1 00:00:00,000 --> 00:00:11,040 Okay, it is nine o'clock. We'll call to order the public utilities board meeting for the 2 00:00:11,040 --> 00:00:18,520 city of Denton on Monday, January 11th, 2021. The first item on the agenda is a public comment 3 00:00:18,520 --> 00:00:25,000 period. And my understanding is we did not receive any white card comments. And are there 4 00:00:25,000 --> 00:00:34,320 any people waiting on the phone? Hi there, this is Tyler Smith. I am there are no public 5 00:00:34,320 --> 00:00:40,080 comments at this time. Okay, thank you, Tyler. And the next item is going into the consent 6 00:00:40,080 --> 00:00:48,680 agenda. Does any board member wish to pull an item from A through J? I had a question. 7 00:00:48,680 --> 00:00:54,840 Do I have to recuse myself from the UNT items? Do Ed and I have to recuse ourselves? I'm 8 00:00:54,840 --> 00:01:03,980 retired. I'm retired in a couple of weeks. Larry, Larry, could you answer? Yeah, if you're 9 00:01:03,980 --> 00:01:11,400 still actively engaged in employment with UNT, then yes. Okay, so do we still have a 10 00:01:11,400 --> 00:01:21,280 quorum? Oh, one, two, I guess we've got four. If we can count Ed, then we've got a quorum. 11 00:01:21,280 --> 00:01:32,040 But we'll have to pull the UNT items. I'm not voting on them. So that is a yes. I think 12 00:01:32,040 --> 00:01:40,360 that's it. Yes, I believe that's it. Okay. All right. So we'll pull item A. Barbara H. 13 00:01:40,360 --> 00:01:57,920 Anyone else? All right. Do we have a motion to approve B through G and items I and J? 14 00:01:57,920 --> 00:02:05,880 So moved. Second. All in favor say aye. Aye. Aye. Aye. Opposed? Close carry. Okay, item 15 00:02:05,880 --> 00:02:13,120 A. And it's simply because Karen needs to abstain. Do we have a motion to approve item 16 00:02:13,120 --> 00:02:28,800 A? Don't move. Second. All in favor say aye. Aye. And Karen? Abstain. The next item is 17 00:02:28,800 --> 00:02:37,160 consider the approval of the December 14th minutes. Did anyone see any problems or corrections? 18 00:02:37,160 --> 00:02:44,040 We need to address H. Oh, I'm sorry. We do. I'm so sorry. Thank you. Trying to be efficient, 19 00:02:44,040 --> 00:02:49,680 I guess too efficient. Go ahead, Barbara. I just had a question about I don't understand 20 00:02:49,680 --> 00:03:03,960 the piggyback option. Someone from purchasing? That was an option on the hog culling. If 21 00:03:03,960 --> 00:03:12,480 we have Laurie Hewell or Christine Taylor on the phone, they can address that. I see 22 00:03:12,480 --> 00:03:25,000 Christine Taylor's name. This is Laurie Hewell. Can you hear me? Yes. Hi. Yes. I'm the purchasing 23 00:03:25,000 --> 00:03:32,880 manager and piggyback just means that the vendors will allow other cities to possibly 24 00:03:32,880 --> 00:03:43,720 use our contract. So they're agreeing to say the City of Lewisville needed this heavy equipment 25 00:03:43,720 --> 00:03:51,200 rental contract. They're agreeing to allow them to be able to piggyback and use our contract 26 00:03:51,200 --> 00:04:00,840 and use our pricing. A little bit like cooperative purchasing? Yes. Correct. Okay. Thank you. 27 00:04:00,840 --> 00:04:10,880 We have a second. All in favor say aye. Aye. Opposed? Thank you, Charlie, for keeping me 28 00:04:10,880 --> 00:04:20,080 on track. Next item is consider the approval of December 14th, 2020 minutes. Are there 29 00:04:20,080 --> 00:04:25,400 any changes or corrections? Yes, Karen. I just I had a question. I know we've talked 30 00:04:25,400 --> 00:04:31,680 about this before, but the written agenda that we approve is pretty spare. It just says, 31 00:04:31,680 --> 00:04:36,560 you know, so-and-so asked a question, staff answered it. The last time I brought this 32 00:04:36,560 --> 00:04:43,360 up, staff said, well, the official record is the video. Makes sense because of course, 33 00:04:43,360 --> 00:04:51,560 the video is complete. So is there a reason that we are approving a written agenda if it's 34 00:04:51,560 --> 00:04:59,720 not the official agenda anyway, or the official minutes? Sorry. I'll defer to Larry. We're 35 00:04:59,720 --> 00:05:05,560 doing what we need to, right? That's a really good question. We've always approved written 36 00:05:05,560 --> 00:05:12,520 minutes and I don't think we've honestly looked into that as far as what the official record 37 00:05:12,520 --> 00:05:16,480 base. So I would encourage y'all to go ahead and approve the minutes that I want to get 38 00:05:16,480 --> 00:05:25,960 with the city's secretary and city attorney about that. Just one more question, Ed. Sorry. 39 00:05:25,960 --> 00:05:31,120 The reason we haven't thought about this is because the complete video hasn't really been 40 00:05:31,120 --> 00:05:36,960 available for all the different boards and commissions until recently. So something that 41 00:05:36,960 --> 00:05:43,840 is new and it's definitely a look into it. Yeah. Thanks, Larry. Good point, Karen. Yes, 42 00:05:43,840 --> 00:05:50,160 Ed. Oh, I was just going to say that perhaps if someone access the minutes off of the website 43 00:05:50,160 --> 00:05:54,800 and was looked at that, that perhaps there should be something on the minutes themselves 44 00:05:54,800 --> 00:06:02,080 that says for more detailed information regarding this particular discussion, please see such 45 00:06:02,080 --> 00:06:11,040 and such a number or a place in the video as the official record. Because I don't know, 46 00:06:11,040 --> 00:06:19,880 maybe a lot of people don't know that the official record is the video really. I'm sure 47 00:06:19,880 --> 00:06:32,580 most don't, Ed. Okay. Having that discussion, do we have a motion to approve the minutes? 48 00:06:32,580 --> 00:06:41,880 So moved. And a second. Thank you, Ed. All in favor say aye. Aye. Opposed. Next item, 49 00:06:41,880 --> 00:06:45,800 consider recommending the adoption of an ordinance of the city of Denton to declare the intent 50 00:06:45,800 --> 00:06:54,000 to reimburse capital program expenditures, the electric utility for 42 million 538108 51 00:06:54,000 --> 00:07:05,120 flood waste for 3 million, water for 23 million 647184, wastewater 26,144,574 and the general 52 00:07:05,120 --> 00:07:11,680 government for 72 million 608678 with the tax preferred obligations, certificates of 53 00:07:11,680 --> 00:07:16,240 obligation and general obligation bonds with an aggregate minimum principal amount not 54 00:07:16,240 --> 00:07:28,040 to exceed 167,938544 and providing an effective date. Good morning. My name is Cassie Ogden, 55 00:07:28,040 --> 00:07:36,760 director of finance. Let me share my screen and I will have a brief presentation for you. 56 00:07:36,760 --> 00:07:41,200 So I'm here today to discuss the reimbursement ordinance. This is an annual activity that 57 00:07:41,200 --> 00:07:49,600 the city undertakes in order to sell our bonds for our capital program. So it is dictated 58 00:07:49,600 --> 00:07:55,840 by federal law that we have to issue this intent to