STATE OF TEXAS * CITY COUNCIL COUNTY OF HOOD

STATE OF TEXAS * CITY COUNCIL COUNTY OF HOOD * REGULAR MEETING CITY OF GRANBURY * SEPTEMBER 21, 2010 The City Council of the City of Granbury, Texas, convened on September 21, 2010, at 6:00 PM in the City Hall Council Chambers, 116 West Bridge Street, Granbury, Texas. Notice of said meeting giving date, place, and subject thereof having been posted as prescribed by Article 6252-17 V.A.T.V.S., with the following members present: Rickie Pratt * Mayor, Place 1 Tony Allen * Councilperson Place 2 Mitch Tyra * Councilperson, Place 3 Lisa Johnson * Councilperson, Place 4 Laurel Pirkle * Councilperson, Place 5 Mickey Parson * Mayor Pro Tem, Place 6 And Harold Sandel * City Manager Dee Arcos * City Secretary 6:00 PM Mayor Pratt called the REGULAR MEETING to order. Pastor Neil Norman with First United Methodist Church gave the invocation. Mayor Pratt read two proclamations. Constitution Week - Sept. 17 23, 2010 National Rehabilitation Awareness Celebration - Sept. 19-25, 2010 CONSENT AGENDA Minutes of the City Council meeting of September 7, 2010 were unanimously approved as presented. DELIBERATION AGENDA 10-126 Discussion and proposal by Mr. Gary Couch to consider expanding the parking area on City owned property addressed as Lot 1, Block 1, of the Granbury Beach Addition, and a portion of land at 400 E. Pearl Street, collectively comprising approximately 0.869 acres of land. Mayor Pratt commented this item had been on the last Council agenda and Mr. Couch had asked that it be moved to this meeting. Scott Sopchak, Assistant City Manager briefed Council. The City has an existing long-term lease (through 2032) arrangement with the current owner of the Lodge for the use of the pool and tennis courts, whereby the City receives approximately $300 per month. Approximately three years ago, the City repaved the area to the east of the Lodge where the tennis courts used to be, to accommodate approximately 44 parking spaces for beach goers. The site is zoned light commercial and is outside of the historic preservation overlay; therefore, the proposal to demolish the old pool house, in order for a new swimming pool to be built, would not require any application before the Historic Commission; however, light commercial zone does not allow expansion of multi-family. Mr. Couch wished to remodel the lobby area within The Lodge to construct approximately 10 guest suites. Staff has informed Gary Couch that he will be required to go through P & Z and City Council to rezone the property to allow for the expansion of the facility, were City Council to accept Mr. Couch s proposal for expansion of the additional units. Mr. Couch submitted to Staff and Council a revised plot plan which showed approximately 30 spaces proposed to be earmarked for the Lodge accommodations and the balance of the spaces would be used for beach goers or for City usage. The three electric transformers on the site would not be moved or relocated after all, so there would be no cost associated with this. Mr. Couch also submitted a proposed budget sheet, which included among other items, the cost of the parking, demolition of the club house, and filling in the pool, which total, was approximately $59,000, to be split between Mr. Couch and the City. Mr. Couch s proposal indicated the Lodge now has 19 parking spaces and would end up with 30; the City currently has 44 spaces and would end up with 100. Assistant City Manager Sopchak commented should the Council choose to go forward with Mr. Couch s proposal, some of the work could be accomplished with City employees to help defray cost. Mayor Pratt asked Mr. Couch if he was the current owner of the Lodge. Mr. Couch replied he was the contractor, who purchased the Lodge and the proposal would only be contingent upon closing the transaction. Mr. Couch commented he was coming to Council from the perspective that (1) He needed additional parking for the Lodge; and (2) He thought the City was in need of more beach parking. Considering the site, where the pool is now, was not one that he really cared for and would prefer a more private pool for the residents, so he was proposing to build a

