Perfect.

Okay, Council, I will call our work session to order and turn it over to Jay Choppa.

Good afternoon.

And I'm glad we're inside versus outside.

It's pretty hot out there.

Uh today, uh, under upcoming and recent events, uh organizational changes.

I have one.

I'm gonna call on Sherry Knight, Assistant Library Director, to introduce our new public education specialists for the library department.

Thank you, uh Mayor Council and City Manager's office.

I am so pleased to introduce Lindsay Russian.

Uh Lindsay is our new um staff member at the library who is got a wide variety of responsibilities, but her um one of her main responsibilities is gonna be to launch and manage our new community art spaces.

And um I will just tell you a little bit about Lindsay.

She was born and raised in Oklahoma.

She moved to Texas after attending the University of Arkansas and Florida State University, where she studied flute performance and historical musicology.

For the past 16 years, she has worked in every department from marketing and fundraising to operations and production at Casa Mignana.

And since 2021, she has served as adjunct faculty for the arts leadership and entrepreneurship program at TCU.

And uh she has been here for almost one month, and in that time she has hit the ground running, and uh we are so lucky to have her as part of our team.

Did you want to say a few words?

I was just gonna say I look forward to working with you all in this different capacity.

Um as we bring uh art right into our communities and support our local artists.

So thank you.

Thank you.

Welcome.

Thank you.

Welcome.

Welcome, Lindsay, good to see you here.

Moving forward with informal reports.

The first is the 2026 debt financing plan overview.

Alex Loffer's here to answer any questions.

Questions for Alex.

Okay, next is development services inspection response times to inspect under permitted or unpermitted construction work.

Evan Roberts, assistant directors here to answer any questions.

Councilman Flores.

Hi.

I I've read the report, but I kind of wanted to give maybe some anecdotal type of feedback, uh, you know, given our our current staffing and the amount of work that's going on there.

When it comes to contracted work, uh, could you step me through and see, you know, again, the inter how the intervals of inspection times are working.

I know there have been a couple of things that have occurred before.

You know, I won't get into the details that certainly.

Maybe an inspection would have would have helped sooner rather than later.

Um yes, so uh addressing I guess the the question there's a couple questions in there or or some some nuances to that.

So in issues where and so work is going on without a permit.

We have historically recognizing, and I think we mentioned that there, historically we were really bad at that.

I'm gonna own that.

We were short staffed and getting the inspections done for projects that were were permitted were and and scheduled to try to keep the getting the economic base and things moving.

So we didn't do a really great job with our um complaint inspections.

So um in this instance where we have begun to once we were able to fill out the inspection team, after that we've been able to to give this the attention that it has has richly needed or deserved.

And so the team we're moving forward with that.

We're actually had a con uh training with the um seat attorney's office on Monday about how to write citations and build cases to move forward.

We've heard from the council that this is something that's important to move forward and and we're moving on that.

The as far as catching them, there are issues, and we've so there was a two-pronged approach that we took that.

I think the last time I was before you all I spoke about we're adding some some more teeth and some more um fines and and fees for when we find people that are skipping inspections and doing those other pieces.

So no, the not to speak to any one specific project, but yes, there have been some times where work was happening.

If we gotten out there, the sooner we can stop people, whether they genuinely the people that genuinely don't know, they're like, oh, this is my property, I thought I could just do whatever I wanted on it, right?

There's some of that.

When we can educate them earlier, it's better.

Um there are some bad actors who just do it until they get caught in them, and then they're like, oh fine, I'll go get the permit.

And in those instances, we we treat them, and we're trying to to do a little more um we'll say enforcement or more aggressively treat those and address them.

Okay.

And then just one party comment, I understand, and thank you.

Uh, when it comes to new contractors, uh contractors that are new to uh city work, uh, are they uh on the same type of interval of inspection, or because they're new, are they inspected more frequently until they're fully vetted and we think okay, this is a keeper, this is a contractor we can work with.

So not to to mix apples and oranges.

So our third party contractors do some follow-up inspections with them.

Our regular just anybody that just builds with us the required the the required inspections are the required inspections, right?

You you need to get a framing inspection.

Anything the the rule or the thing that I tell people when they come is before you cover anything up, let us look at it, right?

You you don't want to if there's gonna be wires or plumbing or whatever, if it's behind sheetrock.

If if you can't see it when you walk in the building, we need to look at it before you cover it.

And so those inspections happen on every project with every contractor and are we they are scheduled at the pace when the contractor is ready for them, they schedule them with us.

We don't set that cadence.

Correct.

Thank you, sir.

Customer Martinez.

So Evan, just really quick, can you just uh, you know, just go through the process again.

Somebody calls and reports uh construction that they suspect happening without a permit.

Um so they let's say they just call three one one or in the app.

Do you know if there's the option?

And I think it is because I I think I went in there and looked to report, you know, uh a project with us.

Yes, um, in the the the forward app is actually one of the best ways to do it.

When you go through the forward app, it automatically creates a permit record, a complaint record in our permitting system and automatically schedules the inspection for the next day.

We've had some trouble because it's scheduling inspections on Sundays when people aren't available to do them, but we pick them up on Monday and cover it.

So that's the best way.

And and on those, and that's the reports.

Then for the for this year, we are hitting those automatically scheduled inspections on the day they're done or within three days at a at a really high rate.

So development services would respond then, or would code then development, then code for enforcement.

So when you in the Fort Worth app, if you uh select the work without a permit, right, that automatically schedules to us.

Now there are some times where if it's unclear, right?

There are we sometimes people schedule work without a permit, and it's actually because they are close piled up next to the close, you know, the drop off stations, and and so then we partner with our our our code partners and say, with this one's yours, and when they get one that that comes to us and we we work them that way.

Are there certain case uh instances where development services is doing the enforcement and then others when code is doing the enforcement or is it all code?

Uh no, development services for construction work without a permit, that is development services.

Um there are other complaints and other things that would would come up, like I mentioned you're they're doing like the you know, the closed drop-off boxes and there's just clothes piled up around them.

That's a that's a code violation, or sometimes there's high grass, or any of the things that is are wholly the code compliance in their realm.

If we get those, we forward them to those and vice versa when they get the ones they formed us.

Well, let's say they um they're asked to go uh come to City Hall and secure a permit and they don't do that, then you would continue with that, or you would hand it off to code for no no no we've continued with that too.

So we actually again in in when we re-looked at this program.

One of the one of the holes we found earlier in the year was that it would get one.

Well, we go out there and we'd leave them a notice, and then no one would ever go back.

So we have since reprogrammed the permitting system to uh when you when we resulted as a notice of violation, it automatically schedules another inspection in 10 days, and then the notice of violation two schedules another 10 days, and then modal signal three is a zero days, and we start a more that's when we start writing citations and more rigorous enforcement after that.

Okay, thank you.

So, just I'll continue to recommend to submit through the my forward app.

That is all without a permit.

Thank you.

Okay, moving on.

Uh the next one is master Transportation Plan Update and Kelly Porter, uh assistant director and DPWs here to answer any questions.

Any questions for Kelly?

Yes, appreciate you, Kelly and the entire team.

Great work.

Next one's National Flood Insurance Program, repetitive loss area analysis update.

Jennifer Dyke, assistant directors here.

Council Rebecca.

Yeah, I just have a couple of questions for Jennifer.

Thank you so much.

Is that similar to the mapping that we did?

Um the high flood prone.

It's a little bit different.

So the rep loss areas are focused on insurance, actual insurance claims.

So they have to have flood insurance first, and they've made a claim to FEMA, and it's a rolling 10-year period.

They look at the amount of claims, and so potentially it could be an area where we don't even have any risk mapped.

So it could be either in FEMA or a non-FEMA or no flood risk mapped at all, but it's all based off of the FEMA information.

Okay, and then the th the FEMA, and I know the next IR is about the uh us updating the FEMA flood insurance, so um I might cross over a little bit here if you don't um that the FEMA flooding, the FEMA flood plain mapping impacts flood insurance.

Yes.

Now this um this repetitive loss area, are those um are those parcels or properties that are also within already within identified FEMA uh floodplains, or are those am I conflating?

So, so the rep loss areas can be anywhere.

So some of them are in FEMA areas and some of them and are in some of the non-FEMA city flood risk areas or potential high water areas.

So it doesn't matter.

The only the thing that triggers them to become rep loss areas is they have flood insurance and they've made a claim, and those claims total up to a certain amount within a 10-year period, and then it automatically says, okay, you're in a rep loss area.

So I don't know how FEMA takes that into consideration in terms of there's been so many changes in the flood insurance program over the last several years that sometimes it's a black box and we don't know exactly, we're not the insurance people.

Um, but but we use that information to help us understand what those flood risks are and to help us communicate with those residents and take them into account when we look at our maintenance and our capital projects.

Okay, um, a couple more questions and then I'll let you go.

So these um repetitive loss areas, they could be individual properties, um, or they could be a a cluster of properties, correct?

So typically it's it starts with one, and then they they look at that property and they look at the area around that property to kind of see are there structures kind of with that same type of risk, and then they group those together as a rep loss area.

Um so we're not just looking at that one structure, but we're trying to see oh, does the neighbor have that same type of risk?

Is there something that could help all of these together versus just one property?

Okay, um, thank you.

That's all really helpful because I know um having experienced um us notifying residents of of flooding or of be you know being in particular areas, um, I know what the phone calls to our offices are gonna be, so thank you for all that information.

And so then that's my segue.

Um, you know, we kind of learned through error last time when we first started sending out the notices about the flood prone areas, correct?

Um and we corrected course and went out to neighborhoods and really educated people on what this was and and what it wasn't.

Are there any plans to do that associated with the notifications um relating to these areas?

So these areas to my understanding, the communications went out like I guess a couple years ago when we started this process, and so really kind of we're updating, we're adding two new areas because of recent flood insurance claims.

So it would be pretty small.

Um, so I'm not exactly sure how we would be communicating with those few property owners.

Our floodplain management um leader is at a conference this week to learn more about FEMA.

Um so I can follow up with her and find out specifically how they plan to communicate, but it would just be a few, like a handful of people.

Okay, and if you just um if if you can to the extent that you can just identify maybe what council district they're in and just letting our offices know you don't necessarily need to give us the exact address, but when we get the phone calls, they're gonna yeah, definitely we can do that.

And just so y'all know, this is pretty confidential, the FEMA flood insurance claim information.

We cannot share that out.

Um, and so it's they don't even let me have it.

Our floodplain administrator keeps it pretty wrapped up, but we'll specifically let you know kind of like general areas so then y'all can be prepared if we get calls.

Don't leave.

I know, excellent.

The upcoming FEMA floodplain mapping updates and Jennifer's questions for Jennifer.

For Hill?

Sorry, Jennifer, do you mind just doing a general overview for me?

Yes, yes.

So the the FEMA one is so our program um works closely with FEMA.

We want to make sure that the FEMA maps are accurate.

Um, the FEMA maps are used for flood federal flood insurance purposes, but at the city we use them to help regulate development and communicate flood risk and then plan for our maintenance and our capital projects.

So we have a contract right now that we need to add some scope to, and so this is there's an MNC coming up in a few weeks, because we got some comments from FEMA that we need to address.

So, in short, um we recently um updated or in the process of updating three different areas um in the city, the FEMA floodplain maps.

Um but this is not just like a one-time thing.

We go through the city and we have a prioritized way to look at the FEMA floodplain maps, look at how current they are and where those biggest changes are in risk, because people look at those FEMA floodplain maps, and that's really the first mapping that they look at to understand what their risk is.

So we want to try to keep them as current as possible so people are getting an accurate understanding of the risk.

So we work with FEMA to update the maps officially.

These are all FEMA maps, and so it's the lines just change.

Sometimes people are taken out of the FEMA floodplain area, sometimes they're added.

Um, and then through that process, we're making sure that we're notifying the people.

Um, so depending on the amount of change, kind of drives the type of communication.

So we recently had a meeting uh for with the Eastland Creek community that we went out and met in their neighborhood because it was gonna have a pretty significant impact on the number of residents.

So we wanted to go out there and meet with them.

Um, other times we just use mailers or social media, depending on the amount of impact.

Um, but this is really what the IR is about is just kind of the an update on our current process for these three areas and where we're at and updating the FEMA floodplain maps.

Are there questions for Jennifer?

Thank you.

Jennifer.

Next is a neighborhood Wi-Fi program achievements and completion update.

Kevin Gunn from IIT is here to answer any questions.

No questions.

Opportunity zone 2.0 nominations and program update.

Jessica Rogers, economic developments here, answering questions.

Council Member Martinez.

Hi, Jessica.

Hi, so I see uh well, can we get an overview?

But I see that um, you know, there are significantly less opportunity zones than there are and that are gonna be proposed.

And I really want to get an idea of you know, types of projects that um have benefited from these opportunity zones, so that when the time comes to um help, you know, promote or or you know, answer any questions that interested parties might have, we can speak to that.

Sure.

So opportunity zones is a federal program that encourages investment in low-income high-poverty areas.

Um this iteration of the program is called opportunity zone 2.0.

So it's sort of lessons learned from opportunity zone 1.0 and then reapplied.

Um, one of the challenges kind of to get directly to your question of places that have benefited from this.

One of the challenges in 1.0 was there weren't any reporting requirements.

So we know a lot of general information about the program statewide, but we don't have a lot of specifics on local use of the programs.

I absolutely have some examples that um were made public in Dallas and Houston and San Antonio.

I don't have a specific example where a project in Fort Worth was used.

We only have six designated zones from 1.0.

So we are submitting, I believe the list you guys have says 45.

The final list will that we were gonna propose is actually gonna be 42, and that is because at least one of us got a little cross-eyed looking at all of those census track numbers, and two of those were duplicates.

One has now been deemed ineligible.

They were actually very low on the priority.

The one that was ineligible was actually our lowest on the priority list at this point, anyway.

Um, but with that, the program that changed, um, one key thing that changed and why there are fewer zones that are eligible or fewer tracks that are eligible is their requirement is now higher.

So now they have to be at 70% of area media income instead of 80%.

So that dropped our number of eligible tracks from over 100 to only 87.

Staff then went through those 87 tracks and looked at where we had areas that we thought projects that qualify could happen.

And were those projects areas consistent with the comprehensive plan, things like our strategic development areas, industrial growth centers, revitalization target areas, transit-oriented development, working collaboratively with neighborhood services and planning to kind of identify those.

And that's how we came up with the final list.

And I hope if if there's any more kind of specifics, I'm happy to answer those.

Just an example from Dallas at least.

Okay.

Yeah, let me so one of the projects that I pulled from Douglas.

So one that I found was called the Archive Multifamily Project, which was created near downtown Dallas.

And they were a the developer was able to use an opportunity zone to redevelop underutilized land and 300 housing units.

The largest proportion of investment through opportunity zones has actually been in housing, and that includes multifamily housing, single-family rental housing, and affordable housing projects.

So if you kind of look at the distribution of where opportunity investments have gone, it's been primarily in housing.

Secondary to that is commercial business development.

Are much much smaller, very low percentage of the actual use of the opportunity zone program.

But that's just one example of the type of project that that is possible using this tool.

Thank you.

Any other questions for Jess?

Yes.

I just have one statement, Mayor.

Go ahead.

Yeah, just thank you for this, Mayor, and thanks for working on ensuring Ridgemar Mall is on that list.

It's prime commercial redevelopment right there, but obviously hindered by the APZ at the base.

So appreciate us putting that on that list too.

Either comments or questions from council?

Thank you, Jessica.

All right, next overview of the request for proposals processed for FMS billing services and filling Rousseau, financed uh finance.

Councilman Flores.

We have some follow-up questions, but let me start off with this.

I know that there was a process to evaluate some proposals, and uh, the purpose being to increase the amount of uh revenue collections that we have with our EMS service.

So is there a specific target or metric that we're trying to hit that you could tell us about when we're evaluating companies like this?

So typically we um receive we collect about 27, anywhere between 27 and 30% of the charges that we have in um in this case for EMSMC, they're they actually reduced their their charge.

So we're expecting a savings of about approximately $370,000.

So they're reducing the charges that we would get assessed for the collections.

Right.

They're right.

Normally, right, they're reducing the the rate that they would receive.

Typically, what are their collection uh what collections do they realize, say in the market like ours?

So um it's several million dollars, but essentially it's two point um percentages is what I'm talking about, not so much uh dollar amounts.

So so they'll it's it's an average of 2.4 percent, I believe.

And then um they also have a what they call a safety net uh thing that the city currently doesn't utilize with them, and so they go up to a they actually go up to a third party service in almost like a collection agency where they try to follow up and collect and they collect money, and that's a higher percentage that's approximately 14 percent however we don't the city doesn't pay anything more on that we just pay exactly what what they're paying that occurs after the initial attempt to collect a follow up attempt is where this third party agency kicks in yeah after the the third third attempt to collect thank you next is uh rainwater charitable foundation expanding literacy access grant and Monique Hills Barks and rec is here to answer any questions yes Councilmember Hill Monique maybe it just helps to go over the IR thank you.