reimburse ourselves with tax exempt 59 00:07:55,840 --> 00:08:02,360 bonds at a future date. This has to happen within 12 months before the end of the fiscal 60 00:08:02,360 --> 00:08:07,080 year. So, and this is outlined in our debt policy that council annually adopts. They 61 00:08:07,080 --> 00:08:15,220 just actually adopted it last week. So for water and before I get started on the projects, 62 00:08:15,220 --> 00:08:22,400 we do have each department director on the line. If you have project specific questions, 63 00:08:22,400 --> 00:08:28,400 I'll ask them to jump in. So for water projects, you can see the column for the budget we were 64 00:08:28,400 --> 00:08:38,460 requesting in the budget 35 million, 35.5 million for capital projects for this year. 65 00:08:38,460 --> 00:08:43,640 After reviewing all of the projects and going through the timeline associated with those, 66 00:08:43,640 --> 00:08:53,040 we are requesting 23.6 million in funding for water for this fiscal year. And if you 67 00:08:53,040 --> 00:09:01,720 don't question, yes, if I may, does that would I be correct in assuming that 35 minus 23 68 00:09:01,720 --> 00:09:07,720 is 12 million? Is that essentially something we are funding within ourselves and not borrowing 69 00:09:07,720 --> 00:09:14,760 money to do? We essentially those projects may have shifted timeline. So you see, for 70 00:09:14,760 --> 00:09:20,840 instance, the regulatory performance upgrades, we budgeted 14 million, but we are not moving 71 00:09:20,840 --> 00:09:26,200 forward with that project this year. The timing may have slipped. And so we'll continue to 72 00:09:26,200 --> 00:09:32,280 re-budget that project in the upcoming fiscal year, if appropriate, if the department director 73 00:09:32,280 --> 00:09:37,880 says we do need to move that. But these are projects that we just won't be doing this 74 00:09:37,880 --> 00:09:44,960 fiscal year. >> Okay. What percentage of these projects 75 00:09:44,960 --> 00:09:52,000 are we paying for out of operations and what percentage of these projects are we borrowing? 76 00:09:52,000 --> 00:09:56,720 >> So these are all projects that we are borrowing. I've only listed the debt component of these 77 00:09:56,720 --> 00:10:03,320 projects. So there may be a revenue-funded component that is not listed here. The only 78 00:10:03,320 --> 00:10:07,400 listing that you see are debt. >> Okay. Thank you. 79 00:10:07,400 --> 00:10:14,320 >> And how many of these are under the bonding approval that the citizens approved? 80 00:10:14,320 --> 00:10:20,560 >> These are only water projects. So the citizen approved projects I've left off of this presentation, 81 00:10:20,560 --> 00:10:25,960 even though it's in the ordinance and the caption, I had to have the caption match with the ordinance. 82 00:10:25,960 --> 00:10:31,200 >> Okay. So the text dot ones are -- oh, those are because -- those were not citizen approved. 83 00:10:31,200 --> 00:10:34,440 Never mind. Okay. >> Yes. The text dot are because the water 84 00:10:34,440 --> 00:10:38,840 is relocating lines within the -- for the text dot projects. 85 00:10:38,840 --> 00:10:45,400 >> Okay. >> Any other questions on this slide? Okay. 86 00:10:45,400 --> 00:10:49,880 So wastewater, you can see we had several projects that were budgeted that were not 87 00:10:49,880 --> 00:10:54,880 moving forward with either -- they're not being debt funded or we are going to use revenue 88 00:10:54,880 --> 00:11:03,200 funding. And so I will continue to the next page. There's quite a long list for wastewater. 89 00:11:03,200 --> 00:11:10,320 And then total overall, we budgeted $32.8 million, and we are requesting debt funding 90 00:11:10,320 --> 00:11:20,600 for $26.1 million. So we had one project that we are moving forward with for $3 million 91 00:11:20,600 --> 00:11:27,280 for their fleet facility. And then electric, same with electric, we had projects that we 92 00:11:27,280 --> 00:11:33,560 are not moving forward with that are -- we're not moving forward with debt service. Total 93 00:11:33,560 --> 00:11:41,260 of $61.4 million that we budgeted, and we are requesting $42.5 million for debt funding. 94 00:11:41,260 --> 00:11:47,200 So you can see it's a total saving or total difference of about $37.5 million from the 95 00:11:47,200 --> 00:11:55,920 budget to what we're actually selling debt for. Timeline for the bond sale, we will review 96 00:11:55,920 --> 00:12:01,360 this with council tomorrow, then go to bond oversight committee for the geo-funded projects, 97 00:12:01,360 --> 00:12:05,480 which were not listed in this presentation. And then we will review all of the projects 98 00:12:05,480 --> 00:12:12,240 with audit finance committee before council adopts the official notice of intent and then 99 00:12:12,240 --> 00:12:21,400 projected to close on the bonds in June and receive the funding. 100 00:12:21,400 --> 00:12:36,000 >> Any other questions? Okay. Having none, do we have a motion to approve? No motion 101 00:12:36,000 --> 00:12:46,520 to approve? Thank you, Barbara. Do we have a second? 102 00:12:46,520 --> 00:12:51,680 >> I guess I'll second. >> Okay. All in favor say aye. 103 00:12:51,680 --> 00:12:57,480 >> Aye. >> Opposed? Okay. Carries. Thank you. 104 00:12:57,480 --> 00:13:01,800 >> Thank you. >> Next item is management reports. 105 00:13:01,800 --> 00:13:08,880 >> So, PBA members, there's a -- this is Tony Puente, executive manager of utilities. We 106 00:13:08,880 --> 00:13:14,920 have a couple of memos, a few memos that we had follow-ups for you. The first one being 107 00:13:14,920 --> 00:13:21,400 the utility sole source procurement list. Then we also provided additional information 108 00:13:21,400 --> 00:13:27,480 regarding the extendable commercial paper and some of the pricing that there was a question 109 00:13:27,480 --> 00:13:34,740 about at your last meeting. And then also finally the response to a question about buy 110 00:13:34,740 --> 00:13:40,920 America or American manufactured products. So we have Cassie here. We also have Christine 111 00:13:40,920 --> 00:13:48,600 Taylor on the phone if any member has any questions about any of those three items. 112 00:13:48,600 --> 00:13:55,880 >> Anybody have any questions? I know the two members that asked about the buy American 113 00:13:55,880 --> 00:14:01,480 are not on. So anybody else have -- yes, Ed, go ahead. 114 00:14:01,480 --> 00:14:05,560 >> I have a question about something on the -- this procurement list. 115 00:14:05,560 --> 00:14:13,000 >> First item? >> Yeah. The largest item is I assume the 116 00:14:13,000 --> 00:14:18,200 Wartsilla overhaul has to do with the deck. >> That's correct. 