Jan 11, 2021 Public Utilities Board on 2021-01-11 9:00 AM

Okay, it is nine o'clock. We'll call to order the public utilities board meeting for the city of Denton on Monday, January 11th, 2021. The first item on the agenda is a public comment period. And my understanding is we did not receive any white card comments. And are there any people waiting on the phone? Hi there, this is Tyler Smith. I am there are no public comments at this time. Okay, thank you, Tyler. And the next item is going into the consent agenda. Does any board member wish to pull an item from A through J? I had a question. Do I have to recuse myself from the UNT items? Do Ed and I have to recuse ourselves? I'm retired. I'm retired in a couple of weeks. Larry, Larry, could you answer? Yeah, if you're still actively engaged in employment with UNT, then yes. Okay, so do we still have a quorum? Oh, one, two, I guess we've got four. If we can count Ed, then we've got a quorum. But we'll have to pull the UNT items. I'm not voting on them. So that is a yes. I think that's it. Yes, I believe that's it. Okay. All right. So we'll pull item A. Barbara H. Anyone else? All right. Do we have a motion to approve B through G and items I and J? So moved. Second. All in favor say aye. Aye. Aye. Aye. Opposed? Close carry. Okay, item A. And it's simply because Karen needs to abstain. Do we have a motion to approve item A? Don't move. Second. All in favor say aye. Aye. And Karen? Abstain. The next item is consider the approval of the December 14th minutes. Did anyone see any problems or corrections? We need to address H. Oh, I'm sorry. We do. I'm so sorry. Thank you. Trying to be efficient, I guess too efficient. Go ahead, Barbara. I just had a question about I don't understand the piggyback option. Someone from purchasing? That was an option on the hog culling. If we have Laurie Hewell or Christine Taylor on the phone, they can address that. I see Christine Taylor's name. This is Laurie Hewell. Can you hear me? Yes. Hi. Yes. I'm the purchasing manager and piggyback just means that the vendors will allow other cities to possibly use our contract. So they're agreeing to say the City of Lewisville needed this heavy equipment rental contract. They're agreeing to allow them to be able to piggyback and use our contract and use our pricing. A little bit like cooperative purchasing? Yes. Correct. Okay. Thank you. We have a second. All in favor say aye. Aye. Opposed? Thank you, Charlie, for keeping me on track. Next item is consider the approval of December 14th, 2020 minutes. Are there any changes or corrections? Yes, Karen. I just I had a question. I know we've talked about this before, but the written agenda that we approve is pretty spare. It just says, you know, so-and-so asked a question, staff answered it. The last time I brought this up, staff said, well, the official record is the video. Makes sense because of course, the video is complete. So is there a reason that we are approving a written agenda if it's not the official agenda anyway, or the official minutes? Sorry. I'll defer to Larry. We're doing what we need to, right? That's a really good question. We've always approved written minutes and I don't think we've honestly looked into that as far as what the official record base. So I would encourage y'all to go ahead and approve the minutes that I want to get with the city's secretary and city attorney about that. Just one more question, Ed. Sorry. The reason we haven't thought about this is because the complete video hasn't really been available for all the different boards and commissions until recently. So something that is new and it's definitely a look into it. Yeah. Thanks, Larry. Good point, Karen. Yes, Ed. Oh, I was just going to say that perhaps if someone access the minutes off of the website and was looked at that, that perhaps there should be something on the minutes themselves that says for more detailed information regarding this particular discussion, please see such and such a number or a place in the video as the official record. Because I don't know, maybe a lot of people don't know that the official record is the video really. I'm sure most don't, Ed. Okay. Having that discussion, do we have a motion to approve the minutes? So moved. And a second. Thank you, Ed. All in favor say aye. Aye. Opposed. Next item, consider recommending the adoption of an ordinance of the city of Denton to declare the intent to reimburse capital program expenditures, the electric utility for 42 million 538108 flood waste for 3 million, water for 23 million 647184, wastewater 26,144,574 and the general government for 72 million 608678 with the tax preferred obligations, certificates of obligation and general obligation bonds with an aggregate minimum principal amount not to exceed 167,938544 and providing an effective date. Good morning. My name is Cassie Ogden, director of finance. Let me share my screen and I will have a brief presentation for you. So I'm here today to discuss the reimbursement ordinance. This is an annual activity that the city undertakes in order to sell our bonds for our capital program. So it is dictated by federal law that we have to issue this intent to reimburse ourselves with tax exempt bonds at a future date. This has to happen within 12 months before the end of the fiscal year. So, and this is outlined in our debt policy that council annually adopts. They just actually adopted it last week. So for water and before I get started on the projects, we do have each department director on the line. If you have project specific questions, I'll ask them to jump in. So for water projects, you can see the column for the budget we were requesting in the budget 35 million, 35.5 million for capital