I didn't have a question I really just had a statement I did want to publicly thank Jeremy Smith and the Rainwater Charitable Trust for um investing in literacy and investing with the city of Walmart so we appreciate you.

Good afternoon council excuse me mayor and city manager charpa yes we are extremely excited um to receive and you'll hear from me two more times about this grant um but we are extremely um excited I'm not sure if we have anyone here with us from right one they're not um to receive a grant that is over three hundred and thirty eight thousand dollars that will help us with the expansion of our literacy program and so we will do on the 23rd a full presentation to you about this program and so uh thankfully the mayor uh has uh connected us with rainwater to expand a program that started back in 2018 and it was a vision for us to have a literacy program which was really to look at the prevention of summer slide um at our community centers during the summer um and so in order to do that we hire what's called a literacy support specialist and those are usually certified teachers that come in they work with us and so they are um their salaries a little bit more because we want to have the best working with our uh children what this grant will allow us to do is to not only hire those positions but they also will expand the amount of time that they're able to spend with our children um so we're really excited about that in addition to that um it helps us to dovetail into our program to look at screening for dyslexia and that is with our partner with the Sid Richardson uh foundation I'm not sure if they're here today or not um and so uh with that we'll be able to use these positions to help us with coordinating uh the services to make sure that our kids we're addressing literacy head on um along with some of our other program in the Mayor's reading challenge and the library were there specific questions to do that's all I wanted thank you your staff's done an amazing job we appreciate all your partnership and for literacy united and Caroline and their team and of course Rainwater as well to bring this to the table absolutely right we're really excited thank you thanks Monique next we have the review of City DSHS contractor model for mobile food vendor inspections and Wendy Turpin from Environmental Services is here to answer any questions.

Councilman Martinez, okay so I see we're not going to go into contract with uh the state um so we get a lot of um complaints from constituents about um food trucks on the you know on the right of way or um on properties that that aren't operating um so what should we do when um they come to us should we still uh direct them to 311 so that it could it could be like a land use issue and then um that department would then you know forward them to the county or how would that work?

If you have mobile vendor complaints, you're more than welcome to have the 311 have all of your residents call 311.

They will talk to the resident, and more than likely it'll end up in our house here in environmental Services Consumer health, and we'll address it either because it's a zoning violation through our commercial compliance, or if we investigate it and find that it needs to go to Tarrant County Public Health, we'll send that over for them.

And so when they report this through the mobile app, is there a specific um option there for this request, or just is it in general environmental?

There is not a specific option for that.

I can absolutely talk about adding that.

It would actually be really easy.

I know there's another or there was, but okay.

I just wanted to uh you know guide our constituents in the most efficient route.

Thank you.

Thank you.

Anybody else?

No.

Okay.

Next selection process for construction contractors and engineering professional services for the city capital projects.

And Lauren is out six, but Patricia Watsak, TPW assistant director is here to answer any questions.

Oh, I think this maybe was mild.

Can I get overview?

Good afternoon.

Um, the purpose of this informal report was to talk about how we select different types of projects, both our construction projects and our consultant or professional engineering services contracts for the city.

And we do um the vast majority of our construction contracts are procured through the low bid process, which is outlined in this report, and then by law for consulting services, we have to do a qualifications-based selection.

So it outlines the qualifications based selection process also in this report for selecting engineering services.

No.

Thank you.

Thank you.

Okay, and the last IR is the update on project safe neighborhoods, expanded areas, and Mark Varden.

Arthur is here.

Uh, Deputy Chief, police department.

Any questions?

No?

Okay.

Council, that's the last of our IRs.

We'll move to any changes to memberships and boards commissions or significant zoning cases or changes on their questions on the MNC log.

If not, we'll move into our first presentation.

Will Rogers Memorial Center Management Transition and Jess McEkern is presenting.

All right.

Mayor and Council, I am extremely excited about this presentation today.

This is something that has been in the works for many years here in this city, and we are finally to the point where we are ready to move it forward for approval.

And that is really talking about the future management and operation of our historic facility, the Will Rogers Memorial Center.

So this facility has been under city management since 1936.

We are coming up on the 100-year anniversary in just 10 short years.

And within the Culture and Tourism Fund, which is where this facility sits, if you will, there have been growing pressures and significant capital investment needs for this facility as well as the Fort Worth Convention Center.

So starting many years ago, the city started looking at how should we approach the future of Will Rogers?

And we've been considering a management transition or a new approach, if you will, since 2019.

There have been a number of factors that I'll talk through in just a moment that have caused this lag to where we are just now finally getting here in 2026.

And so I'm here today really to present the solution to you, which is to outsource the management and day-to-day operations of this facility to Gindy Street Management Corporation, which is a nonprofit composed of partners at the Fort Worth Stock Show and Rodeo and Trail Drive Management Corporation Dickies Arena.

Okay.

This image right here is the map of the Will Rogers Memorial Center.

You are all extremely familiar with it, but just to reiterate, this facility sits on 120 acres, has more than 17 buildings, and is very much an equestrian focused facility.

That said, though, this facility is rented often and by a number of different entities.

So we have everything here from horse shows and rodeotype events to Black Tigelas.

This facility is so unique in that it is up and running nearly 365 days a year.

To say it is busy is an understatement.

And to set the stage again of how we got here, I do want to walk you through a little bit of a history on this facility, and I won't take too long, but again, just starting all the way 90 years ago in 1936 when this facility was first opened and constructed.

Not quite 10 years later, in 1944, the Fort Worth Stock Show and Rodeo began operating at Will Rogers Memorial Center.

In 1987, the stock show assisted in raising funds to build a parking garage out of the facility.

And this was really the start of a lot more partnership, not just hosting events at Will Rogers.

It's not up on the screen, but I'll note 1988 was the year that I first went to the stock show in rodeo with my parents, and I've been to nearly every stock show yearly since then, and I've learned a lot about cattle at these at the Fort Worth Stock Show.

In 2001, Event Facilities of Fort Worth was incorporated.

It is a support arm of the Fort Worth Stock Show in Rodeo.

And then in 2003, the Fort Stock Show and Rodeo or EFFW through their arm was instrumental in helping the city launch the Project Financing Zone, which was a key financing piece to the construction of Dickies Arena.

Also in 2003, our nonprofit organizations partnered with us to build the promenade and the multipurpose pavilion as well as renovate barn in the milking parlor.

And they committed to paying half of the debt towards those facilities.

So that was a really big financial contribution.

In 2015, the city approved the master agreement for the development of the multipurpose arena.

That is the formal name for Dickies Arena.

And our nonprofit organizations agreed to pay one half of the cost of the construction of Dickies Arena, which was up to 450 million dollars.

In 2016, as we continue to move forward with the construction of Dickies Arena or the Multipurpose Arena, we formalized or the nonprofit formalized the creation of multipurpose arena Fort Worth, which is commonly known as Trail Drive Management Corporation.

For the sake of this presentation, you will more hear me refer to them as Trail Drive.

In 2018, Trail Drive in the City entered into a qualified management agreement for Trail Drive to manage all of our parking assets out at the Will Rogers Complex.

We pay a very minimal fee for that service.

In 2019, EFFW and the Stock Show split the cost with the city on the barn renovations, which were a wonderful improvement to the historic facility.

And so late 2018, early 2019, we had a leadership change within the public events department.

You had visit Fort Worth really ramping up in the tourism space.

So the city hired an entity, Hyden Strategic Partners, and assigned them with the task of creating a governance study for both Will Rogers Memorial Center and the Fort Worth Convention Center.

The outcome of that study came in late 2019, very early 2020, and the recommendation was ultimately to outsource both facilities eventually to third party management.

The intent at the time was that the convention center would go first and Will Rogers would go second.

But in 2020, we all know that COVID-19 pandemic happened and really derailed a lot of our plans at that time and threw us into a tailspin.

I will also note that in 2020, we hired Mike Crum as our public events director, and we hired him specifically for his expertise in transitioning facilities from city operations to third party management.

And that was part of the recruitment that they did for his position.

So, COVID pandemic hits all of our plans to move these facilities into third party management were just put on pause.

Instead, our public events department shifted their focus really to sheltering people during that COVID-19 early early ages of the pandemic.

And then after that, our focus really was on the recovery.

So how do we get our convention center and Will Rogers back to normal operations?

How do we get events booked and up and running again?

In early 2023, is when we finally picked back up the discussions about outsourcing the management of the Will Rogers facility.

And so we started naturally having conversations with event facilities at Fort Worth, again, an arm of the Fort War Stock Show and Rodeo.

And we talked to them at the time about two different aspects.

Number one, how do we engage them to help manage our capital projects?

Because they have always been very instrumental in working with us on our capital projects.

But number two, let's explore the conversation about venue management.

And so the two IRs that are noted there, they're just for reference if anybody's interested in looking at those.

Those were IR updates that were provided to council at the time on those conversations that were happening.

In 2024, very early, the council approved the management agreement with EFFW to manage our capital projects.

And we again continued at a staff level working on the venue management negotiations.

In 2025, as we were getting closer to wrapping up our negotiation or negotiations and just all of the aspects that that entails, we notified our staff early that year that we were still in progress and we were expecting to wrap it up soon.

And then the fiscal year 26 budget, the one that council adopted included completion of assignment incentive pay for our employees.

And the purpose of that, and we communicated that with employees is we really wanted people to stay through the transition.

We didn't want any of our staff to get cold feet or feel uneasy about what was to come, and so we created the incentive and then ensuring that we're letting them know that they will be taken care of and they are still an integral part of this facility.

So here we are today.

We have concluded our negotiations with our third party for the operation of this facility, and the MNC will be on your council agenda next week for approval.

If you approve that, the real work or the very nitty-gritty work starts immediately, and the third party management agreement will then go into effect on October 1 of this year with the start of the next fiscal year.

So, why did Hyndon Strategic Partners recommend third party management in the first place for this facility?

Well, three things really.

Number one, we were experiencing rising operating costs, especially coming out of the COVID pandemic.

You've seen this a lot across the city and all of our departments.

We're really being hit with rising post-pandemic inflation.

On top of that, our city processes, many of which are really rooted in state law, especially procurement, how we buy goods and services, how we contract for work.

They just add an extra layer of cost to them sometimes.

They add a lot of intricacies and delays and long timelines to get things done.

On top of that, the facility is 90 years old.

We have the 100-year anniversary coming up in just 10 years, and so there's a long list of capital needs that are needed to improve this facility and to keep it up and running for the next 100 years.

On top of that, this facility shares the culture and tourism fund resources along with the Fort Worth Convention Center.

You all know because we've seen a lot of presentations on it, that we are about to issue the debt to do phase two of the expansion of the convention center.

And so that really taps a lot of the financial capacity of the Culture and Tourism Fund, not leaving a ton of capacity available immediately for the reinvestment into capital improvements at Will Rogers Memorial Center.

So the ultimate solution or recommendation is that we should look to reduce our operating deficit, the cost to operate the facility, and then use any of those savings or any of the financial improvements through the reduction of expenses through potential increased revenue and take every bit of that and reinvest it directly into the facility in capital improvements.

So again, all the the entire purpose of this qualified management agreement is to free up money to reinvest into the capital at Will Rogers.

On this slide, you've seen this before several times before, specifically when we talk about budget, but this is just a snapshot at the increasing deficit.

Again, that deficit being that it costs a lot more to operate the facility than the revenue we're taking in.

I've listed on the right here just some of the main drivers that are leading that deficit to continue to increase.

So number one, reduce revenues.

This is not something to be alarmed by, it's as we have renovated some of the facilities there, like the barns at first, then the Coliseum most recently, those particular buildings come offline and are not available for rentals.

So we just naturally have reduced income coming in during those renovations.

On top of that, again, I mentioned already the post pandemic inflation, just everything is costing more.

We're also being very intentional about increasing our janitorial and our maintenance expenses into the facility, again, with the ultimate goal of improving our customer score.

That was something that in 2019 we were hearing a lot of is just dissatisfaction with the state of the facility and how it appeared and the cleanliness.

And then, of course, the Coliseum renovation expenses as well are contributing to that deficit.

So we get to the need for contract management.

And as we were working with our city attorney's office and our finance department to determine what is the most appropriate way to move this forward, there really is no other question other than a qualified management agreement.

Because this facility has tax exempt debt on it, and we anticipate issuing more tax exempt debt in the future for capital improvements.

This has to be structured as a qualified management agreement in order to preserve that tax exempt bond status.

And then just in general, again, the private sector is oftentimes a lot more efficient and entrepreneurial in the way that they can operate facilities.

And so we've seen that here in the city of Fort Worth already.

We have some great success stories.

Those are pictured here, but really the top left in that picture that I'll give as an example is the Fort Worth Zoo.

We have outsourced that facility to the Fort Worth Zoological Association since 1990.

And to date, the zoological association has raised more than 109 million dollars in private funding that has allowed for some pretty spectacular improvements there, such as Texas Wild, the Museum of Living Art, the World of Primates, the African Savannah, and Elephant Springs.

And I think you all remember this because you see the stats and the awards that go to the Fort Worth Zoo frequently, but right now our Fort Worth Zoo is ranked number one in USA Today for zoos in North America.

I guarantee that would not have been possible if not for the outsourcing the partnership with the zoo.

On the top right picture, that is our Cowtown Coliseum in the historic stockyards.

We have outsourced that facility since 2002.

We are on our second operator, and we've seen incredible improvements at the Caltown Coliseum.

Right now, I don't have the exact numbers off the top of my head, but we have taken that facility from costing the city money every year to a true revenue generator.

So we're seeing an excess of one million in profit.

That's a revenue of profit sharing that's coming off of that one.

That is also a historic equestrian facility, and just the success is a great example of what we expect to happen at Will Rogers.

The bottom left picture is the Fort Worth Herd, which we outsourced to visit Fort Worth starting in 2010.

Visit Fort Worth, works hand in hand with Friends of the Herd.

So Friends of the Herd does a lot of fundraising and then visit Fort Worth, leverages their expertise in tourism as well as destination storytelling.

And they have helped to turn the Fort Worth herd from a local tradition to really a national cultural landmark.

Just this year alone, I heard that they have had 12 requests to come film the Fort Worth Herd in action, and many of those requests are coming from international locations.

And then lastly, the Botanic Garden was our most recent example of outsourcing to private management.

We outsourced that facility in 2020 to the Botanical Research Institute of Texas.

And to date, they have raised more than 21 million dollars in funding.

A big part of that is contributing to the construction of the Baker Martin Family Garden, which is set to open this year.

But some other notable examples of their success in taking over that facility is that since 2020, the attendance has more than doubled at the Botanic Garden, which leads to increased revenue.

And as a whole, they've been able to take the city offset or the city deficit that we still fund for that facility as well and reduce it as an overall percentage of the revenue that is funding the operation of the Botanic Garden.

So as staff, again, as we were thinking about who is the best entity to take over the management and operation of this facility, who will care for it as much as we have and who will really elevate it into the future.

And the ultimate recommendation is Gendi Street Management Corporation, which is a nonprofit joint venture comprised of the Forest Stock Show and Rodeo, event facilities of Fort Worth, the partnership arm of Stock Show, and Multipurpose Arena for Orth, again, Trail Drive Management Corporation that operates Dickies Arena.

And the reason we chose them is again because of their long significant contributions to this facility already.

Chapter 252 of the local government code allows for an exemption to competitive bidding for the management of facilities to either professionals or to nonprofit organizations that have had significant financial and otherwise contributions to the facility.

I think it is very clear that Fort Worth Stock Show and Rodeo, Trail Drive Management Corporation absolutely meet that criteria of significant investment into the facility.

Trail drive management continues to operate Dickie's Arena, and they do that at no net cost to this city.

And then, of course, they also manage our parking assets that are part of the Will Rogers complex.

Both of these entities have a vested interest in preserving the future of the Will Rogers Memorial Center.

And I've shared this already, but again, Will Rogers is such a unique facility.

It's really not like any other convention center where anybody could come and operate it.

It is heavily equestrian focused.

It is rented 364 days a year.

You need somebody here that really understands the unique nature of move in and move out of equestrian events while also at the ability to hold concerts.

We have a great concert hall there, a small um theater, and somebody even that can host formal Black Tigelas.

Okay, at this time, although these two gentlemen really need no formal introduction to you, I am going to introduce Matt Carter, who's the president of Fort Worth Stock Show and Rodeo, and Matt Holman, President and General Manager of Trail Drive.

They're gonna walk you through a little bit more about their organizations and the contributions to the facility.

And then when they're done, I'm gonna come back up and give you a high-level overview of the management agreement that you will see on your agenda next week.

First and foremost, thank you, Mayor.

Thank you, Council, thank you, City Manager's office, uh, for having us here today.

Uh I'd also like to thank the staff that we've been able to work with, specifically Jess.