117 00:14:18,200 --> 00:14:26,480 >> But my question is, what are swing sets? >> So I have Terry Nolte on here. 118 00:14:26,480 --> 00:14:30,560 >> Capital spares. >> Okay. So Terry's telling me these are capital 119 00:14:30,560 --> 00:14:36,320 spares. So basically it's a replacement parts for the engine, yeah. 120 00:14:36,320 --> 00:14:40,440 >> That's all right. I couldn't see the guys out there playing on the swing. So I wanted 121 00:14:40,440 --> 00:14:45,040 to -- >> That's a good question, Ed. 122 00:14:45,040 --> 00:14:54,360 >> Okay. If there's no other questions, you know, we do have your future agenda items and 123 00:14:54,360 --> 00:14:59,600 just have a list of a couple of items that are coming up here in the next few meetings 124 00:14:59,600 --> 00:15:06,680 for you. The largest of that being, of course, a follow-up on the utility rates and budgets. 125 00:15:06,680 --> 00:15:14,560 That's just a closeout of where we ended the previous fiscal year. And then have for you 126 00:15:14,560 --> 00:15:19,160 as well new business action item and there's a number of items that we're still working 127 00:15:19,160 --> 00:15:26,840 on. The largest being the comprehensive solid waste management strategy. We are working 128 00:15:26,840 --> 00:15:33,440 on that and hope to have an update for you here in the next few weeks. But with that, 129 00:15:33,440 --> 00:15:38,040 that concludes the management section. There's a question about any of these items. 130 00:15:38,040 --> 00:15:44,560 >> Go ahead, Ed. >> Yeah. On my item under new business action 131 00:15:44,560 --> 00:15:52,840 items, discussion and pilot project on recycling and residential composting, I think that needs 132 00:15:52,840 --> 00:15:59,560 to -- I don't think I included recycling in this. It was just a discussion and pilot program 133 00:15:59,560 --> 00:16:06,440 on municipal and residential composting. So I just type over whatever, but the recycling 134 00:16:06,440 --> 00:16:17,020 doesn't need to be in that. And I would like to ask for a new -- a future business. I noticed 135 00:16:17,020 --> 00:16:25,840 in the consent agenda there was a purchase of a bulldozer for the landfill. And in the 136 00:16:25,840 --> 00:16:32,320 backup material for that, it said that since 2017, landfill waste has increased by more 137 00:16:32,320 --> 00:16:41,920 than 31%, amounting to an additional 120,000 tons per day. What I would appreciate getting 138 00:16:41,920 --> 00:16:51,120 information on is how much of that 31% increase is food waste. 139 00:16:51,120 --> 00:16:58,560 >> Yeah. I don't know if Brian's on here, but we can certainly follow up with you and 140 00:16:58,560 --> 00:17:02,320 get you that information. >> Thank you very much. 141 00:17:02,320 --> 00:17:06,880 >> Brian's on. >> Yes. Mr. Stouff, Brian Burner, director 142 00:17:06,880 --> 00:17:13,240 of solid waste. I appreciate the question. Your answer will be intimately answered as 143 00:17:13,240 --> 00:17:18,440 part of the results of the comprehensive solid waste management strategy. As you may remember, 144 00:17:18,440 --> 00:17:27,160 at the end of November, we undertook a very, very consistent and cohesive evaluation of 145 00:17:27,160 --> 00:17:34,560 curbside garbage and recycling where we brought in a team that basically deconstructed what 146 00:17:34,560 --> 00:17:43,120 was being thrown away, curbside, both residential, multifamily and from certain commercial settings. 147 00:17:43,120 --> 00:17:48,800 As part of that, they're still pouring over the data trying to determine exactly how much 148 00:17:48,800 --> 00:17:55,080 food waste is able to be set curbside, how much is actually able to be composted, and 149 00:17:55,080 --> 00:18:00,000 those results will be used in the development of our strategy. So very shortly, we should 150 00:18:00,000 --> 00:18:04,560 be starting getting some results out of that, and as they do start to come out and we start 151 00:18:04,560 --> 00:18:10,400 discussing those in either online surveys, which should come out in the end of January, 152 00:18:10,400 --> 00:18:15,760 and then our think tank/focus groups, which will occur in February and March, probably 153 00:18:15,760 --> 00:18:24,720 Marchish, will have very more intimate discussions on those results and that project specifically. 154 00:18:24,720 --> 00:18:30,520 Okay, that sounds great. Thanks very much, Brian. Thank you. I have a further question. 155 00:18:30,520 --> 00:18:38,120 Are you going to keep the breakdowns of the waste by residential, multifamily commercials 156 00:18:38,120 --> 00:18:49,320 so we know when we go to educate? Yes. Okay, good. Yes, okay. Thank you. Thank you. Any 157 00:18:49,320 --> 00:18:55,200 other questions? I think Barbara has a question. Oh, I'm sorry. Go ahead, Barbara. I just wanted 158 00:18:55,200 --> 00:19:03,880 to ask Brian, I noticed the other day that I saw a garbage truck going down some of the 159 00:19:03,880 --> 00:19:10,320 narrow streets and it was a smaller size that I haven't seen before. Do we now have some 160 00:19:10,320 --> 00:19:15,200 areas of Denton where the streets don't allow one of the big ones to go down? Do we have 161 00:19:15,200 --> 00:19:23,080 some smaller trucks now or have we always had? These are the mini-rearloaders which we bought 162 00:19:23,080 --> 00:19:31,000 to specifically address the valley service that was in the downtown area off Fry Street. 163 00:19:31,000 --> 00:19:40,960 They also do some other specific type of collections. They'll go on missed garbage so we don't have 164 00:19:40,960 --> 00:19:47,040 to send the big truck back, but they are used specific vehicles. Other than the downtown 165 00:19:47,040 --> 00:19:51,960 and Fry Street valley routes, they are not assigned to a specific route or a specific 166 00:19:51,960 --> 00:20:01,480 purpose or a specific need in the department itself. This was on Wainwright that I saw 167 00:20:01,480 --> 00:20:08,760 and it seemed like a good idea anyway. Just comment. Karen, did you have your hand up? 168 00:20:08,760 --> 00:20:13,320 Yeah, I just had a quick question. Brian, you just said that there was the valley service 169 00:20:13,320 --> 00:20:17,040 on Fry Street, so that's been expanded to Fry Street now? 170 00:20:17,040 --> 00:20:22,200 It was always that. After we got past the initial sort of pilot phase, we went into 171 00:20:22,200 --> 00:20:29,120 downtown and then into the Fry Street service area. So what Lucky Loos and the bar area 172 00:20:29,120 --> 00:20:34,880 in there, that's all been developed as part of the valley service because they were on 173 00:20:34,880 --> 00:20:39,280 shared dumpster service and it made more sense to break it down that way. 174 00:20:39,280 --> 00:20:45,080 Thanks. I didn't realize it had gone up into my neighborhood, so that's great. Thanks. 175 00:20:45,080 --> 00:20:52,600 You're welcome. All right, then are we on new business items, 176 00:20:52,600 --> 00:20:59,240 Tony? Ma'am. I've already covered... 