J yvj O U C O x ` x 7 N T= 3 X V; O ;J ^ M X X X x C M M C~ M M O` M N~~ M M M N 7 M M M M M ~ C a u c Crr~°vr onoc... ~xooxoonxr_°'aa ~ ov C 'n M G 'J^' M c C N N7 N N r C M V) x ~n N c^, ? ~ C ~ 7~ 7 V x d C U v^ O N p C C x O~ N N r, J C r a c o c. c o U s :z z 75 r7, 7. 7. 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O f<V v-O ~ v M r ,i` I,tLM< 'o - x Iln ri le O o i o d Z co 1 N I <j LI I I I C I Iz C I I ~ I C C _ I C II T I r N - T i V C Z. v n in I: ~ C - III ~~rw Z ~L o C I - I I ~ III fi ~ n II ~ C I I N ~ N < III h I I Z O C C o lc , ir. i o n 0 0 _ o c n II I C: n n `c; c £y - - 00 I c I o~ z - - ~ o 5 ~ `c c e _I o Q d^ III < C+ -yooJ . ~ G N- < < a 1V c U O~ J~ r U ~ s City of Southlake Finance Deoartment CITY OF SOUTHLAKE CAPITAL IMPROVEMENTS PROGRAM QUARTERLY STATUS REPORT June 30, 2007 The Capital Improvements Plan (CIP) establishes a five (5) year funding schedule for the purchase, construction or replacement of physical assets of the City. Capital improvements typically have a useful life of over ten (10) years and a value greater than $10,000. Most CIP projects typically involve major infrastructure development and improvement. CIP projects are primarily funded through General Obligation (GO) bonds and Revenue Certificates of Obligation. The City of Southlake's CIP Quarterly Status Report has been designed as a resource tool to be utilized by City staff, citizens of Southlake, and the community at large. The objective of this report is to provide timely and accurate information in a user friendly format regarding construction and other improvement projects in the City of Southlake. Projects within the City's CIP are categorized as follows: Street and Drainage Improvements, Traffic Management Projects, Water System Improvements, Sewer System Improvements, Crime Control Projects and Strategic Initiative Projects. 1400 Main Street Suite 440 • Southlake, TX 76092 (817) 748-8042 9 www.d.southlake.bcus TABLE OF CONTENTS Page Streets and Drainage Improvements ............................................................1 Traffic Management Projects ......................................................................4 Water System Improvements ......................................................................5 Sewer System Improvements .....................................................................7 Crime Control Projects ...........................................................................8 Strategic Initiative Projects ......................................................................9 CITY OF SOUTHLAKE, TEXAS FY 2006-07 CAPITAL IMPROVEMENTS PLAN Street & Drainage Improvement Projects Report Date: June 30, 2007 Title: Location: Project Description: FM 1938 Right-of-Way East side of Randol Mill from On December 31, 2001, the TCC approved a Minute Acquisition FM 1709 north to the city limits Order giving the extension of FM 1938 (FM 1709 to SH 114) along the Randol Mill ROW Priority II funding status and Farm to Market designation. This means the FM 1938 extension project will likely be funded. Tarrant County will be acquiring 120' of ROW for the project. An additional 16'-20' will need to be acquired by the City of Southlake to provide a buffer, landscaping, a trail, and a 24" water line. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $330,000 $167,690 $162,310 Fundinq Source(s): Status: G.O. Bonds, G.0 Bond Interest Waiting on TXDOT and FEDs to complete environmental studies. Tarrant County, through an interlocal agreement with the City, is in the process of obtaining right-of-way on the City's behalf. Completion Date: Fall 2008 Title: Location: Proiect Description: N. White Chapel Ultimate N. White Chapel from Emerald This project is for the design of the ultimate roadway Roadway to State Hwy. 114 section (4 lane divided) as depicted by the Thoroughfare Plan. This project also includes necessary drainage improvements. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $3,795,000 $202,436 $3,592,564 Funding Source(s): Status: G.O. Bonds, G.0 Bond Interest, Roadway Impact funds Preliminary design phase is complete. Final design phase in progress. Completion Date: Spring 2009 Pagel CITY OF SOUTHLAKE, TEXAS FY 2006-07 CAPITAL IMPROVEMENTS PLAN Street & Drainage Improvement Projects Report Date: June 30, 2007 Title: Location: Proiect Description: 2006 Street rehabilitation & Various locations throughout Design and rehabilitation or reconstruction of streets as reconstruction as required by the City. recommended by the Pavement Management System. the Pavement Management Project includes pavement rehab, HMAC overlays and System concrete street section replacements. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $1,769,275 $1,418,687 $350,588 Funding Source(s): Status: G.O. Bonds, G.O Bond Interest, residual funds Design is complete, project has been awarded to Sunmount Corp. Construction started in July. Completion Date: Summer 2007 Title: Location: Proiect Description: Sidewalks throughout the city Various locations Construction of sidewalks in areas where staff has received requests for the installation of sidewalks, primarily around schools and areas where sidewalks would improve pedestrian safety. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $624,070 $226,340 $397,730 Funding Source(s): Status: G.O. Bonds, Strategic Initiative Fund transfer In progress Completion Date: When funds are depleted Title: Location: Project Description: Roadway and drainage Shumaker Lane Construct paving and drainage on Shumaker Lane. This improvements street is a gravel street with storm water run-off that floods property to the west in Hunter's Ridge subdivision. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $409,218 $18,875 $390,343 Funding Source(s): Status: Strategic Initiative Fund transfer Design is complete and project will be bid this summer Completion Date: Spring 2008 Page 2 CITY OF SOUTHLAKE, TEXAS FY 2006-07 CAPITAL IMPROVEMENTS PLAN Street & Drainage Improvement Projects Report Date: June 30, 2007 Title: Location: Project Description: Roundabout construction White Chapel at Continental Reconstruct the intersection to improve traffic flow and drainage. The design will include a traffic analysis to determine the optimal intersection. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $350,000 $35,664 $314,336 Funding Source(s): Status: Strategic initiative fund transfer, Roadway Impact fund Engineering is currently underway. Expect to bid the project for all roundabouts in Fall 2007. This roundabout will be constructed first, estimated start date January 2008. Completion Date: April 2008 Title: Location: Proiect Description: Roundabout construction Dove at N. White Chapel Reconstruct the intersection to improve traffic flow and drainage. The design will include a traffic analysis to determine the optimal intersection. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $450,000 $31,022 $418,978 Funding Source(s): Status: Strategic Initiative Fund transfer, Roadway Impact fund Engineering is currently underway. Expect to bid the project for all roundabouts in Fall 2007. This roundabout will be constructed second, estimated start date April 2008. Completion Date: July 2008 Title: Location: Proiect Description: Roundabout construction Dove at N. Carroll Reconstruct the Dove St. and N. Carroll Ave intersection to improve traffic flow and drainage. The design will include a traffic analysis to determine the optimal intersection. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $350,000 $31,021 $318,979 Funding Source(s): Status: Strategic initiative fund transfer, Roadway Impact fund Engineering is currently underway. Expect to bid the project for all roundabouts in Fall 2007. This roundabout will be constructed last, estimated start date July 2008. Completion Date: October 2008 Page 3 CITY OF SOUTHLAKE, TEXAS FY 2006-07 CAPITAL IMPROVEMENTS PLAN Traffic Management Projects Report Date: June 30, 2007 Title: Location: Protect Description: Agreement with TXDOT for Jellico Court East and West Construction of intersection improvements with construction of deceleration Brock Dr., Meadowlark Ln., deceleration lanes along FM 1709 from Jellico Circle lanes at various locations Southridge Lakes Pkwy & West to Bank Street. along FM 1709. Waterford Dr., Ginger Ct., Stone Lakes PI., Timber Lake PI., Lake Crest Dr., Bicentennial Park, Diamond Blvd./Byron Nelson Pkwy., Foxborough Ln., Miron Dr., Westwood Dr., Commerce St., Bank St. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $500,000 $5,976 $494,024 Funding Source(s): Status: G.O. Bonds, G.O Bond Interest Working to obtain TXDOT approval of the design. Completion Date: September 2008 Title: Location: Proiect Description: Design of right turn deceleration Various locations on Southlake Professional services agreement with TranSystems lanes Blvd. Corporation. Services will include design, right-of-way surveying with digital aerial photogrammertry, preparation of construction plans and specifications, and preparation of construction documents. The project will also address drainage and culvert issues that are necessary to accommodate the widening. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $294,127 $126,622 $167,505 Funding Source(s): Status: G.O. Bonds, G.O Bond Interest Project just getting started Completion Date: September 2007 Page 4 CITY OF SOUTHLAKE, TEXAS FY 2006-07 CAPITAL IMPROVEMENTS PLAN Water System Improvement Projects Report Date: June 30, 2007 Title: Location: Project Description: 12" waterline Along E. Continental Blvd. from Replace existing 8" water main with approximately 1,200 Byron Nelson Pkwy. to LF of 12" water main. Tie in existing 8" at Wyndsor Champion's Way Creek, tie in existing 8" at Sarah Park Trail, and tie in existing 6" at W. Perry & E. Perry. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $276,650 $15,170 $261,480 Funding Source(s): Status: Tax & Revenue Certificates of Obligation Currently working on obtaining easements. Once (issued in 2006) easements are acquired the project will be bid (2-3 months out). Completion Date: Fall 2007 Title: Location: Proiect Description: Florence 1.5 MG elevated Brewer Dr. just south of Construction of a 1.5 million gallon water tower to replace water tank Florence Rd. the existing 0.5 million gallon tank on Florence Dr. The capacity of the existing tank is inadequate and has to be refilled many times per day, resulting in cost of pumping, electricity and shortage of supply to the customers. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $2,860,000 $2,288,451 $571,549 Funding Source(s): Status: Tax & Revenue Certificates of Obligation Construction almost completed. Completion Date: Summer 2007 Title: Location: Project Description: Repaint two elevated water tanks Bicentennial Park and at E. Dove Repainting of the interior and exterior of two elevated water Ave. and N. White Chapel Blvd. tanks. The repainting is in line with the expected life of the coatings applied during their original construction, Dove in 1986 and Bicentennial in 1988. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $793,600 $623,989 $169,611 Page 5 CITY OF SOUTHLAKE, TEXAS FY 2006-07 CAPITAL IMPROVEMENTS PLAN Water System Improvement Projects Report Date: June 30, 2007 Funding Source(s): Status: Tax & Revenue Certificates of Obligation Painting is in progress. Bicentennial Park tank is complete, working on E. Dove tank Completion Date: July 2007 Title: Location: Project Description: Repaint ground storage tanks Pearson East and West The Pearson East tank needs the interior of the tank painted. A routine inspection revealed that the interior was failing and needed repair. The exterior of the Pearson West tank has faded and needs to be repainted with a protective top coat to improve its aesthetics. Project includes plans, project administration, QA and testing. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $683,042 $422,357 $260,685 Funding Source(s): Status: Tax & Revenue Certificates of Obligation Project has been awarded and painting is in progress. Completion Date: Summer 2007 Title: Location: Proiect Description: 24" water supply line to TW King TW King Pump Station #2 Construct approximately 32,000 linear feet of 24" water Pump Station #2 transmission line in order to fully utilize pump station #2 and the ground storage tanks. Currently, this pump station is not connected to the Fort Worth supply line. It has to be back fed from pump station #1. This process is inefficient and reduces the City's ability to pump water throughout the system. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $3,676,000 $29,070 $3,646,930 Funding Source(s): Status: Tax & Revenue Certificates of Obligation Project is currently in preliminary design and engineering. Completion Date: Spring 2009 Page 6 CITY OF SOUTHLAKE, TEXAS FY 2006-07 CAPITAL IMPROVEMENTS PLAN Sewer System Improvement Projects Report Date: June 30, 2007 Title: Location: Proiect Description: Neighborhood sanitary sewer Quail Creek Estates, Woodland Install 8" sanitary sewer lines to convert neighborhoods installation, convert from septic Heights, and Shumaker Lane from septic to sewer. 