projects for this year. After reviewing all of the projects and going through the timeline associated with those, we are requesting 23.6 million in funding for water for this fiscal year. And if you don't question, yes, if I may, does that would I be correct in assuming that 35 minus 23 is 12 million? Is that essentially something we are funding within ourselves and not borrowing money to do? We essentially those projects may have shifted timeline. So you see, for instance, the regulatory performance upgrades, we budgeted 14 million, but we are not moving forward with that project this year. The timing may have slipped. And so we'll continue to re-budget that project in the upcoming fiscal year, if appropriate, if the department director says we do need to move that. But these are projects that we just won't be doing this fiscal year. >> Okay. What percentage of these projects are we paying for out of operations and what percentage of these projects are we borrowing? >> So these are all projects that we are borrowing. I've only listed the debt component of these projects. So there may be a revenue-funded component that is not listed here. The only listing that you see are debt. >> Okay. Thank you. >> And how many of these are under the bonding approval that the citizens approved? >> These are only water projects. So the citizen approved projects I've left off of this presentation, even though it's in the ordinance and the caption, I had to have the caption match with the ordinance. >> Okay. So the text dot ones are -- oh, those are because -- those were not citizen approved. Never mind. Okay. >> Yes. The text dot are because the water is relocating lines within the -- for the text dot projects. >> Okay. >> Any other questions on this slide? Okay. So wastewater, you can see we had several projects that were budgeted that were not moving forward with either -- they're not being debt funded or we are going to use revenue funding. And so I will continue to the next page. There's quite a long list for wastewater. And then total overall, we budgeted $32.8 million, and we are requesting debt funding for $26.1 million. So we had one project that we are moving forward with for $3 million for their fleet facility. And then electric, same with electric, we had projects that we are not moving forward with that are -- we're not moving forward with debt service. Total of $61.4 million that we budgeted, and we are requesting $42.5 million for debt funding. So you can see it's a total saving or total difference of about $37.5 million from the budget to what we're actually selling debt for. Timeline for the bond sale, we will review this with council tomorrow, then go to bond oversight committee for the geo-funded projects, which were not listed in this presentation. And then we will review all of the projects with audit finance committee before council adopts the official notice of intent and then projected to close on the bonds in June and receive the funding. >> Any other questions? Okay. Having none, do we have a motion to approve? No motion to approve? Thank you, Barbara. Do we have a second? >> I guess I'll second. >> Okay. All in favor say aye. >> Aye. >> Opposed? Okay. Carries. Thank you. >> Thank you. >> Next item is management reports. >> So, PBA members, there's a -- this is Tony Puente, executive manager of utilities. We have a couple of memos, a few memos that we had follow-ups for you. The first one being the utility sole source procurement list. Then we also provided additional information regarding the extendable commercial paper and some of the pricing that there was a question about at your last meeting. And then also finally the response to a question about buy America or American manufactured products. So we have Cassie here. We also have Christine Taylor on the phone if any member has any questions about any of those three items. >> Anybody have any questions? I know the two members that asked about the buy American are not on. So anybody else have -- yes, Ed, go ahead. >> I have a question about something on the -- this procurement list. >> First item? >> Yeah. The largest item is I assume the Wartsilla overhaul has to do with the deck. >> That's correct. >> But my question is, what are swing sets? >> So I have Terry Nolte on here. >> Capital spares. >> Okay. So Terry's telling me these are capital spares. So basically it's a replacement parts for the engine, yeah. >> That's all right. I couldn't see the guys out there playing on the swing. So I wanted to -- >> That's a good question, Ed. >> Okay. If there's no other questions, you know, we do have your future agenda items and just have a list of a couple of items that are coming up here in the next few meetings for you. The largest of that being, of course, a follow-up on the utility rates and budgets. That's just a closeout of where we ended the previous fiscal year. And then have for you as well new business action item and there's a number of items that we're still working on. The largest being the comprehensive solid waste management strategy. We are working on that and hope to have an update for you here in the next few weeks. But with that, that concludes the management section. There's a question about any of these items. >> Go ahead, Ed. >> Yeah. On my item under new business action items, discussion and pilot project on recycling and residential composting, I think that needs to -- I don't think I included recycling in this. It was just a discussion and pilot program on municipal and residential composting. So I just type over whatever, but the recycling doesn't need to be in that. And I would like to ask for a new -- a future business. I noticed in the consent agenda there was a purchase of a bulldozer for