177 00:20:59,240 --> 00:21:06,360 Okay. This zooming is getting so awkward. So we're on to concluding items. Does any board 178 00:21:06,360 --> 00:21:16,000 member wish to add another item to the agenda or say anything to staff? All right, then 179 00:21:16,000 --> 00:21:21,520 we'll move into work session. This item is to receive a report and hold a discussion 180 00:21:21,520 --> 00:21:27,000 and give staff direction regarding the potential sale of Texas and its power agencies Gibbons 181 00:21:27,000 --> 00:21:32,440 Creek steam electric station and related assets in Grimes County, Texas, including a review 182 00:21:32,440 --> 00:21:38,360 of the economics of the sale, the key provisions of the proposed asset purchase agreement and 183 00:21:38,360 --> 00:21:49,120 the risks associated therewith. Okay. Good morning, PB members. Terry Nalti, 184 00:21:49,120 --> 00:21:55,280 assistant general manager at DME and currently serving as interim director of water and wastewater. 185 00:21:55,280 --> 00:22:01,280 This presentation is intended to provide you an opportunity to see an overview of the proposed 186 00:22:01,280 --> 00:22:07,040 transaction as well as to answer any questions that you may have. This item will come back 187 00:22:07,040 --> 00:22:14,480 to you for final recommendation on the 25th and action will be taken by the council on 188 00:22:14,480 --> 00:22:34,240 the 26th. So with that, let me share my screen. Okay. Can everybody see that? Okay. So a little 189 00:22:34,240 --> 00:22:41,560 background about Gibbons Creek steam electric generating station. It is owned by four of 190 00:22:41,560 --> 00:22:46,720 the members of, sorry, it's owned by Texas municipal power agency. And you can see the 191 00:22:46,720 --> 00:22:56,880 ownership percentages where a 21.45% owner of the agency. The agency was formed to construct 192 00:22:56,880 --> 00:23:02,400 the Gibbons Creek power station as well as the transmission system to deliver power from 193 00:23:02,400 --> 00:23:10,240 the plant to the member cities. It's a 470 megawatt lignite coal fire generator. Just 194 00:23:10,240 --> 00:23:19,680 for comparison purposes, the Denton energy center is a 225 megawatt gas fired unit. The 195 00:23:19,680 --> 00:23:28,680 property itself around the power plant is 6,170 acres, including the 2200 acre Gibbons 196 00:23:28,680 --> 00:23:36,200 Creek reservoir. It did operate for 35 years. It was shut down in 2018 based upon economics, 197 00:23:36,200 --> 00:23:41,760 could not compete in the wholesale market. And since that time it has been, staff has 198 00:23:41,760 --> 00:23:51,040 been doing a number of studies around decommissioning and shutdown of the facility. This is an overview 199 00:23:51,040 --> 00:24:00,060 of the site itself. If you can see the power plant itself is right in this area. There 200 00:24:00,060 --> 00:24:09,480 are a number of coal combustion residual units or CCR units. These are the units where coal 201 00:24:09,480 --> 00:24:17,680 ash was managed during the operation of the facility. We have the coal ash ponds where 202 00:24:17,680 --> 00:24:24,000 the ash was conveyed. And then it was transported to one of the two landfill sites for permanent 203 00:24:24,000 --> 00:24:31,400 disposal. We also have a scrubber sludge pond. The scrubber was used to remove sulfur dioxide 204 00:24:31,400 --> 00:24:37,520 from the flue gas stream and produced at waste. All four of these sites are considered coal 205 00:24:37,520 --> 00:24:47,480 combustion residual sites. So each of these sites are subject to EPA regulations. Those 206 00:24:47,480 --> 00:24:56,120 regulations will require TMPA or the buyer to clean close or close the facilities consistent 207 00:24:56,120 --> 00:25:03,640 with the regulations. And we estimate the cost of those to be $88 million of remediation 208 00:25:03,640 --> 00:25:12,240 costs. In addition to that, the regulations require ongoing monitoring, sampling and reporting. 209 00:25:12,240 --> 00:25:18,840 That is estimated at $500,000 a year for the next 30 years. So $15 million of additional 210 00:25:18,840 --> 00:25:24,640 ongoing costs. And then there are some ongoing operations costs for the dam and natural gas 211 00:25:24,640 --> 00:25:32,460 pipeline that goes through the site. The sale process, there was a request for proposal 212 00:25:32,460 --> 00:25:42,400 issued in June of 2019. That RFP required the respondents to decommission the plant and 213 00:25:42,400 --> 00:25:50,880 remediate all the CCR units and to provide certain financial security to assure that 214 00:25:50,880 --> 00:25:57,720 the cleanup would be done and a demolition would be done in accordance with the requirements. 215 00:25:57,720 --> 00:26:05,680 So there's two phases to the work. Phase one is the actual decommissioning and remediation. 216 00:26:05,680 --> 00:26:12,020 That is covered by a surety bond. And then the post closure activities which are covered 217 00:26:12,020 --> 00:26:21,320 by another surety bond called the post closure bond. Five proposals were received. The board 218 00:26:21,320 --> 00:26:29,440 of TMPA directed staff to begin working with one of the groups, Chara Melt Solutions who 219 00:26:29,440 --> 00:26:36,080 have formed the Gibbons Creek environmental redevelopment group and they've been negotiating 220 00:26:36,080 --> 00:26:44,160 a transaction with this group for the last year. The original transaction included the 221 00:26:44,160 --> 00:26:52,520 potential of restarting the coal fired power plant. That option has gone away and the current 222 00:26:52,520 --> 00:26:57,560 deal requires a demolition of the coal plant and retains the economics of the original 223 00:26:57,560 --> 00:27:08,800 deal. So there will not be any coal fire generation at the site in the future. The TMPA board 224 00:27:08,800 --> 00:27:18,320 approved the asset purchase agreement on December 10th and subsequent to that time, the members 225 00:27:18,320 --> 00:27:25,760 recommended the extension of the pollution liability insurance beyond the four years 226 00:27:25,760 --> 00:27:33,560 of that are in the asset purchase agreement to 10 years, so additional six years. We thought 227 00:27:33,560 --> 00:27:41,960 it was a good risk reward trade off and that amendment was approved by the TMPA board last 228 00:27:41,960 --> 00:27:47,760 week on the seventh. The remediation project and decommissioning is anticipated to save 229 00:27:47,760 --> 00:27:55,320 in excess of $48 million as compared to self performance of the remediation and demolition 230 00:27:55,320 --> 00:28:02,160 activities. And I'll get into the specifics of the economics in a minute. The joint ownership 231 00:28:02,160 --> 00:28:08,320 or sorry, joint operating agreement, which is the document that's been signed by the 232 00:28:08,320 --> 00:28:16,120 four members requires that all cities approve the transaction for it to move forward and 233 00:28:16,120 --> 00:28:24,000 you and you will see a concurrent ordinance that will be provided for your review and 234 00:28:24,000 --> 00:28:30,640 recommendation on the 25th. That concurrent ordinance is an identical document that will 235 00:28:30,640 --> 00:28:39,160 be executed by all four cities. The buyer is Gibbons Creek Environmental Redevelopment 236 00:28:39,160 --> 00:28:46,400 Group. It is a wholly owned subsidiary of Chara Solutions. It's