7,000 LF in Quail Creek and Woodland Heights, 930 LF on Shumaker Lane from Hunter's Creek to Sunshine Ln. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $2,254,735 $50,275 $2,204,460 Funding Source(s): Status: Tax & Revenue Certificates of Obligation Design is complete. Project is in the process of being bid. (issued in 2006) Completion Date: Fall 2007 Title: Location: Project Description: N-1 sewer analysis and meter N-1 sewer line from Southlake and Sewer system capacity and structural integrity evaluation station improvements for TRA Westlake border to north of and miscellaneous meter station improvements necessary improvements Kirkwood Blvd. to satisfy TRA requirements for turnover of ownership and maintenance of the N-1 line north of the Southlake city limit. Completion of the turnover will shift Westlake billing responsibility to TRA. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $200,000 $35,425 $164,575 Funding Source(s): Status: Residual funds from other projects Professional services contract has been awarded to RJN Group, Inc. for the evaluation of the condition and capacity of the N-1 sewer line. Completion Date: Summer 2007 Page 7 CITY OF SOUTHLAKE, TEXAS FY 2006-07 CAPITAL IMPROVEMENTS PLAN Crime Control Fund Projects Report Date: June 30, 2007 Title: Location: Proiect Description: DPS East facility Central DPS facility to be located Design and construction of a centrally located DPS facility. at 667 N. Carroll Ave. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $7,490,000 $530,021 $6,959,979 Funding Source(s): Status: Contract for design services has been awarded to RPGA Crime Control sales tax Design Group. Contract for construction management services has been awarded to Lee Lewis Construction. Completion Date: October 2009 Title: Location: Project Description: Town Square video surveillance Town Square To strategically place fixed and moveable video cameras at Town Square and Grand Ave. Cameras will be monitored and recorded. Will help provide a sense of safety and security in Town Square, as well as provide a valuable tool in the prevention and investigation of crime. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $300,000 $0 $300,000 Funding Source(s): Status: Crime Control sales tax Contract out for bid and to be awarded in August 2007. Completion Date: Fall 2007 Page 8 CITY OF SOUTHLAKE, TEXAS FY 2006-07 CAPITAL IMPROVEMENTS PLAN Strategic Initiative Fund Projects Report Date: June 30, 2007 Title: Location: Project Description: Urban design study completion, NA Initiatives to enhance the quality of life or aesthetics for implementation and branding Southlake. Funding is to complete the Urban Design Study and related branding project, as well as initial implementation of the Urban Design Study recommendations. Projects may include medians, street trees, textures, portals, sidewalk treatments, traffic calming, sculptures, and placement of underground utilities. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $250,000 $87,587 $162,413 Funding Source(s): Status: Strategic Initiative Fund Contract has been awarded to Townscape, Inc. for completion of the Urban Design Study Completion Date., Spring 2008 Title: Location: Proiect Description: Munis software purchase and City wide Implementation of Phase II of the IT Alignment Study. This implementation includes the purchase of Finance, Utility Billing and Human Resource Management foundational software; the purchase of hardware for the software applications; data conversion associated with the software applications; RFP and selection assistance for the Public Operations Software; and purchase of CRIMES software and hardware for RMS/CAD operations. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $1,880,000 $738,152 $1,141,848 Funding Source(s): Status: Strategic Initiative Fund Software has been installed; in the process of set up as well as staff training on various parts of the software. Completion Date: Go live date on Finance software is October 1, 2007 Go live date on Utility Billing software is January 1, 2008 Go live date on Human Resource Management software is January 1, 2008 Page 9 CITY OF SOUTHLAKE, TEXAS FY 2006-07 CAPITAL IMPROVEMENTS PLAN Strategic Initiative Fund Projects Report Date: June 30, 2007 Title: Location: Proiect Description: Update Master Plan for Richards/Timarron property Update of the master plan for this city-owned property. The Richards/Timarron property effort will focus on the future of the Senior Center, the long-term potential of a recreation center, and possibly involve a look at the ultimate library. Updating the master plan will help determine the highest and best use of the property and provide a guide in making facility decisions Total Estimated Cost: LTD Actual Cost: Cost to Complete: $50,000 $11,808 $38,192 Funding Source(s): Status: Strategic Initiative Fund Update is in progress Completion Date: September 2007 Title: Location: Proiect Description: Fire Services ladder truck NA The ladder truck is required to provide adequate fire service to multi-level buildings located in Town Square and surrounding areas. This is an important element for promoting and ensuring safety in Southlake. Total Estimated Cost: LTD Actual Cost: Cost to Complete: $1,400,000 $486,176 $913,824 Funding Source(s): Status: Strategic Initiative Fund Truck is in the process of being built Completion Date: Page 10 i II 1 First Southwest Asset Mana ement Economic moo 9 C moo An Affiliate of First Southwest Company • Quarter 2007 H • 250 zoo -New Home Sales (Right Hand Scale) ~E-ting Home Sales (Left Hand Scale) a 0C 1500 150 7.50 1400 7 00 130D DD E E 50 1200 c 1100 DO y E w 50 DOD = 5.5D E 900 ~ ' D R 5 00 Z E c n o` T a > a 8DO 4.50 $ Y8, m g b .e 700 4.00 50C Non-farm Payrolls N° o& 7 o; m m V a a a Total Change in Thousands ~N$gvN ogo,~gmm'q- US Home Sales 2005, 2.5 million jobs were created and in 2006, another 2.2 Total in Millions million workers were added to payrolls. Clearly, the trend for new jobs is downward. However, the unemployment There was very little improvement in the housing market rate remained at 4.5% in May, near a five-year Iow.The low during the quarter. In May, existing home sales dropped unemployment rate indicates a much tighter labor market below the six million unit level for the first time in nearly which could result in higher-than-welcomed wage inflation. four years.The poor sales pushed the inventory of existing Right now, the labor market conditions support a neutral homes to 8.9 months - the highest level in 15 years. New monetary policy; however, deteriorating future employment home inventories were also bloated, with a lesser 7.1 month might provide reason to reconsider Fed rate cuts. supply at the end of May. Unfortunately, a recent run-up in borrowing costs will only compound the problem - for O the week ending June 29, FHLMC reported an average 30- • year conventional fixed-rate of 6.67%, the highest in almost a year. And problems in the sub-prime market, generally ssSD thought to be fairly well contained, emerged in the Collateralized Debt Obligations of two large Bear Stearns hedge funds in late June. Although Bear came to its own 53.25 rescue with a $3.2 billion dollar support loan, this massive problem only served to further devalue sub-prime loans as 53.00 well as credit standards.Thus, housing should continue to be a drag on the overall economy in the second half. $2 75 E I 111 1 $zsD m ~ m Mayjob creation exceeded expectations as non-farm payrolls increased by 157k, bringing the three month average to 137k. US DOE Retail Automotive GasolineTotal Investors were apparently pleased with the better-than- All Grades-Average Price expected job growth, but frankly, the 1.7 million annualized Record gasoline prices wrestled with ongoing housing pace so far in 2007 has been mediocre. By contrast, in woes for the top economic story of the quarter as the average price for a gallon of gasoline rose more than M $0.50 per gallon in April and May to a record high of $3.22. By the end of the June, gasoline prices had dropped back under $3 per gallon, but rising crude prices suggest that Although durable goods orders were weak in May, falling the decline is probably over. On June 29, crude futures hit 2.8% overall, the decline itself was the first in four months. $70 per barrel, the highest price in