the landfill. And in the backup material for that, it said that since 2017, landfill waste has increased by more than 31%, amounting to an additional 120,000 tons per day. What I would appreciate getting information on is how much of that 31% increase is food waste. >> Yeah. I don't know if Brian's on here, but we can certainly follow up with you and get you that information. >> Thank you very much. >> Brian's on. >> Yes. Mr. Stouff, Brian Burner, director of solid waste. I appreciate the question. Your answer will be intimately answered as part of the results of the comprehensive solid waste management strategy. As you may remember, at the end of November, we undertook a very, very consistent and cohesive evaluation of curbside garbage and recycling where we brought in a team that basically deconstructed what was being thrown away, curbside, both residential, multifamily and from certain commercial settings. As part of that, they're still pouring over the data trying to determine exactly how much food waste is able to be set curbside, how much is actually able to be composted, and those results will be used in the development of our strategy. So very shortly, we should be starting getting some results out of that, and as they do start to come out and we start discussing those in either online surveys, which should come out in the end of January, and then our think tank/focus groups, which will occur in February and March, probably Marchish, will have very more intimate discussions on those results and that project specifically. Okay, that sounds great. Thanks very much, Brian. Thank you. I have a further question. Are you going to keep the breakdowns of the waste by residential, multifamily commercials so we know when we go to educate? Yes. Okay, good. Yes, okay. Thank you. Thank you. Any other questions? I think Barbara has a question. Oh, I'm sorry. Go ahead, Barbara. I just wanted to ask Brian, I noticed the other day that I saw a garbage truck going down some of the narrow streets and it was a smaller size that I haven't seen before. Do we now have some areas of Denton where the streets don't allow one of the big ones to go down? Do we have some smaller trucks now or have we always had? These are the mini-rearloaders which we bought to specifically address the valley service that was in the downtown area off Fry Street. They also do some other specific type of collections. They'll go on missed garbage so we don't have to send the big truck back, but they are used specific vehicles. Other than the downtown and Fry Street valley routes, they are not assigned to a specific route or a specific purpose or a specific need in the department itself. This was on Wainwright that I saw and it seemed like a good idea anyway. Just comment. Karen, did you have your hand up? Yeah, I just had a quick question. Brian, you just said that there was the valley service on Fry Street, so that's been expanded to Fry Street now? It was always that. After we got past the initial sort of pilot phase, we went into downtown and then into the Fry Street service area. So what Lucky Loos and the bar area in there, that's all been developed as part of the valley service because they were on shared dumpster service and it made more sense to break it down that way. Thanks. I didn't realize it had gone up into my neighborhood, so that's great. Thanks. You're welcome. All right, then are we on new business items, Tony? Ma'am. I've already covered... Okay. This zooming is getting so awkward. So we're on to concluding items. Does any board member wish to add another item to the agenda or say anything to staff? All right, then we'll move into work session. This item is to receive a report and hold a discussion and give staff direction regarding the potential sale of Texas and its power agencies Gibbons Creek steam electric station and related assets in Grimes County, Texas, including a review of the economics of the sale, the key provisions of the proposed asset purchase agreement and the risks associated therewith. Okay. Good morning, PB members. Terry Nalti, assistant general manager at DME and currently serving as interim director of water and wastewater. This presentation is intended to provide you an opportunity to see an overview of the proposed transaction as well as to answer any questions that you may have. This item will come back to you for final recommendation on the 25th and action will be taken by the council on the 26th. So with that, let me share my screen. Okay. Can everybody see that? Okay. So a little background about Gibbons Creek steam electric generating station. It is owned by four of the members of, sorry, it's owned by Texas municipal power agency. And you can see the ownership percentages where a 21.45% owner of the agency. The agency was formed to construct the Gibbons Creek power station as well as the transmission system to deliver power from the plant to the member cities. It's a 470 megawatt lignite coal fire generator. Just for comparison purposes, the Denton energy center is a 225 megawatt gas fired unit. The property itself around the power plant is 6,170 acres, including the 2200 acre Gibbons Creek reservoir. It did operate for 35 years. It was shut down in 2018 based upon economics, could not compete in the wholesale market. And since that time it has been, staff has been doing a number of studies around decommissioning and shutdown of the facility. This is an overview of the site itself. If you can see the power plant itself is right in this area. There are a number of coal combustion residual units or CCR units. These are the units where coal ash was managed during the operation of the facility. We have the coal ash ponds where the ash was conveyed. And then it