new pool and he would like to do that first before demolition of the existing parking lot. He thought the benefit of the entire transaction, which would eliminate the existing hotel units, would enhance and Hilton, the Quinta and the new hotels in town. He thought having a joint parking lot would benefit both sides. Councilperson Johnson asked if the parking spaces designated for the Lodge parking be covered or someway designated they were specifically for the Lodge. Mr. Couch answered, yes, although he did not know at this point if it would be through signage or if his parking spaces would be covered. In the future he thought if a gate needed, could be installed to be accessed only by the Lodge residents. Mayor Pratt asked where this gate would go. Mr. Couch replied the gate could possibly go in the interior island at the corner of space one. Councilperson Trya commented he was concerned with how much City money was going to be invested in this project and questioned whether Mr. Couch, if the Council approved his proposal, would Mr. Couch then be coming back to Council to renegotiate the lease. Assistant City Manager Sopchak commented the City Attorney has indicated that if Mr. Couch does close on the property, then the City could renegotiate a new term lease regarding the long term parking. City Attorney Neal commented once a new lease is renegotiated, it would come back before the Council. Councilperson Tyra commented regarding the City parking spaces. Assistant Manager Sopchak commented there is actually signage out there on the City property showing that there is some allowance for the Lodge patrons to park there. Sopchak commented even though the lease agreement is silent on parking, there has always been that understood expectation that the Lodge was welcome to park there. City Attorney Neal commented Section 5.02 of the lease, did allow the Lodge owner, at his expense to construct parking on the leased premises, which would be the pool and the pool house there. Councilperson Tyra commented the developer s need for parking was much more than the City s need. He wanted to help the developer move forward; however, Councilperson Tyra wanted Council to do it in a way that was good for the public s money and not at the total expense of the public. Councilperson Tyra suggested Mr. Couch take on more spaces and pay himself for those spaces. Mayor Pratt asked regarding the number of parking spaces required of Mr. Couch. Assistant City Manager Sopchak commented based on the number of dwelling units, additional parking spaces are required by ordinance at a ratio of 2.5 spaces per dwelling unit or for 10 units, 25 additional spaces. Mr. Couch was now asking to earmark 30 spaces and the City could do that under a new renegotiated contract. Councilperson Tyra commented he would like for the expense of the parking spaces be split evenly for Mr. Couch to pay for half and the City to pay for the other half. City Attorney Neal suggested that if Council was of the opinion that they wanted to go forward with this project, that they make a motion to allow Staff to continue negotiating with Mr. Couch; with the understanding that any agreement that would come out of the negotiations, would come back to Council for review and approval. Councilperson Tyra moved that Council allow City Staff to negotiate with Gary Couch and come up with a solution on the parking lot situation and report back to the Council. Seconded by Councilperson Johnson, the motion carried with 5 ayes and 0 nays. MOTION CARREID 10-127 Consider and approve an Interlocal Cooperative Agreement for Economic Development between the City of Granbury and Hood County. Consider and approve an Agreement for Administration of Economic Development Programs between GHEDC, the Granbury-Hood County Economic Development Corporation, the City of Granbury and Hood County. Adopt a resolution of the City of Granbury and of Hood County providing for renewal of the said Agreement for Administration of Economic Development Programs with GHEDC. The Interlocal Cooperative Agreement for Economic Development between the City of Granbury and Hood County provides among other things as follows: The term of the Agreement is for one (1) year, being effective as of October 1, 2010, and ending on September 30, 2011. The Program Administrator shall be the EDC. Projects are individual uses of the Funds by the EDC or a portion thereof to provide incentives to businesses/employers that result in the public purpose of economic development, diversification, expansion and employment being served.