a Texas limited liability 237 00:28:46,400 --> 00:28:54,520 corporation. Chara Solutions is a publicly traded company with over half a billion dollars 238 00:28:54,520 --> 00:29:01,640 of revenues in 2019. They are the preeminent and leading provider of coal combustion by 239 00:29:01,640 --> 00:29:08,360 product management in North America. They're doing this type of work at various sites throughout 240 00:29:08,360 --> 00:29:15,760 the US and they also provide ash management, O&M services to many electric utilities and 241 00:29:15,760 --> 00:29:26,000 they do nuclear O&M as well. However, from a risk perspective, the deal team thought 242 00:29:26,000 --> 00:29:32,480 it was important to ensure that the performance under the contract was fully securitized and 243 00:29:32,480 --> 00:29:39,920 not dependent upon the financial wherewithal of Chara Corporation on a going basis. So 244 00:29:39,920 --> 00:29:45,000 there are performance bonds, pollution liability insurance and post-closure bonds that are 245 00:29:45,000 --> 00:29:53,160 independently securitized to ensure that the work gets done properly, regardless of what 246 00:29:53,160 --> 00:30:03,200 happens with Chara. The major terms of the agreement for TMPA, Chara assumes all the 247 00:30:03,200 --> 00:30:11,920 environmental liabilities. They indemnify a TMPA. They will remediate all the CCRs and 248 00:30:11,920 --> 00:30:18,740 decommission the plant. They will issue a performance bond or obtain a performance bond 249 00:30:18,740 --> 00:30:28,140 of $36.5 million. That bond will be reduced as the remediation work is completed down 250 00:30:28,140 --> 00:30:33,160 to a level of $2.84 million, which will be retained as security until the post-closure 251 00:30:33,160 --> 00:30:44,480 bond is delivered. Post-closure bonding will be compliant with the requirements of TCEQ. 252 00:30:44,480 --> 00:30:50,880 There are special warranty deeds that extend to the particular pieces of property in which 253 00:30:50,880 --> 00:30:58,080 there are CCR units so as to not disturb the waste in the future. There is a $25 million 254 00:30:58,080 --> 00:31:06,480 water pollution liability insurance, naming TMPA and the cities as additional insured, 255 00:31:06,480 --> 00:31:15,600 and then we are express beneficiaries of all the obligations. What does Chara's GCERG get? 256 00:31:15,600 --> 00:31:22,200 They get 6,200 acres, including all the structures, the reservoir and all equipment on the site. 257 00:31:22,200 --> 00:31:29,520 They receive an initial payment from TMPA of $6.5 million. And then we fund, TMPA funds 258 00:31:29,520 --> 00:31:37,680 an environmental escrow payment of $28.5 million. And that's to fund the remediation projects. 259 00:31:37,680 --> 00:31:45,560 As I mentioned, the draws on that escrow will be based upon progress over a 34-month period, 260 00:31:45,560 --> 00:31:51,720 and it's controlled by an environmental designee that's appointed by TMPA. And then we also 261 00:31:51,720 --> 00:32:02,360 pay 50% of the initial performance bond. So here's the economics of the transaction. 262 00:32:02,360 --> 00:32:08,600 As you can see, this first table on the left compares three scenarios. Scenario one is 263 00:32:08,600 --> 00:32:14,800 the transaction that's in front of you today. Scenario two envisions a potential default 264 00:32:14,800 --> 00:32:22,280 of Chara. See Gibbons Creek Environmental Redevelopment Corporation sometime during the remediation 265 00:32:22,280 --> 00:32:32,800 activities. And scenario three is the self-performance by TMPA. So you can see in the table the out-of-pocket 266 00:32:32,800 --> 00:32:42,400 cost to TMPA is $36.63 million for scenario one, the current transaction in front of you. 267 00:32:42,400 --> 00:32:48,800 In event of a default, we estimate our out-of-pocket cost to be $78.9 million. And if we were to 268 00:32:48,800 --> 00:32:55,380 perform the remediation ourselves, out-of-pocket costs of about $84.6 million, that results 269 00:32:55,380 --> 00:33:05,080 in the savings of $48 million of option one compared to option three. For Denton, this 270 00:33:05,080 --> 00:33:16,620 represents a $10.3 million savings as compared to what we've budgeted in, I'm sorry, a $10.3 271 00:33:16,620 --> 00:33:23,200 million savings as compared to the self-performance. So our share of the self-performance versus 272 00:33:23,200 --> 00:33:29,460 our share of the current transaction in front of you results in a $10.3 million savings 273 00:33:29,460 --> 00:33:38,520 to the rate payers. So the five-year forecasted savings for City Denton are about $13.57 as 274 00:33:38,520 --> 00:33:47,100 we had $21.3 million budgeted over the next five years for remediation and decommissioning. 275 00:33:47,100 --> 00:33:53,840 For the fiscal year we're in currently, we project a savings of $1.8 million. We had 276 00:33:53,840 --> 00:34:01,720 budgeted $9.5 million. Our out-of-pocket cost is $7.75 million, and that represents a $1.8 277 00:34:01,720 --> 00:34:09,600 million savings in this fiscal year. Risk management is a key aspect of the transaction 278 00:34:09,600 --> 00:34:16,400 because of the liability associated with these wastes that have been disposed of at the site. 279 00:34:16,400 --> 00:34:23,480 So land use is a question that has come up. And as I mentioned, we will have perpetual 280 00:34:23,480 --> 00:34:28,600 deed restrictions that will be placed on the CCR units to limit the future land use and 281 00:34:28,600 --> 00:34:35,920 avoid any disturbance of the waste. To the extent any of these particular parcels that 282 00:34:35,920 --> 00:34:43,200 have CCR units on them are transferred, TMPA retains a veto right to the extent that the 283 00:34:43,200 --> 00:34:48,720 new buyer didn't meet the deed restrictions and insurance requirements. The rest of the 284 00:34:48,720 --> 00:34:55,300 property will be assessed over the coming months as to whether it's clean or dirty. 285 00:34:55,300 --> 00:35:01,720 Clean meaning there are no known environmental contaminants on the site. Dirty would be anything 286 00:35:01,720 --> 00:35:08,520 that does have identified contamination on the site. We don't expect that any of the 287 00:35:08,520 --> 00:35:14,440 other sites will have contamination. But if they do, the same type of deed restrictions 288 00:35:14,440 --> 00:35:23,240 would be imposed upon those sections that contamination would be discovered on. 289 00:35:23,240 --> 00:35:28,160 Accountability is key. So as I mentioned, we're appointing an environmental representative 290 00:35:28,160 --> 00:35:34,360 to monitor and audit the site activities. And that environmental representative will 291 00:35:34,360 --> 00:35:47,240 be the person that will be verifying the progress of the contractor of Chara to the milestones 292 00:35:47,240 --> 00:35:56,900 for the cleanup schedule. And then we'll release funds from the escrow accordingly. 