was transported to one of the two landfill sites for permanent disposal. We also have a scrubber sludge pond. The scrubber was used to remove sulfur dioxide from the flue gas stream and produced at waste. All four of these sites are considered coal combustion residual sites. So each of these sites are subject to EPA regulations. Those regulations will require TMPA or the buyer to clean close or close the facilities consistent with the regulations. And we estimate the cost of those to be $88 million of remediation costs. In addition to that, the regulations require ongoing monitoring, sampling and reporting. That is estimated at $500,000 a year for the next 30 years. So $15 million of additional ongoing costs. And then there are some ongoing operations costs for the dam and natural gas pipeline that goes through the site. The sale process, there was a request for proposal issued in June of 2019. That RFP required the respondents to decommission the plant and remediate all the CCR units and to provide certain financial security to assure that the cleanup would be done and a demolition would be done in accordance with the requirements. So there's two phases to the work. Phase one is the actual decommissioning and remediation. That is covered by a surety bond. And then the post closure activities which are covered by another surety bond called the post closure bond. Five proposals were received. The board of TMPA directed staff to begin working with one of the groups, Chara Melt Solutions who have formed the Gibbons Creek environmental redevelopment group and they've been negotiating a transaction with this group for the last year. The original transaction included the potential of restarting the coal fired power plant. That option has gone away and the current deal requires a demolition of the coal plant and retains the economics of the original deal. So there will not be any coal fire generation at the site in the future. The TMPA board approved the asset purchase agreement on December 10th and subsequent to that time, the members recommended the extension of the pollution liability insurance beyond the four years of that are in the asset purchase agreement to 10 years, so additional six years. We thought it was a good risk reward trade off and that amendment was approved by the TMPA board last week on the seventh. The remediation project and decommissioning is anticipated to save in excess of $48 million as compared to self performance of the remediation and demolition activities. And I'll get into the specifics of the economics in a minute. The joint ownership or sorry, joint operating agreement, which is the document that's been signed by the four members requires that all cities approve the transaction for it to move forward and you and you will see a concurrent ordinance that will be provided for your review and recommendation on the 25th. That concurrent ordinance is an identical document that will be executed by all four cities. The buyer is Gibbons Creek Environmental Redevelopment Group. It is a wholly owned subsidiary of Chara Solutions. It's a Texas limited liability corporation. Chara Solutions is a publicly traded company with over half a billion dollars of revenues in 2019. They are the preeminent and leading provider of coal combustion by product management in North America. They're doing this type of work at various sites throughout the US and they also provide ash management, O&M services to many electric utilities and they do nuclear O&M as well. However, from a risk perspective, the deal team thought it was important to ensure that the performance under the contract was fully securitized and not dependent upon the financial wherewithal of Chara Corporation on a going basis. So there are performance bonds, pollution liability insurance and post-closure bonds that are independently securitized to ensure that the work gets done properly, regardless of what happens with Chara. The major terms of the agreement for TMPA, Chara assumes all the environmental liabilities. They indemnify a TMPA. They will remediate all the CCRs and decommission the plant. They will issue a performance bond or obtain a performance bond of $36.5 million. That bond will be reduced as the remediation work is completed down to a level of $2.84 million, which will be retained as security until the post-closure bond is delivered. Post-closure bonding will be compliant with the requirements of TCEQ. There are special warranty deeds that extend to the particular pieces of property in which there are CCR units so as to not disturb the waste in the future. There is a $25 million water pollution liability insurance, naming TMPA and the cities as additional insured, and then we are express beneficiaries of all the obligations. What does Chara's GCERG get? They get 6,200 acres, including all the structures, the reservoir and all equipment on the site. They receive an initial payment from TMPA of $6.5 million. And then we fund, TMPA funds an environmental escrow payment of $28.5 million. And that's to fund the remediation projects. As I mentioned, the draws on that escrow will be based upon progress over a 34-month period, and it's controlled by an environmental designee that's appointed by TMPA. And then we also pay 50% of the initial performance bond. So here's the economics of the transaction. As you can see, this first table on the left compares three scenarios. Scenario one is the transaction that's in front of you today. Scenario two envisions a potential default of Chara. See Gibbons Creek Environmental Redevelopment Corporation sometime during the remediation activities. And scenario three is the self-performance by TMPA. So you can see in the table the out-of-pocket cost to TMPA is $36.63 million for scenario one, the current transaction in front of you. In event of a default, we estimate our out-of-pocket cost to be $78.9 million. And if we were to perform the remediation ourselves, out-of-pocket costs of about $84.6 million, that results in the savings of $48 million of option one compared to option three. For Denton, this represents a $10.3 million savings as compared to what we've budgeted in, I'm sorry, a $10.3 million savings as compared to the self-performance. So our share of the self-performance versus our share of the current transaction in front of you results in a $10.3 million savings to the rate payers. So the five-year forecasted savings for City Denton are about $13.57 as we had $21.3 million budgeted over the next five years for remediation and decommissioning. For the fiscal year we're in currently, we project a savings of $1.8 million. We had budgeted $9.5 million. Our out-of-pocket cost is $7.75 million, and that represents a $1.8 million savings in this fiscal year. Risk management is a key aspect of the transaction because of the liability associated with these wastes that have been disposed of at the site. So land use is a question that has come up. And as I mentioned, we will have perpetual deed restrictions that will be placed on the CCR units to limit the future land use and avoid any disturbance of the waste. To the extent any of these particular parcels that have CCR units on them are transferred, TMPA retains a veto right to the extent that the new buyer didn't meet the deed restrictions and insurance requirements. The rest of the property will be assessed over the coming months as to whether it's clean or dirty. Clean meaning there are no known environmental contaminants on the site. Dirty would be anything that does have identified contamination on the site. We don't expect that any of the other sites will have contamination. But if they do, the same type of deed restrictions would be imposed upon those sections that contamination would be discovered on. Accountability is key. So as I mentioned, we're appointing an environmental representative to monitor and audit the site activities. And that environmental representative will be the person that will be verifying the progress of the contractor of Chara to the milestones for the cleanup schedule. And then we'll release funds from the escrow accordingly. So in summary, it does represent this transaction represents a savings of about $48 million to the members. For us, it's a $10 million savings versus the current plan. And it represents the savings of $1.83 million in this fiscal year, $13.5 million versus the five-year plan. Most importantly, the environmental risk profile is significantly reduced. And we don't have any of the ongoing, as I mentioned, that $15 million projected 30-year cost of monitoring, record-keeping, and reporting. That all now becomes an obligation of the buyer. There is an additional 10,000-plus acres of mineland that's adjacent to the property that's being sold that is owned by TMPA. That tract of land will be taken up by the TMPA board at a later date for final determination of what will be done with that. That is not part of this posting today. And importantly, we will retain all the transmission assets on the plant site. They are a significant investment and have a lot of value. So TMPA will retain all those transmission assets. And that concludes my presentation. I do have on the phone with me four people from TMPA. Bob Kahn, the general manager of TMPA; Carl Shehady, the attorney for TMPA; Al Axe, the environmental attorney for TMPA; and Robert McCormick, the primary transaction attorney on this transaction. With that, I will stop sharing and will be glad to answer any questions. Right. Questions of the board? Yes, Karen, go ahead. Hi, Terry. Thanks. It's clear on fourth reading of all this is much clearer to me, but my initial reaction was I was wondering why TMPA was paying into an escrow account to guarantee the behavior of somebody else. Why would that be called an escrow account? It's an escrow account only because it's money that's put aside to cover the remediation activities. We control the escrow to put in an escrow so that it can only be used for that prescriptive purpose and it will be drawn down as the project is completed. But it's guaranteeing the behavior of CHARA. Yeah. I'll ask Bob or Robert to answer that question. Sorry, I'm just going to figure out the terms. Yeah, sure. Terry, can you hear me? Yes, sir. Go ahead, Bob. Okay. Yeah, Bob Kahn, general manager of TMPA. Yeah, the escrow account, we put it in an escrow because we don't want to just get in the money. We don't want them to use it for other purposes. So it guarantees that they'll only use it to remediate the plant site. And as Terry indicated, we have an environmental designee who will be going out there. That person works for us to make sure that they've completed the work and on schedule. And as they complete the work on schedule, then they will get paid. If they don't complete the work, they don't get paid. Okay. Does that answer your question? Yeah. I was just kind of wondering of the terminology of escrow. Since that's usually my experience with escrow accounts is when I had slacker landlords that I've had to withhold rent from. Sorry. I was a graduate student once and so it was to guarantee my... I had an escrow account to guarantee my behavior that I would pay the rent if necessary. And so I was just wondering why this was called an escrow since it's guaranteeing Chara's behavior. But I guess that makes sense. We don't pay them unless they behave well. Correct. Thank you. Thanks for clearing that up. Other questions. Go ahead, Ed. Yeah. Bear with me. I've