nearly 10 months. It's In the 17-year history of the volatile data series, orders never entirely clear how higher energy prices will affect for big ticket items intended to last for at least three interest rates. On one hand, higher energy prices reduce years had never risen for four straight months. Thus, discretionary income, which will ultimately slow the capital spending, as measured by durables, seems to economy even further, suggesting eventual Fed rate cuts. be in good shape. Likewise, factory managers indicated But on the other hand, persistently high energy prices that manufacturing conditions were solid as the national could funnel through to core inflation, a problem that the ISM factory index rose from 55 to 56 in May, reaching Fed would combat by raising rates. the highest level in 14 months. The regional surveys showed even more impressive growth, with the Chicago ' -nflation region index near a two-year high, the Philadelphia index expanding at the fastest pace in over two years and the New York index at it's highest level in a year.The relative ~-Overall CPl --Core CP1(Ex FoodEmrgy) health of the factory sector doesn't suggest the Fed will 4.5 raise or lower rates anytime soon. 40 3.5 Economic ,d 25 3.D 20 s.o 1.5 4.0 ~ ~ y n Z O a D ~ 1.0 Core CPI z.D Although core inflation has settled down in recent months, p headline inflation has followed energy prices higher. The core-PCE index has decelerated from a peak of 2.4% year- ~c over-year in February to a 1.9% rate in May.The Fed's comfort g zone for core PCE is generally thought to be in a range of o 0 1 to 2%. On the other hand, the overall PCE index, which Gross Domestic Product includes food and energy prices, accelerated from 2.2% to Quarterly Annualized Percentage Change 2.3% in May. Similarly, the overall consumer price index The U.S. economy stumbled during the first quarter. The jumped by 0.7% in May, boosting the annual consumer initial reading for Q1 GDP was +1.3%, a sharp deceleration inflation rate to 2.7%. Meanwhile, Core CPI rose by only from the prior quarter's 2.5% annualized rate. As expected, 0.1%, bringing year-over-year core CPI down to 2.2%, the housing played a major role as residential construction slowest rate in 14 months. All in all, inflation seems to fell by 17%, subtracting a full 1% from GDP. At this point, be under control, but the recent rise in energy prices, if home construction had fallen for six straight quarters, sustained, could potentially spill over into core prices. the longest negative streak in 25 years. Interestingly, the GDP reading was subsequently revised even lower to C+0.7%, the slowest growth rate since Q4 2002. However, because the revision was attributed mainly to lesser inventory accumulation, investors anticipated that the Retail sales were lackluster in April, rising by a mere 0.2% subsequent rebuilding of lean business inventories would but May was a completely different story. Advanced retail boost economic growth in the following periods and the sales rose by a whopping 1.4%, the largest increase in 16 extreme sluggishness would not persist. months and nearly double the median forecast. Vehicle sales haven't fared nearly as well. In fact, they've fallen for S the past six months with a 0.7% drop in May followed by a 3.5% plunge in June. Going forward, the prospects for a consumer spending boom in the coming months appear Both the DOW and the S&P 500 set new records during unlikely. Near record credit levels, increased borrowing the second quarter. The DOW rose 1,326 points from the costs and higher gas prices are not a recipe for brisk beginning of the quarter to a high of 13,680 on June 4th, spending. Tepid consumer spending suggests mediocre while the S&P rose 118 points during the same period to a economic growth at best. record high of 1,539. In theory, as the equities excel, less money flows into bonds, contributing to the bond market a a sell-off and related higher bond yields. Bond yields rose a tremendous amount during the 0. S&P quarter with the two- and 10-year Treasury-note yields DOW 500 NASDAQ rising by more than 50 basis points through mid-June 3/31/07 12,354 1,420 2,421 as investors priced out all possibility of rate cuts.This 6/30/07 13,409 1,503 2,603 represents a significant change in market psychology Change