Thank you very much.

Uh Mike Crumb's been great to work with uh alongside Keith Chisholm, uh Alison McNamara and uh uh Taylor Parrish.

They've they've all got us to a wonderful point here.

Uh a lot of what you're gonna hear me say, uh Jess is probably covered, so uh we'll we'll try to be brief, but but both Matt and I felt like it was important that you hear about hear from the heads of the organization uh that that hopefully we'll uh form a partnership with with the city on, and we truly do believe that this is another iteration of a public-private partnership.

Uh most of our partnerships up to this point has have been really surrounding or the or the formal ones have really been surrounding uh facilities and improvements, but uh, but we really believe that this helps take it to the next level.

Um again, just covered a lot of this, but uh uh the the principles in this joint venture, if you will, Fort Worth Stock Show and Rodeo Event Facilities and Trail Drive Management, uh, all three are 501c3s.

Uh we've obviously at Fort Worth Stock Show and Rodeo been a tenant of both Will Rogers and Dicky's Arena, I think for 83 years now.

So I think what that really underscores is that we have institutional knowledge, uh we know the facility, we've been there.

Uh, we've already worked alongside the Will Rogers employees, which I think is really important.

Uh, we'll talk about that a little bit later.

Uh and then uh, you know, our surplus operating revenue uh at the end of the day goes to two things.

One improving the facilities.

Again, we'll touch on a few more of those uh specifics here in a moment, uh, but also to supporting you know Texas kids.

Uh last year we were able to funnel about 12 million dollars into the pockets of Texas kids uh to help them with their next steps.

Uh, in addition to that, we're we're a proud sponsor of our local community.

We support things, uh Cook Children's Carity Foundation, uh, you know, members of our local chambers and visit Fort Worth and all of the things that are important around here, uh support a lot of local festivals.

Uh, the facilities Fort Worth uh as just mentioned was formed really initially with the specific purpose uh to uh you know hold land in uh expectation for Dicky's Arena and did that for many years and then later became the development partner uh for Dickey's Arena, and I think uh that's also important.

And then uh since that time that that organization, that funding mechanism has been used to help partner with the city of Fort Worth.

Uh Matt's gonna probably talk a little bit more about Trail Drive Management Corp here in just a little bit when we get to those slides, but I'll I'll move forward.

Uh a little bit more uh specifics and details about the partnership uh between uh the stock show event facilities kind of one in the same, and uh and the city of Fort Worth.

Since we moved to the Will Rogers complex in 1944.

Uh we have either invested directly or have a commitment to invest over a hundred and thirty million dollars.

Uh so I think that our commitment is is absolutely real.

Um, event facilities as is just touched on, uh, provided all the design services, all the development services, uh free of charge to the city for Dicky's Arena.

Uh we wore the 50-50 partner, but we also agreed as event facilities to cover anything in excess of 5050 capping the city uh and event facilities actually invested over 350 million dollars in Dickey's Arena and gifted all that back to the city of Fort Worth.

Um again, I'll say that we have done this uh through event facilities and stock show with no charge for any of the services or any of the staff time that we've ever done.

I think it's also important to kind of underscore the ways that we have also been able to partner with the city that that aren't facilities oriented.

Um, for a long time, uh the stock show obviously we're very involved in the equestrian world uh and the livestock world have partnered with the city and the staff at Will Rogers to bring in horse events, and and it's not not nearly what it what it is today uh when we have over you know 360 event days out there a year.

Uh there was a time when it was lacking, and and so the stock show really stepped up and partnered with the city uh to bring in and go cultivate new relationships.

Um, you know, we work with the city uh in the cultural district on on planning uh projects, everything from Camp Bowie uh to help and figure out how to get the the trucks and cement trucks down into badanic gardens to pour the new family garden.

So so we're always there to help support.

Uh we work with Allison and her staff uh to make sure that there's places to store dirt on the facilities that we own that are outside of Will Rogers facility to get that back and forth.

Uh and then in cases where it's hard for for them to contract with somebody that they need to contract with, we step in and contract with them and figure it out on the backside.

Uh the last thing, you know, I'll talk about is really, you know, kind of a big thought uh uh partnership.

Uh event facilities alongside the city in 2013, uh worked very closely to come up with the statute, the project finance zone statute that not only helped provide a line share of the financing capabilities for the city for Dickey's Arena, but is also providing the line share of the financing capabilities for the now convention center expansion.

So again, I just I underscore these things to talk a little bit about the way that we've been able to partner, the type of relationship that we have and the long-tenued nature of of where we're headed and where we're taking this.

Um I'd also like to kind of underscore as we talk about Dickey's Arena, the other ways that we've partnered with the city.

You know, we were a thought partner on how to how do we include MBE and SBE in that process.

So when we were the private developer of Dickey's Arena, you know, we were like, how do we reduce those barriers?

How do we overcome those things?

And and because we know that's important to our community and important to our city.

Uh, we took on all the insurance for that.

We we created an OSIP, we took on all the insurance, therefore there was no insurance barriers to entry from bonding or or or providing enough insurance to be on a project like that.

We took it a step further.

We audited ourselves every month to make sure that we were staying on track and in line with where we were headed with those goals.

And again, I think all this just speaks to the institutional knowledge that uh that the stock show and event facilities, and I know Dicky's has uh with the city and where we're headed.

And I really do want to want to underscore and we'll talk about employees here in a moment, but you know, we know the employees out there, we work alongside them every single day, especially for 23 days, but every single day.

They are important to us and uh we want to make sure that they have a great home for uh for the uh foreseeable future.

Uh now I'll introduce Mr.

Homan and let him take it from here.

Thank you.

Uh thank you all.

And obviously, uh before I got here, I worked in private management my whole career for um you know 11 over 11 years or over 20 years in private management managing facilities across the country.

I moved here because of the opportunity of something unique where the city and the pub and the private side uh developed this arena and any net proceeds this arena was going to generate was going to make it self-sufficient.

That's something that's not done anywhere else in the country, and I found that very unique and very uh moving for my career to do something that uh I felt you know was important.

As you can see across the way in Dallas, these arenas don't last long because they don't redevelop it into it, and they're moving to different locations, and that's not where we're gonna be here.

The reason, you know, the great thing about Trail Drive Management Corp is the only thing we can do with our net revenues is put them back into that arena because we want that arena to look the day the day the day we opened it in 2019 and 2029 and 2039 and beyond.

And we have a commitment to the community to maintain the facility for the entire community.

Uh we've developed strong relationships with local and regional promoters to bring the highest quality events and diverse entertainment to the city, and this is important for a couple reasons because we cultivate local promoters.

We want them to do more events at Dickey's Arena and over at Will Rogers.

We think it's a benefit to everyone.

Uh we operate a self-financy self-sustaining venue, and we establish significant reserves for future capital maintenance improvements.

Because as we all know, this the public side did their part when they put up the 225 million uh through the city, and so our job is to ensure that we don't have to come back to the public again and ask for more money.

So when we need a new scoreboard, new ribbon boards, or anything like that, or new seats at Dickey's Arena, that we are self-funded to do that in the future.

Uh we've demonstrated operational excellence with excellent customer experience standards.

I think this is important on a on an average, we average above a 4.5 customer survey experience score, and that is based on all the attendees that come to Dickey's Arena.

You know, it's important to have good customer experience with the promoters, but it's also the patrons that are using it on a day-to-day basis.

Uh, we've continued partnerships with all of our initial sponsors at Dickey's Arena currently.

Um, community engagement is something that we are focused on.

We're a good neighbor to the district.

We uh we help with Cinco in the district, as you may have recalled this past week.

We were the security and usher team for colonial golf tournament.

Uh we hosted over 23 graduations for high schools and colleges in the past 13 days.

Uh, and we do financial donations, include tickets uh for charity event auctions and donations space for charity events.

And we're also, you know, as Matt mentioned, we're proud to be members of all three chambers.

We support all three chambers.

We're proud that they have supported us through this initiative along with visit Fort Worth, and that's something that means a lot to both Matt and I.

Uh, we're committed to continuing uh continuing to staff all events with Trail Drives Management Employees, which are currently over 2,000 employees, both part-time and full-time, and we're consistently recognized nationally by major industry leaders, including Polestar Magazine, Billboard Magazine.

More recently we were just ranked number one in the United States for venues of 10 to 15,000 seats, and number four in the world.

Uh, this is a huge accomplishment, and it's a great achievement, and it's why people want to keep coming back to Dicky's Arena.

Um, what we can do is, you know, trail drive management uh has an impact already on Will Rogers.

As mentioned, uh, we've been successful in managing the parking lots at Will Rogers since 2019.

I'll remind this council that at that time the city was paying a management company about 125,000 a year.

Uh we are doing that for 25% of that agreement, basically, currently, and we've honored that since there.

And the whole goal was to make it a good customer experience and to manage the parking from one solution for the entire campus.

Uh, we've been successful in management of concerts and events over at Will Rogers.

We've hosted on average about 15 shows a year at the auditorium.

We believe that we can grow that in the future and get up around 20 to 25.

And recently we're named the Food and Beverage Concessionaire and have had immediate success with the events that we've done for the Will Rogers clients.

Our potential contribution is that our senior leadership at Dickey's Arena, our Trail Drive Management Corp has all 20 plus years of industry experience, and that includes managing multiple facilities.

We've established infrastructure for financial reporting policies, procedures, legal standards, and risk management, all that we do in-house.

And we have an immediate contribution of resources from all aspects of the operation.

We hope to experience and maximizing operational efficiencies to produce positive financial results and again generate good customer experience with all the customers out there at Will Rogers.

You know, as we talked about from the jump, we really do believe that this is just another iteration of a public-private partnership.

It's obviously for operations and management, uh, but it but it really is the next generation of of where we've already been.

Uh, you know, we we both have both of our organizations have a vested interest.

Uh, you know, if you all have spent enough time out there, you can't really uh take Dickey's Arena out of Will Rogers, you can't take Will Rogers out of Dicky's.

Uh so we really felt like this new structure was was absolutely advantageous to everybody involved, and and I'll underscore something here.

Uh, even our governance structure has the city involved in it.

So not only will we be reporting back to the city staff uh on a monthly and and quarterly basis about where our budget is, how we're tracking, all of those different things, we will have two members uh of city staff on our board of directors.

Uh city manager from our pardon me, assistant city manager as well as the city council member from the particular district that's in.

So they will be uh part of the governance structure of our organization, which I do believe uh is uh is very, very important.

Um, you know, as we go through this uh when we we set up Dickies Arena and Trail Drive Management, uh, as Matt said, it was set up as a 501c3.

Uh, the specific purpose of that organization and this Guinea Street Management is to lessen the burden of government through through management.

Uh, we really do believe that we can do that.

We we believe that with the stock shows knowledge and expertise on livestock and equestrian events, uh, our knowledge and expertise on the facility itself, along with the operational excellence that trail drive management brings to this, that we we are a great team to take this on.

Uh again, I I think we are both very customer centric organizations.

I think if you've ever been to the stock show, you probably get run over with people excited and eager to tell you hello and to try to help you.

And I know that that's the case at Dicky's Arena.

Um, as Jess mentioned, uh, any excess funds that we generate uh can only go back into this facility.

You know, Matt was pretty humble a minute ago when he talked about uh managing the parking out at Will Rogers.

Uh he has absolutely taken that to another level.

And I will remind you that yes, they do collect a fee for that, but the only thing that trail drive management can do with those funds is reinvest it back in the city owned facilities.

That is all that we're able to do with these funds.

Um, you know, I do think the other thing about this is, and I've touched on this a couple of times, and I just don't think it can be understated as the employees of Will Rogers.

They absolutely love that facility.

They are the heartbeat of that facility, and we know that, and we know them personally.

We work with them every day.

Matt's team works with them every day.

We really do feel like we can work with that team to escalate the customer experience out at Dickie's Arena, and we want to make sure that that institutional knowledge, not only that we have, but that they have stays with that facility.

I know Jess is going to cover this uh in a moment, but I think it's very, very important to Matt and I.

Every single employee out there is going to be given the opportunity to just say at a at equal pay, equal time, equal hours, equal job title to what they have now, if if not better.

And we really do believe uh they'll have very comparable benefits uh as we move forward.

And that's that's very, very important to us.

And uh with that, I'll let Matt wrap it up and we'll turn it back over to Jess.

Thank you.

As Jess kind of alluded to, uh, there is a pre-transition, and that is very important.

Um right now, Will Rogers is a little understaffed to say the least.

And so part of that transition is trying to ramp up employees to help that facility and help the staff that's out there right away.

Uh, we need to establish this organizational chart on board all employees, analyze uh existing contract and vendor agreements.

You know, uh take the network that's currently on the city network and make it its own independent network, which is going to take a lot of time to do uh in order for an October one transition, but we feel we can do it, along with, you know, one of our goals is to provide free Wi-Fi out there at Will Rogers.

It's something that's currently not done.

They charge for Wi-Fi, and we want to make that free to everyone.

Uh telecommunities and uh telecommunications and DAS and then establish marketing and communications and public relations efforts, you know, create a new website for the uh facility that is much needed uh and work with the city chambers um to create more opportunities for small business enterprises.

Uh that's our pre-opening goal, which is a lofty task in a couple of months, but our year to one to two goals are pretty uh important to us as well.

Uh, we want to do significant improvements to the overall campus cleanliness and pest control, which is much needed out there and safety, uh, gain more granular operational understandings, um, identify opportunities for efficiencies with all of our organizations combined.

Uh we want to establish a holistic approach.

Right now.

They don't the staff at Will Rogers is not fully aware of if events are making money or losing money out there, and we need to change that to make it a more um business run operation out there for you know for the facility.

Uh and then training of staff.

It's something that we are pry on at Dickies Arena.

We want to give staff the safety and security needs that they need to make their job successful.

And finally, you know, culture, culture is very important, culture is very important at Dicky's Arena, it's very important at the Fort Worth Stock Show and Rodeo.

And I think it's you know it's something that we want to transition over to there to showing ownership with the employees and making them feel comfortable and proud to come to work at Will Rogers complex every day.

Thank you.

So let's cover really quick the high level or the most important points of the qualified management agreement that you're going to see.

Like I mentioned to you, the MNC will be on your agenda for next week for your consideration.

That MNC is very detailed and covers a lot more.

But here's the most important things that we need to know as we move forward.

Under the QMA, Gindy Street Management Corporation will be responsible for the day-to-day operations and management of the facility.

The city, as required by the IRS, will still be responsible for any operating deficits.

So whether they reduce it, increase it, whatever, we still have the obligation to cover the cost for that facility.

Gindy Street Management Corporation will prepare the budget and present that to us for approval as well as the list of recommended capital expenses, but the city still retains the approval authority over that budget and the capital projects.

And then lastly, again, as we've all said, but I'm just gonna say it again because it's so important: any improvement in the financial position, any reduced city subsidy, all of that money is reinvested directly into the facility.

It is not going anywhere else.

So this is truly a way to create a funding stream for capital projects before we can issue another tranche of debt.

Again, because we have the convention center expansion also in the culture and tourism fund.

You see on the right-hand side of your screen, we are approving with the MNC next week, or it's anticipated that you're going to approve up to two million dollars of transition funding.

Those are going to be the actual expenses that are necessary.

You saw the list on the prior slide that Matt Holman covered about what are the examples of those things that will be funded here.

Again, hiring of employees, it's really hard for us to go hire employees when we think we are about to transition the facility over to the new entity.

So that's just the kind of the biggest example.

An annual management fee, again, this is required by the IRS to have a management fee of some sort.

So we have established that fee at 10,000 per month, totaling 120,000 per year.

They've already mentioned this, but we the city will hold two seats on the Gindy Street Management Corporation Board.

They are honoring the small business program for all contracts over 100,000.

And then just like we did with Britt and the zoo, all vehicles, equipment, and furniture will transfer over to Gindy Street to stay at the Will Rogers Management Complex.

And then lastly, I just want to spend a little bit more time on employees because I want you to understand that we have employees at the forefront of mind as we are going into this transition.

We are following really nearly identical to how we handle the transition for the botanic gardens.

So number one, the ideal solution is the employees choose to stay with Will Rogers, and that means go to work for Gindy Street Management Corporation.

Gindy Street truly wants the employees to stay because they know this facility backwards and forwards.

However, we do know that we have um I I think the numbers around 12.

I had need to verify that, but we have some employees who are almost to their retirement eligibility date.

So just like we did at the Botanic Garden, any employee that is within five years of retirement eligibility, we are going to allow them to stay at the facility and work at Will Rogers.

They will be under the day-to-day direction of Gindy Street Management Corporation, but they will stay on paper as a City of Fort Worth employee.

We will still handle their paycheck, their insurance benefits, et cetera, until they get to their retirement eligibility date.

And then number three, if there is an employee that chooses they would really like to stay with the city long term, they just want to be a city employee.