293 00:35:56,900 --> 00:36:04,120 So in summary, it does represent this transaction represents a savings of about $48 million 294 00:36:04,120 --> 00:36:11,840 to the members. For us, it's a $10 million savings versus the current plan. And it represents 295 00:36:11,840 --> 00:36:21,040 the savings of $1.83 million in this fiscal year, $13.5 million versus the five-year plan. 296 00:36:21,040 --> 00:36:27,760 Most importantly, the environmental risk profile is significantly reduced. And we don't have 297 00:36:27,760 --> 00:36:36,520 any of the ongoing, as I mentioned, that $15 million projected 30-year cost of monitoring, 298 00:36:36,520 --> 00:36:45,080 record-keeping, and reporting. That all now becomes an obligation of the buyer. There 299 00:36:45,080 --> 00:36:51,400 is an additional 10,000-plus acres of mineland that's adjacent to the property that's being 300 00:36:51,400 --> 00:36:58,360 sold that is owned by TMPA. That tract of land will be taken up by the TMPA board at 301 00:36:58,360 --> 00:37:03,440 a later date for final determination of what will be done with that. That is not part of 302 00:37:03,440 --> 00:37:13,180 this posting today. And importantly, we will retain all the transmission assets on the 303 00:37:13,180 --> 00:37:19,400 plant site. They are a significant investment and have a lot of value. So TMPA will retain 304 00:37:19,400 --> 00:37:26,640 all those transmission assets. And that concludes my presentation. I do have on the phone with 305 00:37:26,640 --> 00:37:35,400 me four people from TMPA. Bob Kahn, the general manager of TMPA; Carl Shehady, the attorney 306 00:37:35,400 --> 00:37:42,960 for TMPA; Al Axe, the environmental attorney for TMPA; and Robert McCormick, the primary 307 00:37:42,960 --> 00:37:49,880 transaction attorney on this transaction. With that, I will stop sharing and will be glad 308 00:37:49,880 --> 00:37:51,720 to answer any questions. 309 00:37:51,720 --> 00:37:56,160 Right. Questions of the board? Yes, Karen, go ahead. 310 00:37:56,160 --> 00:38:01,520 Hi, Terry. Thanks. It's clear on fourth reading of all this is much clearer to me, but my 311 00:38:01,520 --> 00:38:10,280 initial reaction was I was wondering why TMPA was paying into an escrow account to guarantee 312 00:38:10,280 --> 00:38:16,800 the behavior of somebody else. Why would that be called an escrow account? 313 00:38:16,800 --> 00:38:23,040 It's an escrow account only because it's money that's put aside to cover the remediation 314 00:38:23,040 --> 00:38:29,560 activities. We control the escrow to put in an escrow so that it can only be used for 315 00:38:29,560 --> 00:38:37,480 that prescriptive purpose and it will be drawn down as the project is completed. 316 00:38:37,480 --> 00:38:40,760 But it's guaranteeing the behavior of CHARA. 317 00:38:40,760 --> 00:38:46,800 Yeah. I'll ask Bob or Robert to answer that question. 318 00:38:46,800 --> 00:38:50,360 Sorry, I'm just going to figure out the terms. 319 00:38:50,360 --> 00:38:54,240 Yeah, sure. Terry, can you hear me? 320 00:38:54,240 --> 00:38:56,600 Yes, sir. Go ahead, Bob. 321 00:38:56,600 --> 00:39:03,920 Okay. Yeah, Bob Kahn, general manager of TMPA. Yeah, the escrow account, we put it in an 322 00:39:03,920 --> 00:39:09,240 escrow because we don't want to just get in the money. We don't want them to use it for 323 00:39:09,240 --> 00:39:16,800 other purposes. So it guarantees that they'll only use it to remediate the plant site. And 324 00:39:16,800 --> 00:39:22,360 as Terry indicated, we have an environmental designee who will be going out there. That 325 00:39:22,360 --> 00:39:28,760 person works for us to make sure that they've completed the work and on schedule. And as 326 00:39:28,760 --> 00:39:34,560 they complete the work on schedule, then they will get paid. If they don't complete the 327 00:39:34,560 --> 00:39:39,120 work, they don't get paid. Okay. 328 00:39:39,120 --> 00:39:46,240 Does that answer your question? Yeah. I was just kind of wondering of the terminology 329 00:39:46,240 --> 00:39:53,920 of escrow. Since that's usually my experience with escrow accounts is when I had slacker 330 00:39:53,920 --> 00:40:04,400 landlords that I've had to withhold rent from. Sorry. I was a graduate student once and so 331 00:40:04,400 --> 00:40:10,000 it was to guarantee my... I had an escrow account to guarantee my behavior that I would 332 00:40:10,000 --> 00:40:14,960 pay the rent if necessary. And so I was just wondering why this was called an escrow since 333 00:40:14,960 --> 00:40:20,840 it's guaranteeing Chara's behavior. But I guess that makes sense. We don't pay them 334 00:40:20,840 --> 00:40:25,200 unless they behave well. Correct. 335 00:40:25,200 --> 00:40:29,560 Thank you. Thanks for clearing that up. Other questions. Go ahead, Ed. 336 00:40:29,560 --> 00:40:35,760 Yeah. Bear with me. I've got a list here. One thing I noticed in the presentation that 337 00:40:35,760 --> 00:40:42,160 there was really no indication of the extent of pollution at this facility. And I think 338 00:40:42,160 --> 00:40:49,600 that would be good to know because it has a bearing, of course, on the remediation process. 339 00:40:49,600 --> 00:40:55,440 What I found just doing some research, I found that in January of 2019, an outfit called 340 00:40:55,440 --> 00:41:03,320 the Environmental Integrity Project did a study on groundwater contamination from Texas coal 341 00:41:03,320 --> 00:41:13,960 ash dumps. And it specifically deals with Gibbons Creek and has measurements, et cetera. 342 00:41:13,960 --> 00:41:23,040 But just briefly as an overview, all of the ash ponds were constructed in 1977 as we know, 343 00:41:23,040 --> 00:41:29,960 and none of them meets the liner criteria of the coal ash rule. So they are formally 344 00:41:29,960 --> 00:41:39,160 considered "unlined." Because of that, all three coal ash units are on or close to the 345 00:41:39,160 --> 00:41:47,500 shore of the reservoir at Gibbons Creek. And as we know, the reservoir also serves as a 346 00:41:47,500 --> 00:41:54,800 recreational fishing area. And the report says that all three coal ash units at Gibbons 347 00:41:54,800 --> 00:42:01,720 Creek are contaminating the groundwater. And this is detailed in the report with measurements 348 00:42:01,720 --> 00:42:09,960 of the pollutants. "Are contaminating the groundwater most or all of the contaminated 349 00:42:09,960 --> 00:42:16,240 groundwater eventually discharges into Gibbons Creek Reservoir where it threatens aquatic 350 00:42:16,240 --> 00:42:23,440 life and human life through any fish that are caught and consumed." So I think it's 351 00:42:23,440 --> 00:42:33,080 important to know the scope of this project by understanding a little more what has to 352 00:42:33,080 --> 00:42:46,080 be remediated. So I would like at some point to see a detailed paper or report on remediation 353 00:42:46,080 --> 00:42:54,160 targets and the timeline that goes with it. I assume that there is such a plan. 354 00:42:54,160 --> 00:43:04,200 Yes, Mr. Sofe, there is. TMPA has done extensive studies by engineering firms and environmental 355 00:43:04,200 --> 00:43:15,720 firms to assess the extent of the limits of the CCR units. And the remediation project 356 00:43:15,720 --> 00:43:23,560 itself involves the removal of any residual materials from the ash pond, from scrubber 357 00:43:23,560 --> 00:43:35,320 sludge ponds, and then places them into permanent disposal sites in landfill F. And so that 358 00:43:35,320 --> 00:43:46,920 landfill will be closed in accordance with TCEQ requirements. There will be ongoing groundwater 359 00:43:46,920 --> 00:43:54,880 monitoring reporting and any action that would be required would be consistent with the regulations. 