got a list here. One thing I noticed in the presentation that there was really no indication of the extent of pollution at this facility. And I think that would be good to know because it has a bearing, of course, on the remediation process. What I found just doing some research, I found that in January of 2019, an outfit called the Environmental Integrity Project did a study on groundwater contamination from Texas coal ash dumps. And it specifically deals with Gibbons Creek and has measurements, et cetera. But just briefly as an overview, all of the ash ponds were constructed in 1977 as we know, and none of them meets the liner criteria of the coal ash rule. So they are formally considered "unlined." Because of that, all three coal ash units are on or close to the shore of the reservoir at Gibbons Creek. And as we know, the reservoir also serves as a recreational fishing area. And the report says that all three coal ash units at Gibbons Creek are contaminating the groundwater. And this is detailed in the report with measurements of the pollutants. "Are contaminating the groundwater most or all of the contaminated groundwater eventually discharges into Gibbons Creek Reservoir where it threatens aquatic life and human life through any fish that are caught and consumed." So I think it's important to know the scope of this project by understanding a little more what has to be remediated. So I would like at some point to see a detailed paper or report on remediation targets and the timeline that goes with it. I assume that there is such a plan. Yes, Mr. Sofe, there is. TMPA has done extensive studies by engineering firms and environmental firms to assess the extent of the limits of the CCR units. And the remediation project itself involves the removal of any residual materials from the ash pond, from scrubber sludge ponds, and then places them into permanent disposal sites in landfill F. And so that landfill will be closed in accordance with TCEQ requirements. There will be ongoing groundwater monitoring reporting and any action that would be required would be consistent with the regulations. So as you're probably aware, TMPA posts all the information regarding its CCR units on its website. It's a requirement under the CCR rules. And the site is in compliance with those regulations at the current time. Bob, do you want to add anything? Or do you want Alan to add anything? No, I mean, everything you said is correct. We are in compliance. TCEQ monitors our website and we file reports with them. As far as the cleanup goes, we do have a detailed schedule attached to the asset purchase agreement that requires them to remediate it in a certain manner. And they will have to get signed off by TCEQ before they can complete the project. Thank you. Is that schedule posted on the TMPA website? It's actually an attachment to the documents that you received, Mr. Sofe. There is a schedule on the asset purchase agreement. One of the attachments is there. Okay, thanks. Can I continue or do you? Absolutely. Go ahead. Okay. In reading the purchase agreement, obviously I didn't go down far enough. I would have answered my first question. But I think to go back to that, I think it's crucial that maybe council should know that that schedule is on there just for transparency's sake. Because a lot of stuff, I mean, people are often put off by these things. The second thing I wanted to ask about is in reading the purchase agreement under section 5.10, a phrase jumped out at me which is this. After closing, purchaser covenants that it will, I immediately begin and diligently pursue in a commercially reasonable manner. That phrase, commercially reasonable manner is not defined in the definitions of the document. And the reason why this stuck out to me is because House Bill 40, which was the state law that was He froze. Or I froze. Passed what? We missed part of what you said. You were frozen. At least from my perspective. Oh, I'm sorry. Should I go back to the beginning? Did you get the commercially responsible clause? Yes, you did that part. Yep. Okay. And the reason why- HB 4. HB 40. When you froze for me. Yeah, okay. House Bill 40, which banned Denton's fracking ban, had a similar phrase. However, in the House Bill 40 document, that phrase was defined. And this phrase is not defined in this document. And I think it's pretty crucial to do that because for obvious reasons. So Mr. Sof, I'm going to defer to the attorneys, but I will say that I've done a lot of transactions in the power space and commercially reasonable measures is a term of art, a legal term of art. It has meaning under the Uniform Commercial Code. And with that, I would ask one of the attorneys, either Carl or Robert to weigh in on that. Robert, can you handle that, please? Certainly. So the standard commercially reasonable matter is a term that not only in the environmental space, but really in contracting in general, is a commonly used term such as diligent manner or best efforts or something like that. So it is generally used to make sure that whoever's performing a particular task is doing so continuously with an aim to getting it done. And it's it's used in this section in particular, simply because TNPA wanted to make sure that CHARA when they were out doing their environmental closure and post-closure compliance obligations, were doing it in a in a reasonable manner, consistent with generally applicable standards in the industry. And so that would include compliance with all laws and pursuing it. So you'll also see other information or other language in those same phrases. So they're diligently pursuing not only in a commercially reasonable manner, but also in accordance with the project schedule. And that's the schedule