for Q2-2007 +8.5% +5.8% +75% from the prior quarter, although the yield adjustment seems to have less to do with strong economic data Change since 6/30/06 +20.2% +18.4% +19.9% than forecasters simply throwing in the towel on the possibility of easing. The market was finally listening F _ _ to Fed officials who have long insisted that the more likely change in monetary policy was further tightening. But higher yields are hardly the cure for a 1) May 9th - Rates left unchanged - 5.25% target sluggish economy. Fed officials warned yet again that "core inflation remains The housing market has already gone through a somewhat elevated" and as a result, the predominant painful adjustment period, and it appears that record policy concern continued to be that inflation would fail to inventory overhang combined with a slowdown in moderate as expected. sales will prevent meaningful recovery anytime soon. 2) June 29th - Rates left unchanged - 5.25% target Supply imbalances contributed to gasoline prices The official FOMC statement did not describe inflation as reaching an all-time high during the quarter, and a being elevated nor did it say that inflationary more recent rise in crude oil prices threaten to keep pressure seemed likely to moderate over time. Instead, committee pump prices on the high side for a while longer. Thus, high members acknowledged a modest improvement in core gas prices, bloated home inventories, inflation, but were unconvinced that the improvement tighter lending standards and higher mortgage rates was sustainable. Thus, the inflation bias was still in place, should temper economic growth for the time-being signaling that the Fed would raise rates if need be to keep and essentially counter-balance an apparent upswing inflation in check.The Fed has not made any clear indication in manufacturing. Inflation has been well contained in the past several months, but the Fed has yet to that they are even considering rate cuts. breathe easy. A period of moderate and sustained i growth will help. nterest Rates The most likely scenario for the remainder of 2007 is for steady monetary policy. Fed officials are still cautioning investors that their primary concern is Funds inflation and have made it clear again and again that ° 0 0 0 ° ° if price pressures increase, monetary tightening will Last 3/31/07 5.25/° 5.03/° 5.07/° 4.58/° 4.54/° 4.65/° follow. However, there is still much disagreement High 5.04% 5.04% 5.10% 5.10% 5.15% 5.30% among the heavyweights about the near-term direction of interest rates. In mid-June, Bill Gross, the Low 4.53% 4.53% 4.83% 4.59% 4.53% 4.62% manager of PIMCO, the world's largest bond fund, End 6/30/07 15.25%14.81%1 4.94% 4.87%14.89%15.03%1 said that the housing market was in such bad shape that the Fed might need to cut rates in the next six to nine months. Recently hired PIMCO advisor Alan Greenspan disagreed, claiming that interest rates, at the time, were too Iow.The JP Morgan Chase forecast for the end of 2007 seems to support Greenspan's assessment, calling for a 6.00% overnight funds rate by Q1 2008, while UBS believes the Fed will make two quarter point rate cuts before the end of the year. A Wall Street Journal survey of forecasters taken near quarter end reported 2.5% average GDP growth for the third quarter and 2.8% for the fourth. If the Fed's goal is to keep inflation at bay, this sub-par economic growth will be acceptable and will allow the FOMC to sit quietly on the sidelines ...where they have sat patiently for over a year now. Scott McIntyre, CFA Senior Portfolio Manager July 9, 2007 Alunoas Aue jo ase~omd aql joj uoilel!0110s e se papualw lou si 11 Aluo Sesodind uoaewjojui job papualW si Ieualeuj sigl uolloesueil Aue J] 95e5ua io A5aleas Aue 1Z)alej Jo ldope of uo s oap s,japeaj e Jo4 e suodsai oul 'luaw95euel,N lasso lsannglnos 1ST 8 si lou 'uoilewolu Pies 10 A3eJnCCe ayl aaluejen5lou sa0p oul 'luawa5euelN sassy lsannylnoS JSJI~ algegaa aq of anagaq air, leyl sa0mos wa1 pawelgo uaaq seu 1Jodej siyl w uopewolui ayl OOOb E96 VLZ OOOZ'L9V,ZL9 Z99E-LOZ9L sexal'SelleO LOL9L sexal'ullsnd 009 a1!nS OV6L a1!nS 1aaj1S Ined '1S g1JON 9Z0 19a4S 419 1SaM ODE • . • . • t moo Y` Ili, First Southwest Asset Management An Affiliate of First Southwest Company 325 North St. Paul Street Suite 800 Dallas, Texas 75201-3852