The Agreement for Administration of Economic Development Programs between GHEDC, the Granbury-Hood County Economic Development Corporation, the City of Granbury and Hood County provides among other things as follows: The term of the Agreement shall begin on October 1, 2010 and end on September 30, 2011. GHCEDC shall serve as the Program Administrator of the parties Economic Development Programs as described in Section III of the Interlocal Agreement. In consideration of the services to be provided by GHCEDC, the City and County shall pay to GHCEDC such sums as are required for approved projects. The amounts to be paid by City and County shall not exceed the amount that has been budgeted by each entity for the fiscal year. City Attorney Stuart Neal commented these two agreements are renewed on an annual basis and the only major change was in the Interlocal Cooperative Agreement for Economic Development. In the past, the funding had been set for $100,000 and now that language has been taken out of the agreement. The resolution provides for renewal of the Agreement for Administration of Economic Development Programs with GHEDC. Councilperson Pirkle made a motion that Council approve all three items: the Interlocal Agreement for Economic Development; Agreement for Administration of Economic Development Programs with GHEDC; and the resolution providing for renewal of the said Agreement for Administration of Economic Development Programs. Seconded by Councilperson Parson, the motion carried with 5 ayes and 0 nays. MOTION CARRIED 10-128 Consider and approve a resolution providing for nomination of two candidates to fill two director positions on the Hood Co. Appraisal District Board of Directors. Mayor Pratt commented Greg Stewart, Chief Appraiser indicated each taxing entity should submit names and addressed of candidates by written resolution to the Chief Appraiser before October 15, 2010. Mayor Pratt recommended this item be postponed until the next Council meeting in order for Council to have opportunity to entertain some nominees. Councilperson Tyra moved that this item be placed on the Council meeting agenda of October 5, 2010. Seconded by Councilperson Allen, the motion carried with 5 ayes and 0 nays. MOTION CARRIED 10-129 Consider and approve a unified rate policy for individuals, entities and organizations that utilize the Granbury Resort Conference Center. Charlie McIlvain, CVB Director briefed Council. The Granbury Resort Conference Center will complete its second full year of operation on October 8, 2010. An introductory rate structure was initially used to create awareness in the market place and generate business for the Conference Center. The introductory rate structure included a one-time per year use of the Conference Center at no charge to some non-profit organizations. Many other non-profit organizations were also ultimately granted permission to use the Center at no charge. Now that the Conference Center is established and demand for the Center has increased, the non-profit policy has become detrimental to booking the facility to organizations paying for the Center. Director McIlvain commented in the last 12 months, 34 events had been held at a loss of rental revenue of $60,650. This figure did not include cost of linens, tables, audio visual equipment, staged events rental, impact fees and sales tax. When non-profit organizations book the Center at no charge, local tax payers are picking up the cost for that organization s use of the facility. Staff conducted surveys of comparable facilities around the state to determine how and if they charge non-profit organizations for use of their facilities. Discounted rates ranged from a 30% discount to no discount at all, for non- profit organizational usage. Director McIlvain commented Staff was recommending the base rate charge with a 20% discount to all Granbury non-profit organizations if they booked their events Monday through Thursday. The base rate for Monday through Thursday use of the Conference Center would be $3,000. Individuals asking to book for non-profit organizations would be asked to provide proof of their own non-profit 501C3 status to receive the discount. They could not use another organization s status for the booking. Staff was recommending that for all one day events, any booking could be rescheduled 90-days prior to the date of the event, if Conference Center Staff had the opportunity to book the facility for a multi day convention. This was an industry standard, utilized by