that you were previously referred to as being attached to the asset purchase agreement. So that's that 34 month project schedule beginning on the closing date and then going out from there. So I hope that answers your question. If not, I'm happy to address it further. No, thank you very much. I still think it should be defined in the document. And I think that I see no reason why it can't be expanded to reading commercially and environmentally reasonable. Environmentally reasonable would be a term to use simply because it doesn't really have any meaning in general accepted use. So it's all we can say is really that it's commercial that it is in compliance with environmental laws. And then we assume that the laws are environmentally reasonable. Right. And that is that is their standard. Right. But the point I'm making is that it's just as ambiguous as commercial is. The next thing I'd like to address is there's talk of Texas is trying to as you know, Texas is trying to get from the EPA the ability to do it's basically its own policing of coal ash. And there's also the possibility that with a new administration that is perhaps a little more environmentally conscious than the last one, that there will be further strengthening of federal regulations or coal ash remediation. So I'm my question is, is that a consideration in this in this remediation document? The possibility of these changes? Yeah, Mr. Sof, this is a question that was asked by council as well. And, you know, the normal course of regulatory matters, state versus federal is that a federal regulation becomes enforced by the state after primacy is granted to the state once they demonstrate that their program is at least as stringent as the federal requirements. And in this case, the the request by TCEQ to take over primacy for this program does meet that standard. It is at least as stringent. The state agency having primacy over the program allows specific state issues, concerns that an individual state may have that could warrant regulations that are more stringent than the federal regulations. It allows the state regulatory agencies to promulgate those more stringent regulations. So it is a what I would term a normal course of business and regulatory matters for this to happen. And then I would ask Bob or Al to weigh in on what would happen under the terms of the agreement if the regulations became more stringent. Well, I'll try that in the first instance. The agreement requires them to do everything consistent with all the laws, whatever they happen to be at the time. So if they change regulations, it's not unusual for regulations to change over the years and travel will just have to follow whatever the requirements are. Does that answer your question, Mr. Sof? Yes, it does. And thank you. Is there any it will there be any transparency with the buyer on on the uses of the land that it might sell? So under the terms of the agreement, there's no such requirement, with the exception of the warranty deeds that I've mentioned previously. You know, the the buyer is not precluded from using the property for whatever purposes it intends to as long as they're consistent with Grimes County land use requirements, much as we would when we sell a home, we don't impose new restrictions on the buyer of our homes. Once the new owner owns the home, it's up to them to do what they will with the property. I think the same would would hold true here. We have requested at the behest of counsel from the buyer some direction if they're willing to share on future uses for the property and we will be issuing a ISR Friday report summary of what what that response is. Can I ask a question and just following up? And is that why we're doing the dirty versus the clean? Because if it had ash there before, we don't want to allow them to sell that land to someone because we will still be held responsible under the cradle to grave was with circular. Is that correct? That is correct, essentially correct. And for just for clarification purposes, you know, there are four parcels that have these CCR units, potentially six other parcels that do not. It's not CCR waste that we would be concerned about. It's other types of contamination that may have occurred. That's the the focus of the clean versus dirty determination. Okay. All right. Thank you. I just have one more question, please. And that is, what exactly is an environmental representative? Is he a scientist, an engineer? Are there certain qualifications that that person has to have? I'm curious as to what a job description for an environmental representative is? Yes, I'll ask Bob to give you the specifics on the individual that TMPA has hired to fill that role. Thanks. Sure. Sure. Can y'all hear me? I just want to make sure I'm not muted. Okay. So we hired somebody his name is Joe Schultz. He's a engineer. And he's been working for us for many, many years. He worked on our landfills. He's very familiar with what's going on at TMPA environmentally. And so he will be the environmental destiny that is in charge of making sure they get stuff done. We also have somebody that works directly for TMPA. His name is Daniel Metals. He's an engineer. He's our compliance officer. And he's very familiar with all the environmental laws also. And he is going to be more of the hands on going out there, making sure they're clean closing or remediating the way they're supposed to. And he's been very close to this agreement as far as what's required as far as remediating. Great. Thank you very much. Yes, Barbara. Go ahead. If this property, if the entity that's looking to purchase it, if they come up with a buyer, the title search would turn up that there was the history of this. So that would be called to