360 00:43:54,880 --> 00:44:02,680 So as you're probably aware, TMPA posts all the information regarding its CCR units on 361 00:44:02,680 --> 00:44:10,280 its website. It's a requirement under the CCR rules. And the site is in compliance with 362 00:44:10,280 --> 00:44:17,520 those regulations at the current time. Bob, do you want to add anything? Or do you want 363 00:44:17,520 --> 00:44:24,720 Alan to add anything? No, I mean, everything you said is correct. 364 00:44:24,720 --> 00:44:37,040 We are in compliance. TCEQ monitors our website and we file reports with them. As far as the 365 00:44:37,040 --> 00:44:42,680 cleanup goes, we do have a detailed schedule attached to the asset purchase agreement that 366 00:44:42,680 --> 00:44:49,880 requires them to remediate it in a certain manner. And they will have to get signed off 367 00:44:49,880 --> 00:45:00,400 by TCEQ before they can complete the project. Thank you. Is that schedule posted on the 368 00:45:00,400 --> 00:45:07,160 TMPA website? It's actually an attachment to the documents 369 00:45:07,160 --> 00:45:17,440 that you received, Mr. Sofe. There is a schedule on the asset purchase agreement. One of the 370 00:45:17,440 --> 00:45:23,600 attachments is there. Okay, thanks. Can I continue or do you? 371 00:45:23,600 --> 00:45:29,840 Absolutely. Go ahead. Okay. In reading the purchase agreement, obviously 372 00:45:29,840 --> 00:45:37,200 I didn't go down far enough. I would have answered my first question. But I think to 373 00:45:37,200 --> 00:45:46,760 go back to that, I think it's crucial that maybe council should know that that schedule 374 00:45:46,760 --> 00:45:54,720 is on there just for transparency's sake. Because a lot of stuff, I mean, people are 375 00:45:54,720 --> 00:46:01,880 often put off by these things. The second thing I wanted to ask about is 376 00:46:01,880 --> 00:46:17,140 in reading the purchase agreement under section 5.10, a phrase jumped out at me which is this. 377 00:46:17,140 --> 00:46:24,900 After closing, purchaser covenants that it will, I immediately begin and diligently pursue 378 00:46:24,900 --> 00:46:33,700 in a commercially reasonable manner. That phrase, commercially reasonable manner is 379 00:46:33,700 --> 00:46:40,400 not defined in the definitions of the document. And the reason why this stuck out to me is 380 00:46:40,400 --> 00:46:45,260 because House Bill 40, which was the state law that was 381 00:46:45,260 --> 00:46:56,940 He froze. Or I froze. Passed what? We missed part of what you said. You were 382 00:46:56,940 --> 00:47:03,200 frozen. At least from my perspective. Oh, I'm sorry. Should I go back to the beginning? 383 00:47:03,200 --> 00:47:06,600 Did you get the commercially responsible clause? Yes, you did that part. Yep. 384 00:47:06,600 --> 00:47:08,700 Okay. And the reason why- HB 4. 385 00:47:08,700 --> 00:47:13,500 HB 40. When you froze for me. Yeah, okay. House Bill 40, which banned 386 00:47:13,500 --> 00:47:22,660 Denton's fracking ban, had a similar phrase. However, in the House Bill 40 document, that 387 00:47:22,660 --> 00:47:32,040 phrase was defined. And this phrase is not defined in this document. And I think it's 388 00:47:32,040 --> 00:47:37,920 pretty crucial to do that because for obvious reasons. 389 00:47:37,920 --> 00:47:45,460 So Mr. Sof, I'm going to defer to the attorneys, but I will say that I've done a lot of transactions 390 00:47:45,460 --> 00:47:50,980 in the power space and commercially reasonable measures is a term of art, a legal term of 391 00:47:50,980 --> 00:48:00,700 art. It has meaning under the Uniform Commercial Code. And with that, I would ask one of the 392 00:48:00,700 --> 00:48:11,900 attorneys, either Carl or Robert to weigh in on that. Robert, can you handle that, please? 393 00:48:11,900 --> 00:48:23,780 Certainly. So the standard commercially reasonable matter is a term that not only in the environmental 394 00:48:23,780 --> 00:48:33,900 space, but really in contracting in general, is a commonly used term such as diligent manner 395 00:48:33,900 --> 00:48:43,060 or best efforts or something like that. So it is generally used to make sure that whoever's 396 00:48:43,060 --> 00:48:53,700 performing a particular task is doing so continuously with an aim to getting it done. And it's 397 00:48:53,700 --> 00:49:02,460 it's used in this section in particular, simply because TNPA wanted to make sure that CHARA 398 00:49:02,460 --> 00:49:12,020 when they were out doing their environmental closure and post-closure compliance obligations, 399 00:49:12,020 --> 00:49:21,300 were doing it in a in a reasonable manner, consistent with generally applicable standards 400 00:49:21,300 --> 00:49:31,020 in the industry. And so that would include compliance with all laws and pursuing it. 401 00:49:31,020 --> 00:49:37,660 So you'll also see other information or other language in those same phrases. So they're 402 00:49:37,660 --> 00:49:44,380 diligently pursuing not only in a commercially reasonable manner, but also in accordance 403 00:49:44,380 --> 00:49:48,580 with the project schedule. And that's the schedule that you were previously referred 404 00:49:48,580 --> 00:49:57,300 to as being attached to the asset purchase agreement. So that's that 34 month project 405 00:49:57,300 --> 00:50:07,460 schedule beginning on the closing date and then going out from there. So I hope that 406 00:50:07,460 --> 00:50:12,060 answers your question. If not, I'm happy to address it further. 407 00:50:12,060 --> 00:50:18,420 No, thank you very much. I still think it should be defined in the document. And I think 408 00:50:18,420 --> 00:50:24,780 that I see no reason why it can't be expanded to reading commercially and environmentally 409 00:50:24,780 --> 00:50:31,780 reasonable. 410 00:50:31,780 --> 00:50:41,140 Environmentally reasonable would be a term to use simply because it doesn't really have 411 00:50:41,140 --> 00:50:52,260 any meaning in general accepted use. So it's all we can say is really that it's commercial 412 00:50:52,260 --> 00:51:01,620 that it is in compliance with environmental laws. And then we assume that the laws are 413 00:51:01,620 --> 00:51:06,620 environmentally reasonable. Right. And that is that is their standard. 