Then again, we will work with our HR team and we will identify different positions that the employee fits within and and facilitate that process.

Or lastly, we may have an employee.

I hope not, but we may have an employee who just chooses.

They want to work somewhere else altogether.

They don't want to stay with the city, they don't want to stay with Gindy Street.

That is okay.

Any employee today can make that decision at any point in time.

So that is also an option.

But truly, our hope is that we stay, we keep everybody here.

Again, I'll just make the final point because it's so important.

No employee will lose their job or lose a job as a result of this transition, and no employee will reduce from full-time to part-time status.

Everybody stays where they are.

I think it's also worth noting through the negotiations because I was just so impressed with this.

Um, Gindy Street is honoring the tenure of our employees.

So if an employee has five years of service with us, even through the transition, they're honored as if they have five years, 15 years, etc.

And I think that's a really important point.

Lastly, I'll end with this.

This is the timeline that we've laid out for you.

Again, and the MNC will be on next week's agenda for your approval.

If you approve that qualified management agreement, then starting the very next day, all the real nitty-gritty transition period activities begin.

We do already have all of our teams coming together to really start working on the details and get ready for that.

Um, and we've already met with our employees at a high level introductory, just to let them know again, we're we're finally back up and talking about this and moving it forward.

We are live streaming this meeting right now, in fact, to our employees over at Will Rogers, although they get drinks and snacks, so I think they're coming out better than me right now.

Um then we will set up a series of informational sessions for them.

We will also do individual meetings with each employee to go over the benefits at the city, the benefits at Gindy Street Management Corporation, what the retirement looks like, what the payout for their accrued leave that are on the books with the city looks like kind of all those details so that each employee can make a very informed decision and ensure that we've answered all of their questions.

And then lastly, October 1, that management transition starts.

Now, technically, October 1 is a Thursday, but that is the start of our fiscal year, so that is when this will take effect.

So, with that, if you have any questions, uh we are here and ready to answer.

Questions or comments from counsel or Jess or either Matt's?

Yes, Councilmember Hill.

Um, first I wanted to thank you, Jess.

Um, thank you, Matt Homan, Matt Carter, and really all the city staff that have worked on this for so long because this has not been done in a vacuum, it's done for years.

This has been in the making.

So I appreciate that.

Um, and to the Matt's, um, y'all have taken in account just not the history of Will Rogers, but you've honored the history of Will Rogers, um, the patrons that are very unique to that facility and improving the customer experience.

I think as a representative of this area, um, I do get a lot of feedback, some positive, some negative, and I feel like there's a lot of opportunity for improvement.

So I look forward to that.

Um, and lastly, I really appreciate the um focus on the livelihood and the well-being of the employees at Will Rogers.

I think there's been a lot of consideration to go above and beyond to make sure that we're taking care of them, and I'm greatly appreciate that.

Thank you.

Any other questions or comments?

No, thank you for being so thorough.

Yes, I appreciate it, and truly, you know, they did a great job of recognizing some people.

I I had forgotten to do that and I wrote it down, but we have had a lot of staff from across departments working on this, not just public events.

Our city attorney's office has been invaluable.

Taylor and Dennis have been instrumental.

Um, also our finance department as we look at the debt, our HR team getting ready for all of this.

This has really been an all-hands-on-deck exercise, and we appreciate all of their contributions as well.

So thank you.

Thank you.

Council will move to our next presentation.

Presentation on proposed economic development agreement with Seiko Enterprises, Michael Henning.

Okay, mayor.

So I'll do my best to keep this brief, but I do want to take a moment just to recognize the work of uh the Terracial Water District.

I believe we've got uh Susan Alneese here in the audience as well as uh representatives of CECO here as well.

Uh but truly the project I'm about to present would not be possible without the partnership of the water district.

So the purpose of this presentation is to uh discuss a proposed economic development program agreement with SECO Enterprises for a development on Panthera Island.

And of course, that project would be located here within the Panthera Island District, but more specifically, the project is proposed to uh be located here right in the heart of the district, uh, at the corner of North Main Street and Northeast uh 4th Street.

The property also has adjacency to North Commerce Street and would be up against the proposed canal, which would be built just to its north.

As we'll talk about here in a moment, this project and the site proposes a lot of strategic advantages.

So CECO Enterprises is based out of Austin.

They've delivered several major projects in that area, ranging from multifamily retail office.

And what they're proposing to do on this site is to build a 290 unit mixed-use multifamily apartment project with ground floor retail, totaling approximately 250,000 square feet of total development and with a minimum capital investment of 100 million dollars.

The overall impact of this project is really difficult to overstate.

This is anticipated by the developer to be the first phase of development.

They do owner control an additional 32 acres of development of property nearby that they are viewing as a possible opportunity for future development.

And then again, the location of this project being where it is, this is viewed as being a potential catalyst project for generating other development opportunities on adjacent sites and as serving as a proof of market for the district.

So I just want to dwell just for a moment just on the picture on your right here.

This gives you a sense as to what is there today, which is not much.

And this gives you a look at what the developer is proposing for that site.

This is a view from the corner of North Main Street and Northeast Fourth Street.

Now the project does face a number of challenges, and that includes a verified financial gap.

One of the key drivers of the financial gap and the overall challenges that are preventing this project from moving forward ultimately comes down to just the elevated risk of delivering a project like this in an unproven district like Panther Island.

This project would also be required to deliver fairly atypical public improvements, and we'll be a little more specific about those here in a moment.

And at the end of the day, while market rents for this area are strong, they're still not quite at a level that are necessary to be able to achieve the necessary yield that would be required for a project of this scale and of this quality to be delivered within this district.

And then finally, the reason why we're here having this discussion is that public and pro public support of the kind that we will be outlining really strengthens this project's ability to be viable to be able to move forward.

So as part of the proposed agreement, the developer would be committing to building a new high-rise multifamily property with ground floor retail and investing a minimum of 100 million dollars in total development costs, of which 75 million dollars must be in hard costs.

The developer would be committing to a small business goal of 30% of real property improvements going toward small businesses.

And as part of the terms of the agreement, the developer would be committing to a minimum 12-story mixed use development with a minimum of 290 units of rental apartments, 9,000 square feet of retail, and public improvements that include providing pedestrian access to a plant canal, the bearing of utilities, particularly overhead electric lines, and the installation of a water quality device given the potential for runoff into that canal.

This development would be required to be completed by no later than December 31st, 2030.

To help make this project happen, staff is recommending that the city enter into an economic development program agreement to provide up to 10 annual grants, and those grants will be based on a combination of two potential sources.

The first would be 80% of the city's incremental property taxes generated by this project, and only if necessary, we would supplement that with funds from the city's economic development initiatives fund with an overall $1 million annual cap for each of those 10 possible years of support.

Now, those annual grants, the actual amount specifically provided in any given year, would be based on the verified gap that is necessary to achieve a target 6.5% yield on cost.

Now, what is the yield on cost?

So the yieldable cost is just a primary metric that real estate developers, investors, and lenders look to to be able to evaluate the strength of a given investment.

It at the end of A looks at the income that's produced by something relative to the cost of purchasing or building that thing, right?

And so the overall effective bare minimum yield on cost for a project of this scale and of this quality in this market is 6.5%.

When you begin to drop below that point, then you begin to reach a point where it makes more sense for investors to look at just acquiring a building that's already been built or to invest in something like a 10-year treasury bond, which has a yield of about 4.5% today.

So the grants that would be provided to this project would only be based on the gap that is necessary to be able to hit that threshold.

If it is less than $1 million annually, then it would be reduced down to that mark.

If they clear that benchmark of 6.5%, then the city would not provide any granted within that year.

Similarly, the grants would be would be reduced proportionally if rental rates exceed projections for this project, and those rates would be stated within the final agreement that would be authorized.

Now, as you can see, this agreement at the end of the day is really designed to specifically meet this project where it is and to be able to reduce the perception of risk, which is the thing that is hindering this project from being able to move forward.

And in doing so, it actually mitigates that actual downside risk while delivering a high-quality, high red high-rise residential project that can serve as a comp for other projects within Panther Island.

Staff is also recommending the waiver of transportation impact fees and certain other building fees associated with this project.

I mentioned that this project has a lot of strategic value, primarily given its potential to be able to serve as a catalyst for other development on nearby sites.

It fully aligns with the strategy that was outlined in the Panther Island Real Estate Strategy and in Trinity Revision 2.0.

As I mentioned, this is really intended to serve as a demonstration for the market for a project of this kind, while also through partnership with TRWD, supporting canal delivery within Panther Island.

So just to summarize, again, we're talking about a minimum 100 million dollars in total capital investment, 250,000 square feet of development, and a the delivery of a major catalyst project on Panther Island.3 million dollars on the net present value basis, so today's dollars.

This project would carry a 13.7 to one private to public ratio.

I also want to quickly mention something that you will see in the MSE that will be in front of you next week, which is that in addition to the grant that would be provided to the developer to support this project, the city uh this agreement in response to a policy change that the city council adopted back in December is going to be producing an additional 5% grant that will be generated by the incremental taxes generated by this project but paid not to the developer but instead to the housing finance corporation to support affordable housing within the area.

Now, as many of you know, the city is a participant in the Panther Island in the Trinity River Vision TIFF, TIFF 9, and it will be withholding its incremental revenue from this project from what it would otherwise contribute to the TIFF during this 10-year period.

But beyond that, it will continue to contribute to the TIFF, and even during this 10-year period, all other participants in the TIFF will be contributing their gains from the investment that would be delivered through this project.

And so overall, we estimate that that impact to the TIFF would amount to approximately 32 million dollars over the lifetime of that TIFF district.

And then finally, the city is estimated to net approximately 1.6 million dollars growth and 1.2 million dollars on the net present value basis.

As far as next steps, staff is recommending that the city uh enter into the e-comp development program agreement as outlined.

Uh and an MNC will be brought in front of council for consideration next week at the June 9th council meeting.

I'm happy to answer any questions.

Thank you, Michael.

Questions or comments from council, Councilman Flores?

Uh thank you, Michael, for that presentation.

I also want to thank I think Joshua Needham from Psycho Partners is here.

Uh appreciate the ongoing discussions and the work that you've done with staff.

You know, we've discussed this before on council.

It is a catalyst project for the Panther Island area that we're trying to uh you know get ignited, and I think this is going to serve uh the you know that purpose, six and a half target on yield cost, I think is uh realistic, you know, the current market conditions uh based on what I have been informed about.

Um we know about the uh traffic impact fees, you know, the uh the proposed waivers, uh permitting and other fees, and I don't recall the exact number, but uh those are being considered as well.

Uh street utility infrastructure construction by the city of Fort Worth.

I think that's a very important component uh to keep in mind.

And again, uh this is a partnership.

You know, it extends beyond the city and SACO also with TRWD who's interested in doing you know some innovative, you know, water quality projects as well that they're still discussing with Seiko.

So I'm in support of it.

Thanks, Carlos.

Any other questions or comments from staff or for council?

Okay.

Thank you, Michael.

Appreciate you.

Next up is a discussion on our downtown library and community arts.

Dana Bergdoff will lead our presentation.

All right, thank you, Mayor and Council members.

Appreciate this opportunity to provide this update to you.

I'm excited about this presentation, but if Midori Clark could have been here today, she would be super excited.

So I want to pass on that in the.

Well, that was almost mean that she's not here today, I guess.

So she worked very hard on this, but she's got taken away.

She'll be back tomorrow.

Okay, thanks, Dana.

Thank you.

So we'll visit about the downtown library, 512 West 4th Street, and 1300 Gendi Street and talk about next steps.

So, as you'll recall, when we sold Central Library, we decided that we needed a new uh needed a downtown branch to serve uh residents and and folks outside of downtown.

And so at that time we had uh what was a win-win opportunity with 512 West Fourth Street that was owned by the Center for Transforming Lives.

They were wanting to invest in our Barrie Riverside Urban Village, and so the sale of that property to the city created a win-win where we had an opportunity for a community facility with the central with a downtown branch library and then investing in in Barrie Riverside.

As we hired the design build firm uh and worked with through community engagement, um there were some layout challenges, some of which we we knew when we bought the building, but they really um became a bit of a pain point as we were working through design.

So one is um that north entrance that faces third street is the single entrance for families and children, uh transient adults, uh daily box truck deliveries, and and so on.

So it's a pretty congested area and it's a very small lobby uh with no security space.

Uh so if you're familiar with a downtown or urban library, security is important.

Um, and as you come into that entrance, you're immediately uh hit some split level stairs where where you go up or down.

Um, and then the lower level is broken up into multiple rooms.

Uh it was the former daycare for the Center for Transforming Lives.

The upper three floors, that's actually the upper three floors are actually an L shape, which is a little bit odd for a library space.

Um, but those were the where the studio apartments had been located that served the women and children that that the center had served previously.

And uh prior to that was a was a lodge usage.

Um and so then lastly, uh we knew that the library would be spread out over six floors, but that's actually harder to manage and um and and trickier from a security standpoint.

So uh the firm um that we'd been working with came up with a really inventive solution to try to address some of those uh space constraints, security constraints, logistical issues, but it required an addition to be added to the north end of the building.

And as they looked at other renovations that would be required on upper floors as well as just the equipment and elevators and so on, it came up to a roughly 30.5 million dollar price tag to use that property for a downtown library branch.

And so Midori being very wise came to us and said, when she was unveiling those numbers to me, said if we're gonna spend this kind of money, and not get a modern library that has some of the amenities and the operational characteristics and innovation that we'd really love to see in a downtown library.

Should we revisit the question about whether this is the right building for a library?

So we came up with a proposed plan, and given some of the uh some of the demands given the closure of Gendi Street, the idea that we need some community arts space.

You'll recall that Midori uh came to us, you've you've met Lindsay Russian that we've got some community arts opportunities in the community, right?

With our library spaces, our community center spaces to have some gallery space, but still to have a center where folks to come together for community arts was very important.

And so the idea was could we pivot and consider West Fourth Street as a new arts community arts center for for our community?

And with that, select a new library site where we could potentially do new construction.

I think our original idea was that we might have to wait until the 2030 bond program.

We heard a pretty harsh no to that idea, and so thank you for that direction.

And so uh kudos to to Jay and Reggie and Alex Loffer on their team for determining that with the defeasance of the debt, which is described in the IR you have on your work session today that'll occur later this year, that that'll create some debt capacity where we could move some money around with certificates of obligation funding to enable us to have dollars to actually construct a new downtown library and really meet the needs that we've heard from community residents that we've been engaging with so far.

So very interesting idea here.

So I want to also express thanks to our property management department.

So Marilyn Marvin and her team went through and looking at uh looking at the a block that we're we're a couple of blocks that we've looked at downtown that we're evaluating for potential acquisition.

So they've come up with if you have a 30,000 square foot library, what might that cost?

And they came up with this cost here you'll see on the screen of 36 million.

We're very fortunate to have the Fort Worth Library Foundation that's engaged in wanting to support a downtown library, and so there's some hope that we'll be able to have some significant fundraising in partnership with the foundation that could add on to the costs that property management provided and give us a really exciting library opportunity for downtown for our residents and visitors.

So, pivoting back to Fourth Street.

So, in thinking about it for potential community arts, these are two photos from inside the building.

It's a beautiful historic building.

On the right is the first floor grand room that could be uh potentially has a lot of good light, and then on the left is the second floor where there's a small, there's a theater there and and space for audience or other meetings and events.

And so uh we as staff brainstorming, we've toured the toured the site and thinking about just from from bottom to top, the lower level daycare might lend itself the way it's broken up into different rooms, could be an artist marketplace, was one idea.

Uh the first floor grand room could be used for community arts display space and events.

That second floor theater would lend itself to performing arts and events, and then the third through fifth floor studios would lend themselves to become artist studios, which there are certainly other artist studio spaces in downtown, but we think this would be a more affordable option that the city could help make available to the community.

So, but that's just city staff looking at this, looking at these ideas, and so it's really we think important to have a working group of folks who care about this topic and could help us gather public input on the preferred uses for West 4th Street as a new city managed community arts incubator, and incubators the term that's been discussed with Midori and uh Wesley Gentle actually about how we might use that term to really help grow community arts here in Fort Worth.

So on the working group, we're excited to have I think Bob Jameson, who retired just in time, to uh as our former CEO and executive director of Visit Fort Worth, Bob Jameson has graciously agreed to chair a community arts working group.

And I also want to thank the council women who have agreed to serve on the community arts working group, Councilmember Peoples, Hill, Beck, and Martinez.

I would also, uh Wesley Gentle is the executive director of Arts Fort Worth, and then others that'll be determined.

We're getting recommendations from the council members who appreciate that, and so we'll get that working group formed.

But the idea would be that they would consult with community arts stakeholders on the uses for West 4th Street and what would best serve the community as well as be feasible to operate.

So that leads us back to 1300 Gendi Street.