many Convention and Conference Centers, across the state and nation. Staff recommended Council consider an updated rate structure, more compatible with current market conditions and Conference Center usage. Councilperson Johnson asked if there would be a discount on Fridays or Saturdays. Director McIlvain commented the weekend nights were their best revenue producing time, and so Staff was recommending the discount not apply on the weekend. Mayor Pratt commented he understood the current policy, in addition to providing free use of the Conference Center to non-profit organizations, often times the City also purchased tables for some of the events. So in addition to free use of the Center, the City also provided contributions, in the way of purchasing tables. He asked Director McIlvain if Staff also had to be there for the duration of these events; Director McIlvain replied yes. Mayor Pratt thought he felt there did need to be established some sort of balance, since the list of accepted non-profit organizations was a bit slighted. He thought it was time to let non-profits step up to the plate, because no event was free by any means and it would eliminate piggybacking, where some folks are utilizing someone else s 501 status. Director McIlvain commented any non-profits that are already booked through December 31, 2010 would be honored, if a contract has been signed and is already in place. If Council approved the new rate policy, it would be effective on October 1, 2010. Councilperson Allen asked if the additional revenue to be made from the new rate policy would be used for advertising. City Manager Sandel commented it would be put into the General Fund. Councilperson Allen asked if there was any way the additional revenue could be earmarked for promotion of the City and the Conference Center. Manager Sandel commented the budget would have to be amended. Councilperson Tyra commented he thought that specific additional revenue needed to be earmarked to promote the Historic Square. Mayor Pratt commented he thought Council needed to stick with the agenda item presently before them. Tom Kirkland, 613 Willow Springs, Rockwall, Texas commented he was the Developer and Managing Partner of the Hilton. Mr. Kirkland commented when he was first approached by the City, they were asked to develop a hotel for a City Conference Center. Mr. Kirkland commented the City had done a marketing potential study for the Center and they (Mr. Kirkland) had utilized a lot of the analysis and data in this City conference facility market study for the Conference Center. They, (Mr. Kirkland) also had had their own feasibility study done for their own Hilton Garden Inn Hotel. At that time, Hilton felt emphatically that Granbury was a Hampton Inn market; however, the market study the City had done for its Conference Center, indicated that with incremental room nights generated from the Center being booked as such, it would make up for that difference in the type of hotel it was. So Mr. Kirkland went about building and talking with the Hilton about it and got them to consent to build a Hilton Garden Inn. Mayor Pratt commented the agenda item being considered by Council was regarding a rate policy and asked if Mr. Kirkland was going to comment on this specific item. Mr. Kirkland commented he thought the City Conference Center was no longer being used as such, but was being used more as a Civic Center for one day events. He felt the Conference Center was not generating room nights and bed tax for the City. Mr. Kirkland commented he felt the City Conference Center had evolved into something totally different than what was represented to him, when they were building the Hilton. Had they known at any time the City Conference Center was not going to be run by a third party conference center management company, they never would have built the Hilton in Granbury. Hunter Goodwin, 1011 Lyceum Ct, College Station, Texas commented he was the President and CEO for the management company for the Hilton. He thought Council needed to consider how to bring people to this community to stay overnight and not so much what rates to charge for the non-profits. Tim Bubel, 204 Turner, Granbury, Texas commented he thought it was important to have a rate policy at the Conference Center. He commented there were many different 501C non-profit designations (example, 501 C3, 501 C6, etc.) and for this reason, asked that Council consider being specific with which of these non-profits would be eligible for the

rate discount and to specifically list these in the new policy. Mr. Bubel also asked that Council consider extending the 90 day policy. Director McIlvain clarified the discount would apply to all 501C s. Mayor Pratt commented he would entertain a motion to approve the policy with clarification that the discount would apply to any and every organization with a classification and proof from IRS of 501C non-profit status, in order to get the Conference Center at a discounted rate Monday through Thursday and at full rate any other time. Mayor commented he agreed with Mr. Bubel and recommended the 90 days policy be changed to 120 days. Councilperson Johnson was in agreement. Councilperson Tyra moved that Council approve the unified rate policy that was presented by Staff and with the clarification of the 501C classification and that the only change would be moving the 90 days policy to 120 days. Seconded by Councilperson Allen, the motion carried with 5 ayes and 0 nays. MOTION CARRIED Councilperson Tyra commented before Council went into executive session he wanted to make sure some items would get on the agenda for the next meeting and so he wanted to make a motion. Councilperson Tyra moved that Council at the next scheduled regular meeting, that Council place the City Manager s performance evaluation on there. Councilperson Allen commented he would second the motion if Councilperson Tyra would add two more things to it. He wanted to add Tom Kirkland to the agenda. Councilperson Tyra asked City Attorney Neal if it was appropriate to add two other things to his