the attention of the next buyer. I mean, that would be fully, you'd have to be, it would be disclosed because it would be in the title search. Is that not correct? I'll have to defer to one of the lawyers. I'm not a real estate expert. Robert, do you want to handle that? Certainly. You are correct. The warranty deeds that we put in place have references back to Char's obligations to remediate the property and to indemnify TMPA and the member cities for environmental obligations. So those obligations will be recorded in the chain of title through the warranty deeds that we were recording at closing. And that's the primary purpose for having the forms of warranty deeds that we have in place now, both for the quote unquote dirty parcels and for the clean both of them, both forms disclose the ongoing release of indemnity obligations with respect to TMPA. Other questions? Yes. Karen, this isn't, I just had a question about the ladies trust is orchid. I know that's not on the land that's under consideration. It's on the mine land. So is that what's the status of that orchid? Is that a federally protected plant or a state protected plant or just a plant of interest? My understanding is that it is a federally protected species. So that's what we do with the mine land. Potentially. You know, there are conservation easements in place where at least five conservation easements that are in place where those orchids are found. And what happens with those conservation easements will be determined by whatever the ultimate disposition of the properties are, whether they're sold. You know, three of the five areas I understand are on lease properties. And once the leases expire, those will revert back to the landowners from whom we've leased the property. Okay. Thanks. Other questions? Discussion? Charlie, go ahead. Terry, within the city of Denton, who are the folks that are most in the detail on monitoring this agreement and following it through and reviewing? Would that be you? That would be me, yes, sir. Okay. And how many hours would you say you've spent working on this? Boy, that's hard to say. You know, TMPA has a number of committees, and this has been the primary focus of most of the TMPA activities over the last year and a half. So, you know, we meet at least quarterly as the planning and operations group. There's the financial working group. There have been a number of meetings to discuss the status of the transaction. I know Larry Collister has been involved with the attorneys at length. So the city has invested a significant amount of time. I would say, you know, I know personally I've spent well over 40 hours in the last year specifically working on this particular transaction. Charlie, I would also point out that Mr. Billy Cheek is also appointed to the TMPA board, as well as Chris Watts. Chris' term will expire later this year and Billy in 2022. But they have also been heavily involved as part of their responsibilities on TMPA board directors. Thank you for that follow-up. That was going to be my next question so that people can understand we've had representation for a very long time. So as a volunteer board member who is not an attorney or familiar with all of the environmental applications and the financial implications, I feel very comfortable with Terry being our point man and doing what's best for the people of Denton. And so I appreciate knowing that. Did I hear you say, Terry, that the plant shut down because it was not able to compete in the wholesale market at the time? That's correct. Would I generally believe coal is the cheapest power available? Is it just that the environmental compliance is expensive enough that it was no longer economically feasible to operate the plant? Amongst other things, yes. But you think about a coal plant. A coal plant is generally a base load facility, runs around the clock at a fairly high output level. And as I think, Mr. Parker, you have come to realize at night these prices are very, very low. So that unit operating at a minimum level would be losing money every hour of the night and many hours during the day as it was operating, variable cost being above the wholesale market. And then on top of that, you'd have to add the fixed cost for debt and other depreciation expense, other financial expenses. So that's in general coal fire generation does not compete well in the Texas market. And quite frankly, doesn't compete well anywhere in the US today with natural gas prices being as low as they are and renewables, the price that we're paying for renewables. That helps me out a lot to know that we're not doing this just for environmentally beneficial reasons. In addition, economically, this is something that needed to be shut down. Have you made a recommendation on yourself personally? Do you think this is a good deal and something that the four cities should pursue? Absolutely. I think this is not only is this a better economic outcome for rate payers, but most importantly, it is a way to reduce the risk profile of the city in a way that can't be done in any other manner. Okay, thanks. That was what I was hoping you would say. I'm done. That's what I was hoping he would say too. Any other questions, comments? All right. We are not taking action today, are we? This is just to work. No, this is just to answer your questions. Again, this will be back in front of you on the 25th. From my perspective, reducing the risk for the city, as well as the financial, that's very important. Environmental cleanups can be time consuming and costly. I've been through them in my past. I guess that's it. Do we have a motion to adjourn? Go ahead, Ed. You motion? And I think Charlie second, so we are adjourned. I did. Thank you. Thank you. Bye bye.