And so various stakeholders of course have have spoken to the spoken to the city, reached out to the city about 1300 Gendi Street, and we're fortunate that some foundations and others have approached the city about funding a feasibility study to determine the most appropriate use for the property.

And so that would include identifying what we would hope would be financially sustainable arts and culture uses and operations.

They would integrate with the existing cultural district area uses and attractions, and then identify partners to help us fund and implement the recommendations of the feasibility study.

And so again, we're very fortunate to have these funding partners who've come forward Amon G.

Carter Foundation, North Texas Community Foundation, Goff Family Foundation, Scott Foundation, and lastly visit Fort Worth.

And so you'll note that we have North Texas Community Foundation listed as the lead, and so they would be the entity to contract with the study consultant.

We understand that that study would be able to begin in July and be completed in four to five months, and that that consultant working working with the those funders and others would meet with the arts and culture stakeholders on that feasibility study.

So, in terms of next steps, we'll finalize the working group for community arts for West Fourth Street and schedule those working group meetings.

On June 9th, City Council will consider the debt plan that was laid out in the IR today.

And then June through August, we're hopeful that we'll be able to secure the site for the downtown library property.

And then lastly, in July, is when the feasibility study would begin for Gendi Street.

So with that, I'm happy to answer any questions that you might have.

A lot of great updates.

Thank you, Dana.

Councilmember Beck.

I just want to start by uh thanking staff for uh hearing that very harsh no when it came to making sure that we have a downtown library.

Um this goes back years to when we sold our initial library and we promised the residents of not just downtown but Fort Worth that we would provide them with a downtown library to replace what we were taking away.

And we have uh to date not given them that, and so I think that thank you for coming up with a plan and not making us wait until the next bond election to see this through.

It is so important for a city to have a Hallmark Library, and I'm really excited to see what we build.

So I really want to thank staff.

I also really appreciate what we're doing for the arts community in this particular.

We could have sold the building, we could have said it didn't work for us, but we found a way to we're finding a way to make it work for our community and to fill a gap that is desperately needed.

So I just I know that I've been not the easiest to to deal with on this, but it's because I really firmly believe we need a downtown library, and so I think this is um sometimes the longer route is the better route because I think it's getting us to a better community solution.

So thank you, Dana, and thank you, Jay.

And Midori, I know she's not here, but thank you, Majori.

Councilman Hill.

Just want to reiterate what Councilman Beck said.

This is a lot of dominoes had to go into place, and you'll really thought outside the box, and I commend all the city staff that have worked on this because it's taken a whole lot of effort, and we're not done.

This is just a first step, but we really appreciate everything you've done.

Thank you.

And maybe I'll just note that we've discussed, as you know, Dana, a need to make sure the Committee on Community Arts has a finite amount of time.

We're going to get to work quite quickly, have a series of meetings so that no one's waiting any longer, so that we're kind of aligning with our debt financing plan to get the community arts center up and running downtown, which is I'm hopeful that they'll come back with recommendations by this fall.

That's great.

Thank you.

Chris, did you have something to say?

Yeah, I just had another thank you because there was a lot of moving parts with this, even with the Transform Alives.

You talked about that today, that uh the this council and even the community gave a lot of feedback and we kept having the pivot.

And so you guys have done a great job pivoting that.

I think that the library, the community arts, and even Transform Lives as a better home within the city of Fort Worth, and they are community uh giving back.

I just saw a post today that Transform Lives was able to give out so many grants to the community because they have a bigger space to do the work, even with the grant they got from Tarran County to do uh revitalization.

So thank you guys.

Fort Worth is doing a really good job, and I think we want to make sure we give the kudos one time all right.

Thank you again, staff.

Thank you.

Any other questions from staff?

Thank you, Dana.

Mayor Ed.

Oh, Councilman McCrane, please.

Hey, sorry, just want to make a point.

I commend staff for putting this together and exploring.

I do want to make the point of the creative use of the what we'll sorry and get the feedback there, but the space downtown doesn't necessarily replace the theater portion of what was existed down at the community art center.

My own daughter went to the programs there.

So I just wanted the group that's forming to put that together just to keep uh that in mind as part of it.

Thank you, Michael, and thank you to Bob Jameson as well to volunteer to serve.

Okay.

Our next presentation council is data center development regulations, and Jess McEckern will kick off our presentation.

All right.

Well, what we've all been waiting for today is really to talk about data center development regulations.

Um it is no surprise this is a really hot topic right now here in Fort Worth, here in the state of Texas, and really nationally, and rightfully so.

We're seeing a huge boom in interest in data center developments, and I'm gonna talk a little bit why in just a minute we're seeing so much here in Texas, and then what can we do about it specifically here in Fort Worth?

I will tell you ahead of time.

This is a very detailed, long presentation.

Um, I really tried to to reduce it as much as possible to stay on point.

But there is so much important information that you need here and that our public wants to hear.

So bear with me as I work through it all.

At the end, I welcome any questions or direction, input that you want to give me.

Um, so a quick outline of what we're gonna do today to walk through the presentation is we're gonna start with a just a smidge of education about what is a data center, why is there so much interest in Texas in general?

We're gonna talk a little bit about the economic impact of these types of development here in the city of Fort Worth.

And by no means am I suggesting that's a decision point, but I think it is an important um factor, just piece of information that you council will be interested in.

And from there, we're going to walk through four areas of city regulation that we have the authority to regulate.

And at in each section, so zoning, noise, water and wastewater treatment, and then economic development incentives.

I'm going to inform you first on what our current regulations or policy is, and then second, what our staff recommendations are should you choose to move forward with some of our recommendations.

And then we're going to end with a um potential next steps.

Okay.

And also, I just want to share with you, um, as we've been working on this now for a couple of months.

This has been a huge effort for our city staff.

We have a number of people across departments that have worked on this, and I really want to recognize their efforts because they've done a lot of spent a lot of time both in the research and looking at what other cities are doing and providing guidance based on state law to inform what we have here.

Our development services team has been invaluable, environmental services weighing in on some of their areas, economic development team, water and wastewater utility.

I have learned so much about water and wastewater.

I don't think Chris will turn it over to me to operate fully yet, but you know, I feel confident and close.

Um, our city attorney's office, again, invaluable as we have worked through all of this and all the different aspects.

And then I do want to give a special thank you to Bethany Warner and our city management office.

Um, she has been the glue that has kept all of our parts moving and kept me on track with everything as well.

So huge thank you.

And as we get to each section and I and I cover the recommendations that we're putting forward to you, I do want to just let you know how we got to some of these recommendations.

It really is based on our staff research, based on our city attorney's advice and the laws that we have governing our operations, and then also very heavily from the input and the information that residents, landowners, and even data center operators and developers has shared with us over the last couple months.

We truly could not have gotten to this point without the input of all of those individuals.

So starting with just the education piece about what is a data center.

A data center is just a physical facility that houses IT infrastructure such as servers, storage devices, networking equipment to store, process, and manage digital operations and data.

Simply put, it is the backbone to nearly everything we do in a modern day society.

So if you are searching on the internet, if you check and respond to an email, if you stream a video, if you are watching this city council meeting online or even on TV, if you check out a digital book from our library, use GPS to find your directions, use any kind of an app, so many more things.

Use banking, book an airline ticket, anything you do, you are touching a data center in at some point.

So they really are unfortunately the backbone of everything.

They are coming to Texas specifically because we have a very business friendly environment.

We also have lower cost electricity in general compared to some other states in the U.S.

We are known for faster permitting times to get from concept all the way through to construction.

We have state incentives and exemptions that are operated through the state, and I'll touch on those in a second.

And then just in general, Texas has a lot of land available, and a lot of that land is in proximity to power infrastructure.

And as I've learned in researching this topic and talking to different data center operators, power infrastructure is probably one of the most important aspects that's needed, as well as the water.

As we approached the preparation for this presentation and both thinking about how do we educate on what our regulations are today, but really how do we put forward recommendations to you, council?

How do we tell you where we think we should go as a city?

We had two main goals in mind.

Number one, it's how do we protect the health, safety, welfare, and quality of life of our residents that are potentially impacted by these data center developments, and how we do that is by leveraging our regulatory authority.

And number two, how do we position Fort Worth to responsibly capture the economic benefits of these data center opportunities by requiring the best in class data center development practices?

It's also important to note that data centers are not a new thing.

Again, we're having a boom in interest right now in developing new data centers, but they have been here in Fort Worth for quite a long time.

And I'm gonna make the distinction too as we're going forward through this presentation that what we're talking about are data centers as a primary use.

So, in other words, a standalone data center, a building that is constructed for that sole purpose.

So we are not talking about a data center that, for example, is here in City Hall.

We are not talking about Terrant County's data center.

We're not even talking about data centers that are accessory uses to many of our corporate locations here in the city of Fort Worth.

Again, standalone data centers as a primary use.

So right now in Fort Worth, we have four data centers already in existence.

The oldest one was constructed in 2000 in Council District 5, and then we have three currently located in Council District 10.

One of those was constructed in 2003, one in 2008, one in 2015, and then our newest one that was just constructed last year in 2025 was an expansion of one of these current data center operations in 10.

Those four data center developments comprise a total of 10 buildings and are cumulative just under three million square feet.

And then just a few notable facts about what we have here in Fort Worth today.

Our smallest data center is a two-story data center that totals 209,000 square feet.

Our largest is a campus totaling 1.5 million square feet.

But the average of all of the individual buildings, if you took that, is 275,000 square feet.

Again, and I already said this, our first build was over 20 years ago.

Our newest was just last year.

We also have several data centers that are in various stages of progress.

So one is currently under construction right now in district seven.

We have four more that are proposed, one in each of districts three, six, seven, and eight.

These are all ones that have their zoning in place.

They are working with ERCOT and are anticipated to be approved for interconnection into the grid.

They're working with Encore and are getting their approvals to either construct or to tap into existing substations.

So when I say proposed, I think reasonably anticipated to move forward.

We do get interest all the time across the board for any new development.

And it could be as simple as somebody saying, Hey, I'm thinking about this piece of land, what do you think?

Um, or it could be somebody asking, do we offer incentives?

Here's a concept I have in mind.

Again, that's not anything that I'm gonna call speculative in nature.

I'm not including in what we're counting in progress.

And then we also have two data center developments that are currently contemplated in our ETJ, both of which are within our water service area, our CCN, and so both of those will be served by city water even though they will not be in the city limits.

And I'll touch a little bit more on that here in just a moment.

When we're thinking about how do we evaluate our regulations and our policies related to data center developments, it's really important to note that there's really two sides of what we're looking at as a staff perspective.

There's both opportunities and there are impacts.

So from an opportunity standpoint, data centers are a significant private investment.

And so with that, they have a substantial commercial tax base, and that means significant property tax revenue.

Again, not a decision point, but definitely an important factor.

Every year, council, when we talk about your budget, we talk about the property tax base composition between residential and commercial.

And right now in the city of Fort Worth, you saw this very recently in one of our budget reports.

63% of our property tax base is residential in nature, and 37% is commercial.

As a really thriving city or healthy city, we want those two paths to get back really to meet in middle 50-50 or even have our commercial tax base exceed our residential.

And I'll come back to this in just a second as well.

There is substantial revenue in property tax in the form of property tax, not just to the city, but to all local taxing jurisdictions.

And the other benefit or opportunity with them is that most of these data center developments have very little impact on city services.

So when you build one of these, it's not like a distribution facility.

It's not like a there, there's not a lot of congestion or cars or vehicular traffic.

It's very minimal impact on your roadway network.

We looked at just so we could understand at a staff level are do they require a lot of calls for service either from police or fire or code enforcement or that kind of thing.

So we also looked at our our complaint data over the last five years at all of our existing locations, and we found that there's zero complaints.

So these don't generate calls for service from police department or fire or that kind of a thing.

Because they're not residents, there's not a requirement to construct additional community centers or libraries and that kind of thing.

But really, what I want to hone in on is this last line here on the opportunity slide.

Anytime a data center development is inside the city of Fort Worth, we have the opportunity to have oversight and say in that in that development.

And we can do that through our zoning, our development standards, through noise limits, through our water and wastewater utility, through our policies, we can determine how much water is going to be served and that kind of thing.

Any of these developments that are outside of our city limits, we have zero say and regulatory oversight into that development.

And in some cases, especially when we're talking about water, that development is likely pulling from the same water resources that we are, but again, we have no influence in over how much water it's pulling from, no say in how that development is situated against adjacent property owners, et cetera.

So we see tremendous value there by having it at least in the city.

But it's not all sunshine and roses.

There are definitely real impacts that we have to consider, and these go truly to any development, but especially data centers as well.

There's concerns over the impact on our resources.

So the availability of water is a huge concern and one that we are asked very frequently about.

There's concern over what's going to be disposed of into our wastewater system.

There's concerns over energy and the reliability of our grid here in Texas.

When there is close proximity of a data center to a residential development, there's very real concerns about the noise to the neighbors, to potential air quality impacts as outdoor lighting is one that we hear pretty regularly anytime there's industrial near residential.

And then just across the board in Texas, we haven't heard as much concern about this here in Fort Worth, but in Texas, we're hearing about the concern for over-proliferation.

Again, we're hearing a boom.

There's a bunch of data center developments that are trying to get to market and get constructed.

Are we going to end up in a world where we have too many data centers?

Are we going to end up in a world where we have vacant buildings or buildings that are just no longer needed?

And then in hand with that, are we going to end up with overbuilt infrastructure?

This is commonly called stranded assets, and you'll hear it talked about at the state level as well.

But it's where either a city or the energy side will build infrastructure based on the anticipated need of a development, and then that need either is lower or just doesn't come to fruition, and now we've made that investment.

So all things that we are striving to address as we work through this presentation.

So here's a snapshot on again the economic impact to the city of Fort Worth.

It's again looking at this top line, the big bold box that you see there, looking at the last five years of our four existing data centers that are here in the city, our gross property tax revenue was a little over $83 million.

Now again, think about that from the school district's perspective.

Their tax rate isn't double ours, but it is significantly more than ours.

That's again a huge impact to a school district as well.

In 2024, if we look at just again that revenue stream that was in 2024 off data centers, it would have taken the equivalent of approximately just under 8,400 average value single-family homes to generate the same level of revenue.

We took a look at that to say, okay, from the proposed data center developments that we know are in progress, what would that revenue look like in 2030 and how many average value single family homes would it take to generate the same amount of revenue?

And that number in 2030 is 22,700.

Now, the one caveat I want to put with that is that we built this model in 20, the 2030 model, Fort Worth Lab built it, based on what we know today from those four in progress data centers.

So a couple caveats with that.

One of the four that are in progress are not actually anticipated to start construction until 2030.

So that revenue is not accounted for in this model at all because it will not be online in tax year 2030.

Additionally, the others that are in progress have given us phased construction plans, so they are not anticipated to be fully built by that date as well.

So this accounts for the phasing that we are aware of today.

So coming back to our property tax base compensation.

If we looked at again that 2030 mark and they come online in the phases that they're anticipated to come online, this would shift a little bit to where our commercial tax base would jump up to around 54%, and our residential tax base would drop down to 57%.

I think it was 53 and 57.

So it starts to, I'm sorry, 43 and 57.

It meets it a little bit more in the middle.

So it starts to inch towards that closure point.

And again, that's not with the all four of those proposed data centers coming fully online, that's in phases.

So this is a really big topic, not just here in Fort Worth, not just in a lot of the other cities that we've been watching and researching, but the state as well.

In 2025, the 89th legislative session, Senate Bill 6 was adopted, and Senate Bill 6 served to establish a regulatory framework for the electric reliability.

It really aimed to ensure that as these large loads, and this is not limited, by the way, to data centers, this is any large load over 75 megawatts, that we are preserving how it's connected to the grid, preserving that electric reliability, ensuring that in emergency situations we can require their electric load to be shed so that we are preserving the electricity for those in critical need, hospitals, residents, etc.

It's also aiming to shift the cost burden of the direct infrastructure needed for these extensions that might be needed to serve them, to serve new developments to the actual development instead of making it a system-wide cost.

And then it also is enacting or looking to put in some data transparency measures so that we are able to better account for what's to come.

In the 90th legislative session, we fully anticipate this date to take up more action related to data centers.

But we don't yet know what that's gonna look like.

We are already seeing both Senate and House committees have hearings on interim charges right now, and so we are closely monitoring all of those hearings just to keep tabs on what we expect to come.

We are seeing interim hearings right now on the electric grid, on the water supply, on infrastructure demands that are needed, on economic development, just in general regulations around the data center industry and what they need.

Everything that I'm gonna give you here today that is making recommendations for our local amendments, both to zoning to noise, to water, to economic development.

Just know that the state is going to take up this industry or the development around it, and we may see changes coming up next year.

If we do, we'll come evaluate those changes and make sure that we are always in compliance with state law.

But we think it's important that we act sooner rather than later, and that we take a look at what should we be doing here in Fort Worth now, as opposed to waiting on the state next year in the legislative session.