motion. City Attorney Neal commented Councilperson Tyra could amend his motion if he so desired or not. Councilperson Tyra commented he did not want the rest of the Council to not vote because they did not like one out of two. Councilperson Tyra repeated his motion as follows: He would move that at the next regular scheduled Council meeting that Council place on the agenda the City Manager s performance evaluation. Some of the Council commented this needed to be done in executive session. Councilperson Tyra commented in executive session would be up to the person being evaluated. Councilperson Allen seconded the motion. Mayor Pratt asked if this could be discussed. City Attorney Neal commented a motion and discussion to place an item on the next agenda could be done; however, Council could not discuss the substance of the item. (Note: the following is a transcript of the portion of the Council meeting following City Attorney Neal s comment. (Transcript) COUNCILPERSON JOHNSON: We generally have a review annually of the City Manager and it is appropriate that we have one annually, it is just we generally do not make this big a deal of it, it is just that generally by the City Manager at a certain time every year, so it is nothing out of the ordinary that we do an annual (Note: Mayor Pratt starts speaking; Councilperson Johnson s last couple of words is not audible.) MAYOR PRATT: It is actually not set by the City Manager, it is set in a contract for the month of April to be reviewed, and April is past. COUNCILPERSON TYRA: It is past; it was not done and so let us get it done this year like we are supposed to under the contract. COUNCILPERSON ALLEN: I call for the motion. MAYOR PRATT: Call for the question. COUNCILPERSON JOHNSON: And I was not quite finished with that, also it is up to the City Manager or the person being reviewed whether that be in open session or in executive session, so we need to ask the City Manager which he would prefer, because it is up to him. (Note: Councilperson Johnson s last few words are not audible.) MAYOR PRATT: Once again I would like to remind Council that this is an item that is written into a contract signed by the City Council agreed upon by the City Manager and it

states that it will be reviewed in the month of April. Call for the question. All in favor please say aye, all opposed say nay. MOTION CARRIED. Councilperson Allen made a motion to put on the agenda for the next meeting what Tom Kirkland was talking about the Conference Center. Mayor Pratt commented perhaps marketing might be more in line with what Councilperson Allen was referring to. Councilperson Allen replied yes, that way Council could talk about the extra income at the same time. Councilperson Tyra seconded the motion. Mayor Pratt commented he needed clarification as to what the motion was and asked Councilperson Allen to restate his motion. Councilperson Allen made a motion that Council talk about the funding, what the City is going to do with the extra money, that the City is going to get off of the Conference Center, and also he wanted Tom Kirkland to be present at the Council meeting to discuss any marketing that he might know about that could help the Council on this. Mayor Pratt commented he thought then the motion was to include an item referring to Conference Center marketing and funding and asked if that was what Councilperson Allen would like. Councilperson Allen answered yes. Councilperson Tyra seconded the motion. Motion carried with 5 ayes and 0 nays. MOTION CARRIED. 7:31 PM - EXECUTIVE SESSION Mayor announced Council would retire to meet in closed session pursuant to the Texas Open Meetings Act, Chapter 551 of the Texas Government Code, the City Council may convene in Executive Session to deliberate regarding the following matters: SECTION 551.071 Consultation with Attorney. The City Council may convene in executive session to consult with its attorney on any posted agenda item, when the City Council seeks the advice of its attorney about pending or contemplated litigation, a settlement offer, or on a matter in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the provisions of Chapter 551, including open meetings, open records and the following items: Contemplated litigation against Jay Mills Contracting, Inc. and Thomas Hoover Engineering, L.L.C. regarding the boat dock, fishing pier, and boardwalk project. Pending litigation associated with the Plaza Drive Condemnations and Street Extension Project. 8:10 PM - RECONVENE IN OPEN SESSION Take any action that may be necessary pursuant to items discussed in Executive Session. 10-130 Councilperson Johnson made a motion that Council authorize the filing of a lawsuit against Jay Mills Contracting, Inc., concerning the fishing pier construction project. Seconded by Councilperson Parson, the motion carried with 5 ayes and 0 nays. MOTION CARRIED 10-131 Councilperson Tyra moved that Council enter into a settlement agreement with Brown- Spro Investments, LLC associated with the Plaza Dr condemnations and Street Extension Project with an additional $25,000 expense. Seconded by Councilperson Allen, the motion carried with 5 ayes and 0 nays. MOTION CARRIED There being no further business, the meeting was adjourned at 8:15 PM. Attest: Dee Arcos, City Secretary Rickie Pratt, Mayor