So we hear a lot of questions right now from concerned constituents about a number of things, and I think this is a really important just pausing moment, spend a little bit more time here on what do we in the city of Fort Worth have the authority to regulate?

Because a lot of the concerns we don't, and some we do.

So starting on the left-hand side in the state of Texas, we have no regulatory authority over anything related to the electric grid or to power generation.

That falls to the Public Utility Commission of Texas.

They establish all the rules for the state.

The public utility of commission also has some oversight into water and wastewater as well as electricity.

Under that kind of umbrella, you have the electric reliability council of Texas, which operates and manages the grid that covers 90% of Texas.

And ERCOT is an independent body that I think of it like the stock market.

So they are managing the transactions back and forth of power on the grid.

So they're managing all the generation units that are coming online, they're managing the retail electric providers, the end user customers, the transmission and distribution companies, they're connecting all the dots and kind of, if you will, facilitating those financial transactions in the sale and distribution of power.

For statewide water planning, that falls under the responsibility of the Texas Water Development Board.

The Texas Water Development Board is the lead planning agent for the state of Texas, looking at water resource availability for the entire state of Texas, broken up into regions, and they are charged with planning and looking at the state's future water needs, both taking into account population projections, anticipated growth, future demands, and what's needed over the next 50 years for each region.

They're also charged with evaluating what available resources are for each region today, what projects could reasonably construct it in the future, and then how much are those projects going to cost?

And so another aspect of Texas Water Development Board is to serve as a financing institution for these very large infrastructure projects that are needed to get water resources where they are needed.

For air quality, the Texas Commission on Environmental Quality is the regulating authority.

Predominantly they focus on air emissions right now, and I will note that we have a local air quality program that we administer under the purview of TCEQ.

We do the initial complaint investigation, we do some limited enforcement where our hands are tied, or is that we can only enforce what TCEQ regulates in their rules.

So we can't adopt anything that goes above and beyond what TCEQ has today.

And then lastly, on the state side, we've got the state tax exemptions and incentive program.

The exemptions are administered through the Texas Controller of Public Accounts, and the state sets the criteria that are required for their exemptions.

They do have some high criteria for data center developments and they administer that program.

But what I will note is that does not affect our local sales tax.

So even if a development gets a state sales tax exemption, they do still pay local sales tax to the city.

And then the state's incentive program is administered through the Texas Economic Development and Tourism Office, and that is housed under the Texas Governor's Office.

So now on the right side, let's think about what the City of Fort Worth can regulate, where we have the opportunities to make sure that we are crafting rules that lead to the best in class types of development.

Number one, and probably our most notable, are our zoning and development regulations.

Council, you see our zoning cases every month.

You know exactly what this is, but this regulates where certain types of development can be constructed, and then our development standards establish how that can be constructed.

And we do that through things like setbacks, through height limitations, lot coverage, landscaping, buffer requirements, all of those things.

We have the ability to set local noise rules so we can establish maximum sound levels for certain areas.

We also regulate the local water utility, and I'm spend more time on this, and we do that in cooperation with the Terrant Regional Water District, who is our raw water supplier.

And lastly, we have the oversight to determine what city, what local economic development incentives we want to do.

So I'll touch on this when we get to that section.

But council, you adopt our economic development incentive policy every other year.

You would review it every other year.

We just did an update last year, but we're going to recommend some changes to that as well that are tailored to data centers.

Okay.

So quick pause here.

Any questions to this point so far?

Excellent.

Alright, let's keep going.

So jumping into zoning and development regulations first.

Again, in each section, I'm going to first tell you what our rules are today, then I'm going to tell you what proposed amendments we have going forward.

So currently, today we define a data center as a building to house and computers and support systems used mainly to process data and transactions.

We allow data center developments in all three of our industrial zoning districts by right.

Our three industrial zoning districts are light, which is typically a very low-intensity industrial use.

So typically you can think of something that has no noise leaving the site, no odors, no, there's really no impact to anybody off-site.

Some examples on the right hand side of what could be an eye-like industrial, includes like a warehouse type use, distribution, or even light assembly.

So light assembly, think of like assembling furniture.

You get all your pieces in, you're not producing any of those pieces, you're just going to put them together.

And then I'm also going to note really quick, you'll see that there on the right hand side.

Under each industrial heading, you will note that our zoning is a tiered type of zoning system.

So in ILIT Industrial, you are allowed to have any of our commercial uses plus ILID industrial, medium industrial builds on I, so you could have any commercial use, any light industrial use as well as medium industrial and so on and so forth.

A medium industrial is a more moderate intensity type of use.

Again, still noise or odor, dust or fumes coming off of the site, but it might be a type of processing facility.

And then lastly, for heavy industrial, that is your more intense type of industrial use.

So some examples of that would be a concrete batch plant, a lumber yard, solid waste processing facility, a recycling facility, something that really is going to have more outdoor impacts, typically has noise, maybe it has chemicals stored on site, that kind of a thing.

As it stands today, any type of data center development follows our standard industrial development standards.

We do not have any data center specific development standards.

So in an industrial development, any type of industrial development that's coming online, there is a front setback of up to 20 feet if fronting a residential.

So think of across the street from a residential property.

On the side and rear, there is a 50-foot setback if it is adjacent to single family or duplex residential.

If it is adjacent to a multifamily residential, then there's a five-foot side setback or a 10-foot rear setback.

If a data center or let me back up if any type of industrial development is adjacent to commercial or other industrial, there are no setbacks required.

There's a max height of three stories or 55 feet in light industrial or a max of 12 stories or 120 feet in medium or heavy industrial.

All industrial developments require landscaping and buffers of four percent of the net site area or a 30-foot depth coverage along all public roadways.

All developments are subject to our urban forestry requirements.

For industrial, that to means to retain and or plant a tree canopy coverage of a minimum of 20%.

And then finally, outdoor lighting is limited to zero foot candles within 150 feet of a residential district and a max height of 20 feet, including the wall fixtures.

Now you'll note there I underline the word district.

That's because you might remember in the last legislative session, SB 840 was passed, which allows for multifamily development in commercially zoned and light industrial zone districts.

So this rule right now would not apply to those because it's based on district.

This is going to be one of our recommendations that we capture that and change that moving forward.

So getting to what zoning amendments do we recommend adopting.

Number one, we have a great definition of data center, but we are not explicit in that a data center does not include cryptocurrency mining or think of Bitcoin mining as a primary use.

So our recommendation is that we take the steps to define cryptocurrency mining separately, that we list it on our non-residential use table, but not allow it in any district, and then furthermore adopt supplemental standards that effectively together would prohibit cryptocurrency mining as a primary use in the city of Fort Worth.

And then second, we propose that we establish data center development data center specific development standards.

So this list right here of our recommendations is to establish a building setback of 250 feet from all residential districts and uses.

We would still allow parking and driveways within that supplemental building setback, which is very common and standard today because there's no above grade improvements.

We recommend prohibiting standby generators to be within 300 feet of residential property and to require them to be fully screened.

So that would mean a wall that is taller than your generator, standby generators.

We recommend requiring rooftop cooling equipment to be located behind an acoustic barrier that is at least one and a half times the height of the cooling equipment.

Extending our outdoor lighting regulations to residential use as well as district, adopting a landscape buffer yard of 50 feet, as well as the screening fence along all residential properties.

So where that data center is adjoining to residential, and finally requiring a continuous row of evergreen trees at the site perimeter adjoining residential.

And I'll note here the reason that we put evergreen trees instead of any other type or just selecting from the list within our urban forestry ordinance.

It's because in the winter evergreen trees don't lose their foliage.

So it would keep that screening for both visual and noise all year long.

Any questions on zoning and development regulations?

Okay, we'll keep moving.

So for noise regulations, before I talk about what our recommendations are, I want to help you visualize what are we really talking about.

So this is a noise scale, and this was actually borrowed from our police department update that they gave to y'all quite a while back when they were talking about updating the noise ordinance.

So this is just to help you understand when we're talking about decibel limits, kind of what those different sounds, what the examples of those sounds may be.

I'm going to focus for the sake of this presentation moving forward just to really hone in on the middle where you see 70 dBA on top, 60 dBA at night, I'm sorry, on the bottom, and 80 dBA.

So for our residential areas, we do have a maximum sound level established by ordinance that allows daytime sound levels up to 70 decibels and nighttime sound levels to 60 decibels again in residential areas.

In our non residential areas, except industrial districts, there is a max daytime sound level of 80 decibels and a nighttime sound level of 70 decibels.

So some examples of that 70 decibel mark, I've call it kind of your common, a dog barking that's up to 50 feet away, a clothes washing machine if you're standing within two feet of it.

That's about what that sound level would be.

A vacuum cleaner five feet away is going to get to your 80 decibels, a little bit more a concrete mixer that's up to 50 feet away.

So here we're covering both our current noise regulations on the left and our proposed noise regulations on the right.

Currently today, industrial districts are exempt from a maximum sound level.

So that means a data center development coming in is exempt from a maximum sound level.

We are hearing a lot of concerns about what the impact of the sound coming off the data centers and those standby generators when they do have to run.

So we are proposing that we establish some noise regulations that would apply to data centers.

So on the right hand side, you'll see our proposal is within 250 feet of a residential property.

We propose to require a 72-hour pre-development ambient noise study, the purpose of which is to tell us what is that baseline level of noise before any data center is developed there.

And then we would propose number two to establish that maximum sound level to not exceed five decibels above that predetermined noise level based on that study.

I will tell y'all two things to note.

This is really following what we did with the gas well drilling ordinance that we found to be successful.

So this is very similar to that, nearly identical.

The one other caveat that I will note is while I've got the five decibels in here, we have reached out to several data center operators just to make sure that that five is actually a reasonable number.

So far, I'm hearing good feedback, but that's just one thing I want to share with you that we may determine maybe that needs to be seven, maybe it needs to be eight.

We don't know what we think so far.

What we're hearing is it likely five is okay.

We would also require mitigation measures.

So post-construction, if a data center is operating and they exceed their maximum sound level, we would require them to take whatever mitigation measures their engineer determines to be appropriate, and they would have to put those in place at their expense.

Lastly, we want to restrict the standby generator testing schedule to be only during the weekdays between 8 a.m.

and 5 p.m.

Now I'll note that I've learned that TCEQ actually regulates typically the testing schedule for each site, and that usually would, in fact, almost always fall within that weekday schedule of eight to five, but this just gives us some guardrails as well to say it can only be during this time.

We would have an exemption though for emergency operations.

So again, if power is not available to a data center side, or if the state, the PUC, demands that a future data center shed its load, take it offline in the case of an emergency, they have to operate on their backup generators.

So at that time only it would be exempt from the noise ordinance.

But I will also note that TCEQ limits the amount of hours per year that these standby generators can run.

So this is not something that we should expect to happen very often.

It's a very limited time.

Alright, let's jump into the water utility requirements.

So to set the stage, it's first really important to note that we get all of our raw water from Tent Regional Water District.

We are not TRWD's only customer.

We are one of many, although we do account for the largest share of water that TRWD supplies.

So we currently account for 60% of TRWD's water supply.

This is this map shown on here is Tent Regional Water District's service area.

And so the key thing that I want you to keep in the back of your mind as we go forward and talking about our water supply and our proposed recommendations related to water policy is that any development within this service area is pulling from the same water resources that we are.

But again, we only have authority within our city limits.

But I'll talk a little bit more about the caveat in just a minute.

So think about you know, there's data centers again that are looking in other parts of this service area.

A data center in Ellis County is no different in terms of water usage than a data center here in the city of Fort Worth.

So a benefit to regulating them and actually having these types of developments in the city of Fort Worth is that we can regulate the amount of water.

It's also really important to note our service area.

So this map here shows our service area.

It's also called a certificate of convenience and necessity or CCN.

That service area is approved by the Public Utility Commission, and you'll note that the yellow shading goes a little bit outside of our city limits in certain areas.

That's where we have acquired the CCN.

It's been granted to us in certain parts of the city that are currently covering our ETJ.

So again, any development that happens even outside of our city limits, if it's in our service area, we're still going to have to provide it water, even if not inside our city limits.

It's really important to note, and you'll see the keyword on this slide: obligation.

With our CCN, we are obligated to serve all development that comes to us in this area so long as we have the availability of water and we have the ability to serve through our water treatment plants or through our pipeline.

Currently, today, we in the City of Fort Worth are very fortunate.

We have ample supply.

We do currently have a little bit of an infrastructure limitation, and that is affecting mostly north and northwest Fort Worth.

But council, you've heard a lot about that.

We have some plant expansion projects, and we have very large pipelines, that Northside pipeline that's under construction right now, that will address our current limitation on supplying water, treated water to customers in that area.

When we have an infrastructure limitation, that limitation is really temporary.

The minute we have addressed it, we've completed our construction projects, then any of those pending development projects that were waiting on our infrastructure improvements, they can then move forward and come online.

So the only way we can say no to a development or no to providing water is if we didn't have the supply, which we do, or if we didn't have the ability to serve and treat through our plant, which we are remedying as we move forward.

In general, again, not for data centers, that's just for development in general.

So thinking about our water supply, again, we hear a lot of concerns, and there are other parts of Texas that have a very real shortage of water, a very real issue where they do not have the availability of water.

Terrent Regional Water District again is the responsible entity for supplying the water.

We are the responsible entity for treating and distributing that water.

TRWD though has done a great job over many years of planning well in advance and executing projects to ensure that we have the water we need in this in this region.

We have a priority contract with TRWD that we share with the cities of Arlington, Mansfield, and Trinity River Authority, and that means in all of TRWD's service area, our water needs come first.

Whatever we need, we have that priority right to get.

The state water plan, which I touched on just a second ago, talking about the role of the Texas Water Development Board.

That state water plan works hand in hand with Terrant Regional Water District and looking at our region, which we're Region C to look at what are the water demands today, what are the projected water demands in the future, what is the availability of water today as opposed to what is needed in the future, and then it prepares a list of projects that are needed in order to ensure that we have that water resource availability.

This last box here on the right is looking at the water supply strategies that TRWD is undertaking to ensure that we've got water in the future as well.

Currently under construction is a 2.3 billion dollar integrated pipeline project that is moving water from three lakes in East Texas into our region to supply our needs.

In addition, TRWD is already designing some indirect reuse projects that will pull water from the Mary's Creek and Cedar Creek Reservoir.

We anticipate construction to start on those within the next five years.

And TRWD doesn't stop there, they're already looking to what's next.

What is the next slate of projects that are going to be needed in the future?

Now we're going to shift to what is the city of Fort Worth's role.

So how do we look at all development?

This slide here again is not specific to data centers.

This is truly how do we look at any development that is coming and proposing to be constructed in the city of Fort Worth.

We look at every development through a critical lens.

Every development is required to provide a water loading study, and that study is prepared by developers engineer.

That study is built on the requirements within our design criteria manual for the water utility, as well as based on what that development may need specifically above and beyond our design criteria manual.

The water loading study is going to tell us what is the demand needed.

So what is the total amount of water that that particular development needs?

It's going to tell us what is the potential impact on our water system.

So the impact on the plant, the impact on our pipeline infrastructure.

It's going to tell us that there are any needed off-site improvements.

Again, think of pipelines in order to serve that potential development.

And the developers responsible for paying 100% cost of the off-site infrastructure that's needed.

The only time the City of Fort Worth may contribute financially is if we want to oversize a pipeline, and we do that in accordance with our policy, and we do that in order to build the full construction pipeline that we're going to need in the future to serve other land around that area.

But council, you might remember we typically recoup that through connection charges that are set by ordnance by you.

All development also, oh, I missed the meter tap, probably one of the most important parts on here.

Based on the water loading study that is provided to us, we cap the meter and the tap size based on the actual needed volume of water that's in that study.

So in other words, you can't come and propose a development and tell us we're going to use very little water, but I need a four-inch water meter or I need a five-inch meter.

That's not how it works.

So most of the, in fact, all of the data center developments that we've seen so far that are proposed, looking at their water loading studies that have been submitted over the last 12 months, they're all proposing to go to a closely water cooling system, which I'm going to talk a little bit more about in a second, which uses a lot less water, and all of those have shown us that they can be served off of a two-inch domestic meter.

That in and of itself has a natural cap on the amount of water that can go to that site.

And then all developments pay their water and wastewater impact fees.

These fees are used to offset the region cost or the plant infrastructure, if you will.

And then lastly, they pay the connection charges.

So again, if by ordinance, if we've oversized a pipeline or we have done some other investment ahead of development, then council, you adopt an ordinance that determines a connection charge, and any development that comes online then later pays that based on their water loading studies, so based on the amount of water that they tell us they're going to need and that allocation from the pipeline.

So now let's get to a comparison where we're talking about what kind of water are we actually talking about.

I have read so many articles and studies and seen number after number.

And I will tell you, I'm not an engineer.

There's no way I can determine which one is accurate and which one is not.

What I can tell you is that again, we have four existing data centers.

So we have some degree, not some degree we have, real knowledge of the water consumption that we've seen so far.

We've also been reviewing water loading studies that have been submitted to us over the last 12 months, so seeing what those engineers are showing us.

So we do have some reasonable comfort when we're putting forward this general comparison of water consumption, and we're trying to just give a visual frame of reference of what does it really look like.

So for the sake of an example, and know that there are a ton of assumptions that go into this, and the other caveat I'll say is there are there's so much variability in water consumption per data center.

It depends on the site conditions, it depends on how the building is constructed, it depends on the type of technology that they're trying to cool and what is that target temperature on the cooling system.

There's a lot of variability in here.

So these are just generalized assumptions.

If we look at developing a 100-acre tract of land, and we look at it from two different frames of mind, we look at developing it as a data center on the left, or we look at developing it as a single family residential on the right.

This is just to give you an idea of the comparison of water consumption for each type of development.

So on the right, this is the easiest one to calculate and think about.

100-acre tract of land can accommodate anywhere from 250 to 350 homes.

Truly, it can accommodate even more, but for the sake of easy numbers, we're gonna go with that.

So the two million gallons here average monthly consumption that you see, that is assuming 300 single family homes, which use an average of 7,000 gallons per month that comes out to 2.1 million gallons of water average used per month.

If we look at developing it as a data center, I want to go to the bottom number first.

So this evaporative cooling.

Evaporative cooling is kind of the it's the old technology, it is what we have seen the most of, and there is no doubt it is a more water-intensive use.

On evaporative cooling, again, based on what we kind of see and normalizing it for the hundred acres, it's safe to say that that type of cooling uses around four to six million gallons of average monthly water.

Now, again, there may be months where that usage number is higher.

In the summer, you're gonna take more to try to cool it.

In the winter, it may be much lower because it doesn't take as much.

A lot of variability, but just averaging out over the year.

If we look at a closed loop system, which is the new industry standard and what most developments are going to, what we are seeing prevalent, it really minimizes the use of water to a lot less.

And really, what I'm hearing is for the most part, that closed loop water cooling system is not typically using domestic water, city water, it's using a specialized mixture that is trucked in because it's a mixture of both water and a cooling chemical.

So the best analogy that I've been given is trying to understand what a closed loop cooling system is, is your air conditioning system in your car.

You do an initial charge into that air conditioning system of Freon, and that system is closed.

So every time you turn your air conditioner on, that Freon circulates round and round and round, and it keeps your car cool.

Now, if you develop a slow leak, if something else happens, you may from time to time have to top it off.

You're gonna fill that system up.

If there is a leak, you're gonna do the repair, whatever is needed, and you're back up and running again.

These types of data centers that are going on the closed loop cooling, what we are predominantly seeing, and again, we don't have one yet today, so I am going based off of the studies that have been submitted to us, and our consultations with real operators, is that they do the charge with this specialized cooling solution, and so the water needs going to that site is really typically limited to the needs of employees.

So at that point, it's going to be what is the water needed to flush the toilets, what is the water needed to run sinks, to run kitchens, to irrigate the lawn and the landscape requirements that we have.

It's those kinds of uses.

And so we've seen a range projections of anywhere from 300,000 gallons per month up to a million gallons per month, and again, so much variability, all dependent on that specific design criteria and how it's developed.

And just for frame of reference, I wanted to share this with you.

This this bottom number, I don't think I said it earlier, and so I want to say this now.

The city of Fort Worth is a regional water supplier.

So we not only treat and produce water for our city limits, we treat and produce for 33 wholesale customers, of which 28 of those are other cities in this area.

So this number in the bold in the blue box that you see there, it's a very large number.

We are treating and producing approximately 6.5 billion gallons of water average per month.

Again, that's because we are supplying the needs of 28 other cities, five additional wholesale customers in addition to the city of Fort Worth.

So when we are looking at these proposed data center developments that are looking to come online in the future, and we see the closed loop cooling technology utilized, minimizing water, this really is, you know, just to put it in relative perspective, a very small amount of water that we're treating.

Okay, moving to wastewater requirements.

So under our wastewater permit through TCEQ, we have the authority to regulate and have permit requirements.

One of the options that we already have today is to require a pre-treatment, wastewater pre-treatment permit as a non-significant industrial user.

We have not historically done this.

Again, we have four, three of which were constructed a very long time ago.

So this just hasn't risen up to something that we have felt the need to do.

But after hearing a lot of the questions and the concerns from the constituents that have come through zoning hearings and reached out to council and reached out to our staff, we feel like this is a great thing that we already have the ability to do today, which is to require that all data center developments obtain this wastewater pre-treatment permit and be classified as a non-significant industrial user.

It that permit would address all the things that you see listed on here.

But the biggest takeaway or the benefit to this is that it would give us a permit, an enforceable permit on what is being discharged into our wastewater system.

So it would give us a lot more insight into any potential chemicals that would be coming into the system.

What is the spill prevention plan?

What is the action plan?

It gives us the monitoring and oversight abilities, and then most importantly, again, enforcement.

So if we see a notable change or we see something that we don't allow that breaks the permit limits, then we have an enforcement policy.

We have a tiered enforcement policy that we would follow.

And that starts with giving a notice of violation and a time period to cure.

We can elevate that to fines.

If somebody still is not addressing whatever that permit violation is, we have the ability to disconnect water in an absolute nuclear situation, which my understanding is we don't really do because we don't ever have anybody that gets to this point, but we could even cap the sewer line.

So you can't discharge into our wastewater system.

So this is just a really great tool that I think addresses a lot of the questions and concerns that we've heard from constituents that we can do.

So wrapping up our water recommendations, we are recommendations to move forward with amendments is number one, we recommend that we move forward with adopting our updated installation policy and design criteria for the water and wastewater system.

This is a policy and design criteria manual that we have updated.

We did actually several years ago.

The reason we haven't moved it forward yet is that we've been trying to bring forward all of our design criteria manuals that affect development regulations at one time.

But based on this conversation, we really feel let's go ahead and bring this one forward.

It does a number of things, so this is not all it would do.

There's a lot in there, but the two data center-specific things that we can add to that updated policy and we adopt is number one to mandate a closed loop water cooling system.

So again, minimizing the amount of water that's needed to serve a development.

We are seeing most cities that are adopting regulations right now on data centers, most are going towards requiring a closed loop cooling system.

And the one thing I'll note again, technology changes.

So if something comes along that's even better in the future, we can always update to that as well.

This is the best industry standard right now, and so we we recommend that we require that.

And then, second, just formalizing that we would require a data center to obtain the wastewater pretreatment permit.

We already have the authority to, so it's not new, but it would be the clear requirement that we would apply that to all data centers.

Moving into our last section, let's talk about economic development.

Whoops, too far.

So most of the items on this list, everything except for the ERCOT approval that you see on this bulleted list is what our economic development department looks at on every potential project that comes to their office.

They are evaluating the site appropriateness.

So if you're bringing us a proposed project of any kind, whether it's manufacturing, processing, aerospace, data center, anything.

They're gonna look at the parcel, the identified parcel of where the development wants to go.

What is the zoning?

Is that appropriate?

What are the surrounding uses?

What is the infrastructure capacity to that site?

What is the infrastructure that may be needed?

They're going to look at are there truly site alternatives that we are in competition for?

Typically, these site alternatives are outside of the state of Texas, but sometimes we might even be competing for a site here in Texas.

But we want to make sure that we are truly in competition before we're going to consider incentivizing a development.

We look at the company track record and their financial capacity.

Is the company, you know, can they really execute on what they're telling us they're going to deliver?

We're going to look at the project scale.

Our policy, our economic development policy that you approve, is set on investment minimums.

So every incentive program that we bring forward has to meet our policy investment minimum.

And typically there's other requirements such as job creation, business personal property values, et cetera.

This is one that really is tailored more to data centers or anything that's going to require a very large electric load.

We do, again, under SB6, there's a lot of new requirements, and there's rules that are in development right now that we just don't yet know.

But we want to make sure that any development that we're going to expend some energy on on considering incentives, that they really can get the power and connect to the grid in order to serve their site.

And then lastly, we look at the necessity of those incentives, especially if they're needed to address site-specific issues or a competitive disadvantage.

So an example that I might give you of that is we've got a development that's coming in.

They're gonna have to build a roadway.

That's standard.

All developers build their rough proportional share of the roadways.

But maybe instead of just a roadway, maybe it has to be a bridge.

Maybe there's something that is just excessive above and beyond the normal.

And so that might be an area where we want to consider doing an incentive to offset that infrastructure need.

All of those things that were listed on that prior slide are what we do today, those are already in practice, but they are not formally set out in our policy.

So to make it very clear, we would recommend that we bring back our economic development policy and we would amend it to establish all of these rules to be very clear for data center developments.

So again, demonstrating multiple sites under consideration, demonstrating significant local value, that there's clear project improvements above and beyond our standards, a really good development, demonstrating that there is substantial progress through the ERCOT interconnection process, and that is a very long process.

It is not quick and easy to get through that.

And then here's the most important part.

We recommend that tied two data centers that we significantly increase our policy investment minimums.

So currently today, we call out in our policy a data center as a mega project, there's a line item for it, and that would require a minimum investment of 50 million dollars.

Our recommendation is you can see here is that we significantly bump that number up to a 500 million dollar investment minimum.

We also think it's really important, we've learned a lot over the last year with interest in this industry.

We think it's really important that we require by policy an identified end user.

So in other words, you have to tell us who's really going to go there.

We're not going to incentivize a speculative development that doesn't know yet who's going to be operating at that site.

In order to ensure that there is continued investment in the facility long after the initial build, we would require a minimum business personal property value to be made, maintained throughout the life of the incentive agreement.

And I will tell you, most data centers they do aggressively reinvest in their facilities.

Again, servers, technology, it changes so rapidly that really within three to five years is typically what I'm hearing for that refresh in the infrastructure, and this would just require that value to be maintained.

Lastly, we would recommend that we limit or cap the amount of the grant or a tax abatement to no more than 50% of that tax revenue.

Currently, under our policy today, under that mega, it's capped at 85%.

So this would bring that threshold down just a little bit.

So giving you a lot, yes, ma'am.

I have a list of questions, but I just want to get clarification on that.

So, right, the proposal is that it would be no more than 50%.

Correct.

Currently, it's no more than 85%.

Correct.

Now, the one caveat I want to put on, and and I should touch on this, kind of you see in the big brown bold at the top.

Every incentive that we do is case by case.

So while our policy sets minimums and caps, you will note if you pull all of the incentives that you've approved over the last 12, 24, 36 months, it doesn't matter.

Not one is identical, and not one says, here's what our policy says, so you automatically get that.

Everything is a case-by-case evaluation.

So based on what the development tells us, based on their job creation, their investment, whatever the other things are that we're considering, is how our staff determines what to recommend to you.

So I will note, just from my own, you know what I've seen coming through to y'all, we seldom go up to that 85% threshold.

It's a cap by policy.

We seldom do that.

It's an overall cap for all incentives.

We don't have a specific category for data centers.

This would create data center specifically.

Right.

Policy.

To add on to that just a little bit more, because I know there were some questions about what our policy, and so right now, our policy is kind of broken up into I'm going to say three sections.

There's probably more, but the three that matter here.

Number one, we have our target industries.

So we have a section that is devoted to any development that is one of our target industries.

Here's a specific set of criteria and incentives that we'll consider.

It has its own individualized minimum investment, job targets, all those kinds of things and caps.

Then we have our non-target industries, which is kind of the all-else umbrella.

So something that comes to us that really we like, we want to incentivize, it makes sense, it falls under that section.

The third is where you have mega investments, and that mega is really the large dollar investments.

Most of our data centers that you've seen over the last year that have gotten their zoning, they're gonna fall into that mega category.

And that was where I was commenting.

Currently, our policy right now has the mega, but calls out data centers specifically the $50 million minimum.

And one thing to this, you know, we have some data centers that have been developed in the past, and and even you know, maybe some of those that we're hearing about, not all are these very large-scale data center developments.

So the ones that you're most familiar with right now, are talking about hundreds of millions of dollars in investment, even potentially billion.

There are others that may come in that are those very small, you know, I'll call it a pocket data center.

It's not really that's not the terminology, but there are different levels of threshold.

This matters also when we're talking about the ERCOD and the electric needs.

So right now, any development that is that large load follows that large load interconnection process, but that's at 75 megawatts or more.

Anything that's below that doesn't even rise to that level of scrutiny.

So there are, you know, there's there's offshoots of everything.

Just to try to I guess get an overall understanding of the time frame required.

You alluded to that just a few minutes ago.

So the opinion, what is the total amount of estimated time that staff would need to um and our zoning ordinance, create regulations, define what our economic development uh prescriptions will be, and create this encompassing data center policy.

How long would that be?

You're teeing up my next slide.

So I'll get right there.

Summary slide, I think you've all heard it, so I won't went through it again, but there is a summary just high level again, all four areas where we are recommending amendments to our zoning ordinance, to our noise ordinance, to our water policy, and to our economic development incentive policy.

So let's jump straight into timeline.

So, Mayor Pertin Flores to answer your question.

Um, if council, if you like the recommendations that we've put forward before you, or even if you want to do some minor tweaks, make some adjustments, but you're ready to move forward and you want to fast track this and get these in place because we know that there's a lot of um interest in this type.

We can have the zoning and development standards on the July 8th zoning commission agenda.

We would need to make that call ASAP this week because we would need to draft um you know the agenda item, make sure we have it ready, and then get the notice out of that um potential case, but we can do that, and then we can have all of the amendments, everything I've presented here for you today, we can have that on your August 11th agenda to adopt.

So that's your zoning and development standards, the noise ordinance amendments, water and wastewater policy adoption, and then the economic development policy adoption.

Now, I will touch here, um, we can also add, we um we know again that there's a lot of public interest in this, and while we used a lot of the information that's been given to us, we haven't really had an opportunity to engage a lot yet.

So we can add here, and I think there's a lot of interest in this, we can do an information open house.

Um so we're looking at our calendars right now to try to figure out that date.

We would be aiming for probably end of June because a lot of people are on vacation that very early July, and we want to do it before the zoning commission meeting on July 8th.

So we are looking at the end of June to add a public information session.

I would anticipate that'd be here at City Hall.

As soon as we get a date mailed down, we can get that published, advertised, put out everywhere.

So know that we can add that step.

And then this website that you see here on the page, it is not live today.

It will be live by the end of the day.

All of this information that we've talked about today, plus more will be put on that FAQ website for everybody for the public to go see.

So, yeah, yeah.

So a couple of I have a list of um issues with the potential policy.

I'll start with I think what's the easiest one, and that's the economic incentives.

Um, we're the tenth largest city, and we shouldn't be behaving like a pick me girl.

Um, these are not desirable um land uses.

I think we've seen that.

I think what makes them desirable is their tax base.

Um, so by giving that up to to get them, I think is a ridiculous policy.

Um, if they want to come to Fort Worth, if they're so needed, then they'll come.

And if they're so needed and they need an incentive, they can go somewhere else.

And that's just these are billion dollar um businesses, they're not just putting data centers in Fort Worth.

These are companies that are putting data centers in all over GFW and Texas, and we've seen that with one that we're dealing with now.

Um, and so I just don't think that it's good city policy to provide economic incentives to these organizations.

Okay.

Um, so right off the bat.

First question is um can we cap the size of these data centers?

I've by and large, what I have heard is this concern of these mega data centers.

Um you saw what happened in Utah, and you've seen uh if you've driven out to Abilene, you see what's on the side of the freeway there.

I mean, these are massive, massive buildings.

Um we talked about annexation, but the truth is is um our land is finite, um, and it's not good policy to continue to annex uh farther and farther out.

I think we we know that every time we talk about a bond.

Um, and so I'd like to see if legally there's a way that we can cap uh the size of these so that we're not taking up all of our usable land for no jobs.

Sure.

So I've talked to um city attorney's office a little bit loosely on that, and I'm gonna let them answer it.

So let's get a more detailed answer.

We can either come back.

But one of the things to think about through zoning, so we regulate you know the amount of land that you can build on by requiring open space and landscape and buffers and having setbacks and that kind of thing.

It's my understanding that no, we cannot just adopt an arbitrary cap on the building size.

Now the building code itself may have some limitations on a single structure, but as long as um uh a property owner owns an amount of land and they comply with all of our zoning standards, setback landscaping, et cetera, then I don't think we have the ability to cap um the size of the structure itself outside of the building code.

Now, we've seen um not related to this, but just in my past, you know, I've seen cities that adopt a max lot coverage.

I'm looking to Dana because I don't think we do that today.

I'm gonna, she's only in single family.

So again, I you know, and I'm not, I'll be honest, I don't see that in any other city ordinances that I've researched so far on um industrial either.

So I'm gonna go out on a limb and say I don't think we can, but we'll get a better answer for you.

Thank you.

And then my um I've got two just general concerns, and they both um relate to enforcement on the back end of this particular uh recommendations.

The first one is the noise ordinance or the noise regulation.

If we're completely honest with ourselves as a city, one of the things we are the worst at is noise enforcements.

I don't know how many IRs I've asked for about how we can better separate noise.

Our police officers tell you they don't have noise readers.

We've uh we've had an IR on how many noise readers there are by division.

Um, I think that that sets uh an expectation by our residents that quite frankly we have not been in the business of enforcing before, um, and we're not doing it when it's people on the streets or, you know, um uh bars and businesses.

I can't see us all of a sudden having an epiphany and doing it for these data centers.

And so um I appreciate that being put in there, but I'm gonna need to see um I'm gonna need to see how we're actually gonna enforce that because it seems unreasonable.

Um, it just given the enforcement that we've seen with noise in the city on other issues.

And then the second um concern again to enforcement is um we have the prohibition against Bitcoin, and it's my understanding because Bitcoin mining doesn't um meet all of these noise and water and everything else that we're putting forward.

So as the why we're prohibiting it.

Um what happens if um one, we have to know the end user, and we don't always know the end user at a zoning change, and end users change.

So, what happens when we grant a zoning change or say we don't?

Say it just it is by right they're allowed to come in because they're not Bitcoin, then they sell, and now they are Bitcoin.

How do we get them out?

Yeah.

So um, so good question.

So under uh Texas local government code, we do have the ability to prohibit that type of a use through our zoning authority.

So we do have that authority to do that.

And then just to the enforcement piece, I mean, it would follow any like our standard enforcement policy.

Anytime you have a use that sets up shop where it is not legally allowed to go based on the zoning ordinance, then there's it follows that typical city enforcement, which to be fair is a process, follows state law for what is necessary in order to enforce it as a zoning violation.

So we'll we'll produce some more information though, 41.

Yeah.

Would the solution be that these data centers need to be conditional use permits so that we can conditional use permits tied to the end user, correct?

Can they be?

No.

That's the end user.

So there's no way to yeah.

So then there's no, I mean, what's enforcement?

A fine a day?

I mean, that's the same we've seen with the noise ordinance, right?

I've got a a bar that just pays the fine.

It's their cost of doing business.

Yeah.

And so that's what's gonna happen to these data centers who make way more money than bars.

It's gonna become the cost of doing business, and same for crypto mining, right?

Yeah.

How do we find?

Definitely?

I totally understand that.

I had a thought and then it escaped me.

Just like that.

What were you saying a second ago?

Oh, conditional use permit.

Let me touch on that.

We did actually, we thought about whether or not we should do a conditional use permit.

Um, one of the biggest reasons that we do not recommend it is it's typically tied to a time limit.

And when you're talking any of these developments, there's there's nobody who's going to make this level of investment to not have the guarantee that it's going to be able to continue operating.

So it just didn't um it didn't fit with our zoning code and really what we felt like was a good practice.

But we did evaluate it.

We've we've looked at so many different options as we've worked through this.

Thank you.

Counselor Hill.

Um going back to the economic development piece, Jessica.

Talk a little about it.

Did y'all have have any opinion from the Fort Worth Economic Development Partnership on the structure?

Absolutely.

So we did review this with Robert Allen at the EDP for his input.

Very supportive of the recommendations that we've put for you.

Also, you know, understands if this is something that the council doesn't want to see in there.

I'll tell you from a staff's perspective, the strong reason that we did leave it in here and really bumped up that minimum threshold so high is because we do it on a case-by-case basis.

We wanted to preserve the ability for council to determine if there is an appropriate project.

At this level, there may never be an appropriate project.

You may choose to never approve one, but we haven't prohibited or taken away the opportunity was our kind of thought as we approached this.

Thank you.

Then I have one more question going back to the data centers and property tax revenue slide.

I think it's maybe slide 10.

And Brady is gonna be real mad at me.

Okay, so that 83 million dollar number, that's just gross property tax revenue for the data centers that we know, correct?

Okay, and then in 2024, that well that I guess it's the house numbers that we have.

Equivalent, okay.

So I guess my question is have we ever modeled, and Brady, this is a question for you.

Have we ever modeled the cost of providing infrastructure for those houses versus a data center which has little infrastructure?

I'm thinking more of like the the strain on police and fire and the amount of traffic and all the other things that go into building out neighborhoods that would meet that tax base.

Just saying maybe you washed my face processing as I was listening to Jess.

She said maybe in the fiscal impact analysis, but that's not something that my team has worked on.

I don't think that specific project will look into it though.

Okay, I'd be curious to see what the value is on both sides.

Okay.

We we modeled it years ago, it had to be updated on the on the that was maybe 2017, and back then the average home had to be 340,000 for it to pay over the cost of providing all city services, coming online, but that would have to be updated now.

Thank you.

What else?

So let me touch on the timeline real quick.

Um so y'all have received, you know, a lot of um emails and asks um urging you to adopt a moratorium to give you time to consider these uh to consider what development regulations you should have for a data center.

And I want to just reiterate that is a tool that is afforded to you under state law.

It's a tool that allows you time to um have a temporary pause on development in order to determine what your development regulation should be.

You cannot use it to just determine we don't want data centers in general, and we're gonna prohibit that use.

The other thing to note is a limitation on the moratorium is it would not apply to anything that has vested rights.

So, in other words, those data centers that I showed on that previous slide that are already proposed, they already have their zoning, we've seen site plans, they're reasonably anticipated to move forward at whatever timeline, they are not subject to the moratorium, and so they move forward regardless.

The other just limitation that um I want to share with you about doing a moratorium is that in 2025, the state legislature amended chapter 212 of the local government code to establish um more requirements around the public notice, the public hearing, and the ordinance readings that are required in order to enact a moratorium.

So, based on the state's requirements, it's a very prescriptive schedule, very strict schedule.

The soonest date that you could call that moratorium is going to be October 27th, so end of October.

Again, it's intended to be 90 days, so it would expire at the end of January.

It does buy you time, but we would be open for a little bit of risk between now and that date that you're actually calling it in October.

So, from my perspective from our team's perspective, is you know, if we like these recommendations again, even if we need to make adjustments to what we bring forward to you, we just feel really confident in let's take action.

Let's go ahead and get there.

Let's be the leader.

Let's hopefully set up a model that other cities can also look at.

And again, we can have all of this to you for consideration and approval on August 11th, well before you can even enact a moratorium.

But you do have that tool available to you if that is something that you want to pursue.

Council Martinez.

Um Jess, so I just wanted uh to share that I really think that we need to have another uh community engagement option.

Um maybe that could look like a general inbox in that data center web page.

Just you know, I just there's gonna be a lot of interest in here.

Absolutely.

Uh can't attend, or they can watch right, this might be recorded and they oh yeah, other date, but they should have a method to be able to submit their feedback.

Um, you talked about the different um, you know, how data centers come in different sizes, and this is more for those mega centers.

So, what remind me what the threshold is on those that would um data centers that would fall under this ordinance?

Do we have everything?

Everything.

So I'm asking because I know smaller data centers, and so I'm not even sure those even require a water cooling system.

Yeah, no, that's a great question, and I and I couldn't answer that today.

Um we'll take a look at that.

We've seen again, we have been reading every Texas City ordinance that has been changed over the last couple years, and prior to just recently, there weren't many cities that even had ordinances specific to data centers, or if they were, it was limited to it's required an industrial.

That's pretty kind of the consensus.

We are seeing a number of cities that are adopting things right now, and it's all over the board, although not far from where we are as well.

Um we've seen a couple cities that differentiate on the data center size.

I've seen kind of that 10,000 square foot as being a bright line.

Our ordinance does not differentiate, but the distinction that I would make, which is probably more applicable, is that we our data center definition and all of these regulations are where that data center is the primary use.

So that is the sole purpose of that structure.

And again, we've never seen to this point, even a prospect of one that is small that is under that 10,000 square foot threshold.

Our ordinance already accounts for where and data center might be an accessory use.

So again, we the city of Fort Worth technically have a data center.

Terrant County has a 911 data center that I saw in TAD records.

You know, a lot of our corporate businesses have their own data centers.

This does not apply to those types of things.

Um, and so for that reason, we just didn't feel the need to draw a square footage.

So again, everything that you see in here would apply to all sizes, all types, um, everything that is a standalone as a primary use.

I guess I'm just asking, we might need a research because there are maybe government entities that you know do have data centers that are off-site where they might have to relocate if they're releasing the space, and it truly is a smaller scale.

Any other questions, Counselor Noodles?

And then Council More Crane, go ahead.

Yeah, I have um some comments and then maybe a question.

Um I really appreciate the presentation.

I think you kind of outlined all of the things we have been hearing within the community, which is noise zoning.

Do we have enough water and even the economic development uh economic incentive process?

Uh, one of the things I I didn't hear talked about today that may not be an issue, I want to ask a question, and maybe we can talk about it later date, is uh environmental uh effects on um the community.

With the four data centers that we have, and you alluded to there have not been major complaints on NORS or any issues, because I don't think people realize we actually have four.

And so can you kind of maybe kind of give a little absolutely so um so the environmental I'm gonna bring back to you because I'm gonna bring the experts with our team to address that a little bit more and and just the one caveat again that I mentioned is we do have a local air quality program that that we operate for TCEQ, but we are very limited to just their rules, so we can't go above and beyond.

So um, so as part of our research and trying to understand what we already have here um a lot of our staff members and I have gone to each one of our four data centers personally I've gone in both daytime hours and nighttime hours I even bought a decibel meter because I wanted to understand what is that real impact of sound.

And there is no doubt that there are bad actors everywhere.

We are very fortunate so far that all four of the data centers that we have here are great examples of really good development.

Two of them are adjacent to residential they are separated by a roadway but they are adjacent to residential again we have zero complaint history and those have been long operating all of them have really beautiful landscaping they have the buffers they have trees they have shrubs they follow the lighting standards all of those four data centers developments follow our standards and they are I'm I'm not let me say this I am not trying to have an opinion one way or the other my job is public policy and it is to guide you and put forth some recommendations but what I will tell you is the four that we have today that I've gone by they really are great examples of development that we want to see in Fort Worth.

And so um and I think we have been around this table on numerous different issues we was here for the car wash issue uh we were here for uh a number of other things and and what we're seeing today is that there have been some issues with data centers absolutely in other states and absolutely around the country and they are revamping to try to make sure those issues are mitigated and I can see within your presentation today that we're trying to do everything we can to make sure what comes to forward um that we have some type of control over it and so uh with you know we have some that's in the process of being coming I think another four that's coming even that's already a zone for waiting on site plan.

Um how can I know we cannot go backwards to get them a to condense to what we have in policy if we put it in play in August but how hopeful are we to work with those to make sure they kind of align with what we're gonna put forward great question so it's no doubt under state law anything that's already in progress that's already shown us a site plan or has their zoning in place any of these rules that we adopt cannot the zoning rules the noise would still apply the water would still apply everything else the the zoning rules would not retroactively apply to those developments however um I do feel a large degree of confidence that those um developers are going to want to comply with this you know as an example um black mountain who does have a a zoning case on the docket for June 23rd and you know I asked them about this proposed 250 foot setback again I can't mandate that they comply with it but would they and they pointed out that yes actually their site plan that they've already turned in exceeds that 250 foot setback.

So even some of the other regulations that were proposed I'm very I I do feel confident without having the ability to say that I can mandate it that they others would be willing to do the same.

I will note though we are pulling all of the site plans that we've seen so far on the proposed and site plans are concepts so they can change it between now and pulling their permit again as long as whatever they turn in meets our zoning guidelines and development standards.

But we are pulling all of those to see what have they proposed so far are they potentially already in compliance and we just didn't even realize it so we're taking a look at that.

Yeah I like what I see here and I I will um agree with Councilman Beck about regulations on the sound how can we really make sure that is in force and then also with council member uh Janae Martinez about getting the public engagement that's for two reasons one to hear from them again but secondly also to outline what we are doing here at the city of Fort Worth to answer all those concerns.

Thank you so much for the presentation thank you.

Councilmember Crane thank you mayor um thank you just to um I from the conversation I've had and all the information I see you put up there.

Y'all done a lot of homework.

You uh it feels like every city department has been involved in some way, shape, or form.

So I want to thank them as well uh for putting this out there.

You've answered a lot of the questions I had, had tons of questions.

My colleagues have asked really good questions and pointed out some things already, you know, why Texas, why these are coming to Texas, the property tax piece of it, uh jobs, wages, the setbacks, crypto mining, the difference there, water uses, the other uh environmental permits that are required, the noise standards, uh the generation uh generators, what the city can and can't control, uh, what other Texas cities are doing, the incentive guardrails, cryptocurrency, the crypto mining, the difference between that.

My question too, because this this my question really for you is you you touched on it, but I think it's worth noting that uh, especially the district three, the west part of Fort Worth, you've got a lot of ETJ, it's in other parts too.

You got it on six, you got it in 10.

But I want to reiterate, um, we have the ability to do uh a lot of good things here, but some of these could still develop out on our peripheries if we don't act in some way and encourage them to uh so tell us again the negatives if we say just say no.

Yeah, the negatives.

I mean, so again, if it develops within our water CCN, we are obligated to serve it water anyway.

And so it would fall under our water.

But we have to we have to give it water, we have to give it water.

Um, yeah, no, you can't deny it.

Okay, correct.

The only way we could deny it is if we physically do not have the water available, or we physically cannot treat that volume through the plant or something like that.

Uh, but come by 2028, we don't have that limitation.

Um, anything in our CCN would fall within our water policy if it's served by us.

So we'll note that.

But anything just outside of that service area that is in Terrant Regional Water District service area, it we would have no say in the regulation on it, but it is going to pull from the same raw water resources that we are, and we don't get to put a cap on it.

Um, so we feel strongly about being the leader in requiring closed loop within this area.

And then one thing I'll note because Chris Harder has told it to me multiple times, and I just forgot to say it, but I think it's an important point.

With the adoption of this updated policy and the requirement to use closed loop and even requiring that wastewater treatment permit, we would strongly recommend that our wholesale customers adopt that same um rule so that actually would protect an even larger area by by us requiring that.

Great.

Um, I agree with uh colleagues that said we need uh robust.

I know you've already talked to some of the groups that that are out there.

Uh residents, I would uh over the next few weeks as as much as we can a robust, you know, resident public engagement as part of this, just to make sure that we've answered all the questions that we can, and there's a really good understanding, you know.

For what I see, what's happening across the state, and Fort Worth is really leading the efforts here.

And I'm proud of y'all as staff.

You know, we're requiring it looks like from these regulations that y'all suggested best practices at the same time working to protect our neighborhoods and our residents.

So I'm proud of that.

I think we also just need to make sure that that robust public engagement um uh quells the fears as best as possible that people have about these and answers or questions and make sure that we understand fully what's happening.

Said this, we've got one chance to get this right.

Um, and so tight policy will help us do that.

Um, and moving quickly will help us do that.

And I understand the limitations we have on a potential moratorium.

I know counties have done it, and there's a risk for the state.

It sounds like lawsuits already, that they don't have that authority.

It sounds like our authority for a moratorium is limited in the notice that we have to give to citizens, which pushes to late October by uh January, the legislature will go back into session.

And from the conversations I've had with our state legislators, this is topic number one in this next legislative session.

So I think we have the ability to lead here and put a good model together that other cities could model too.

And so I I commend you for that.

And I think overall, I just want to make this point.

You know, our goal is not to approve every single data center that comes to Fort Worth.

Um, our goal's goal is to make sure that when development does occur, and it will occur in this region, regardless, Fort Worth residents are protected.

Fort Worth gets the tax revenue because they're going to be on our infrastructure and everything else, and our neighborhoods are not sacrificed for the sake of the deal.

And I think what you've proffered here gives us the ability to regulate that as best as possible.

And so I commend you on that.

Thank you, sir.

Understood on the engagement.

Got it.

Thank you.

Chris, did you have anything?

Okay.

I didn't.

Thank you.

Any other questions or comments from council?

Jess, do you have any else you need to follow up on?

No, I appreciate the questions here.

I've tracked them.

And so we have the list of the few items that we'll work to get y'all some more robust answers.

We will get our date scheduled then to have an open house.

So we'll do it an in-person open house with our staff.

And then we'll also make sure on this website that there's a way to communicate with us.

Watch this presentation, also access to everything that I've kind of covered in here.

Um, try to get all of that information out.

Okay, thank you.

Okay.

Thank you all.

I appreciate it.

And huge thank you to our teams.

They truly have done an incredible amount of work to get us to this point.

We really appreciate this.

Thank you to city staff for working so hard and to you too, Jess.

Great job.

Thank you.

Um, council, that's conclusion of our work session items.

Are there any future agenda items you want to mention to staff?

No.

With that, we're going to adjourn and then we're gonna reconvene into budget session in about five minutes.