414 00:51:06,620 --> 00:51:19,180 Right. But the point I'm making is that it's just as ambiguous as commercial is. The next 415 00:51:19,180 --> 00:51:26,980 thing I'd like to address is there's talk of Texas is trying to as you know, Texas is 416 00:51:26,980 --> 00:51:37,860 trying to get from the EPA the ability to do it's basically its own policing of coal ash. And there's 417 00:51:37,860 --> 00:51:43,340 also the possibility that with a new administration that is perhaps a little more environmentally 418 00:51:43,340 --> 00:51:49,300 conscious than the last one, that there will be further strengthening of federal regulations 419 00:51:49,300 --> 00:52:00,220 or coal ash remediation. So I'm my question is, is that a consideration in this in this 420 00:52:00,220 --> 00:52:06,380 remediation document? The possibility of these changes? 421 00:52:06,380 --> 00:52:14,780 Yeah, Mr. Sof, this is a question that was asked by council as well. And, you know, the 422 00:52:14,780 --> 00:52:22,900 normal course of regulatory matters, state versus federal is that a federal regulation 423 00:52:22,900 --> 00:52:31,060 becomes enforced by the state after primacy is granted to the state once they demonstrate 424 00:52:31,060 --> 00:52:37,860 that their program is at least as stringent as the federal requirements. And in this case, 425 00:52:37,860 --> 00:52:44,980 the the request by TCEQ to take over primacy for this program does meet that standard. 426 00:52:44,980 --> 00:52:53,260 It is at least as stringent. The state agency having primacy over the program allows specific 427 00:52:53,260 --> 00:53:00,500 state issues, concerns that an individual state may have that could warrant regulations 428 00:53:00,500 --> 00:53:08,220 that are more stringent than the federal regulations. It allows the state regulatory agencies to 429 00:53:08,220 --> 00:53:14,480 promulgate those more stringent regulations. So it is a what I would term a normal course 430 00:53:14,480 --> 00:53:24,380 of business and regulatory matters for this to happen. And then I would ask Bob or Al 431 00:53:24,380 --> 00:53:30,420 to weigh in on what would happen under the terms of the agreement if the regulations 432 00:53:30,420 --> 00:53:38,860 became more stringent. Well, I'll try that in the first instance. 433 00:53:38,860 --> 00:53:44,940 The agreement requires them to do everything consistent with all the laws, whatever they 434 00:53:44,940 --> 00:53:52,620 happen to be at the time. So if they change regulations, it's not unusual for regulations 435 00:53:52,620 --> 00:54:02,860 to change over the years and travel will just have to follow whatever the requirements are. 436 00:54:02,860 --> 00:54:10,420 Does that answer your question, Mr. Sof? Yes, it does. And thank you. Is there any it will 437 00:54:10,420 --> 00:54:21,940 there be any transparency with the buyer on on the uses of the land that it might sell? 438 00:54:21,940 --> 00:54:28,700 So under the terms of the agreement, there's no such requirement, with the exception of 439 00:54:28,700 --> 00:54:38,140 the warranty deeds that I've mentioned previously. You know, the the buyer is not precluded from 440 00:54:38,140 --> 00:54:44,100 using the property for whatever purposes it intends to as long as they're consistent with 441 00:54:44,100 --> 00:54:52,420 Grimes County land use requirements, much as we would when we sell a home, we don't 442 00:54:52,420 --> 00:54:59,660 impose new restrictions on the buyer of our homes. Once the new owner owns the home, it's 443 00:54:59,660 --> 00:55:06,900 up to them to do what they will with the property. I think the same would would hold true here. 444 00:55:06,900 --> 00:55:14,460 We have requested at the behest of counsel from the buyer some direction if they're willing 445 00:55:14,460 --> 00:55:22,860 to share on future uses for the property and we will be issuing a ISR Friday report summary 446 00:55:22,860 --> 00:55:30,780 of what what that response is. Can I ask a question and just following up? And is that 447 00:55:30,780 --> 00:55:39,420 why we're doing the dirty versus the clean? Because if it had ash there before, we don't 448 00:55:39,420 --> 00:55:44,300 want to allow them to sell that land to someone because we will still be held responsible 449 00:55:44,300 --> 00:55:49,580 under the cradle to grave was with circular. Is that correct? 450 00:55:49,580 --> 00:55:54,980 That is correct, essentially correct. And for just for clarification purposes, you know, 451 00:55:54,980 --> 00:56:01,140 there are four parcels that have these CCR units, potentially six other parcels that 452 00:56:01,140 --> 00:56:07,780 do not. It's not CCR waste that we would be concerned about. It's other types of contamination 453 00:56:07,780 --> 00:56:14,300 that may have occurred. That's the the focus of the clean versus dirty determination. 454 00:56:14,300 --> 00:56:26,820 Okay. All right. Thank you. I just have one more question, please. And that is, what exactly 455 00:56:26,820 --> 00:56:34,700 is an environmental representative? Is he a scientist, an engineer? Are there certain 456 00:56:34,700 --> 00:56:41,240 qualifications that that person has to have? I'm curious as to what a job description for 457 00:56:41,240 --> 00:56:48,220 an environmental representative is? Yes, I'll ask Bob to give you the specifics 458 00:56:48,220 --> 00:56:53,740 on the individual that TMPA has hired to fill that role. Thanks. 459 00:56:53,740 --> 00:57:01,700 Sure. Sure. Can y'all hear me? I just want to make sure I'm not muted. Okay. So we hired 460 00:57:01,700 --> 00:57:09,660 somebody his name is Joe Schultz. He's a engineer. And he's been working for us for many, many 461 00:57:09,660 --> 00:57:22,000 years. He worked on our landfills. He's very familiar with what's going on at TMPA environmentally. 462 00:57:22,000 --> 00:57:29,100 And so he will be the environmental destiny that is in charge of making sure they get 463 00:57:29,100 --> 00:57:37,340 stuff done. We also have somebody that works directly for TMPA. His name is Daniel Metals. 464 00:57:37,340 --> 00:57:43,900 He's an engineer. He's our compliance officer. And he's very familiar with all the environmental 465 00:57:43,900 --> 00:57:51,940 laws also. And he is going to be more of the hands on going out there, making sure they're 466 00:57:51,940 --> 00:57:58,140 clean closing or remediating the way they're supposed to. And he's been very close to this 467 00:57:58,140 --> 00:58:03,340 agreement as far as what's required as far as remediating. 468 00:58:03,340 --> 00:58:11,420 Great. Thank you very much. Yes, Barbara. Go ahead. 469 00:58:11,420 --> 00:58:20,180 If this property, if the entity that's looking to purchase it, if they come up with a buyer, 470 00:58:20,180 --> 00:58:28,220 the title search would turn up that there was the history of this. So that would be 471 00:58:28,220 --> 00:58:36,260 called to the attention of the next buyer. I mean, that would be fully, you'd have to 472 00:58:36,260 --> 00:58:42,660 be, it would be disclosed because it would be in the title search. Is that not correct? 473 00:58:42,660 --> 00:58:48,740 I'll have to defer to one of the lawyers. I'm not a real estate expert. 474 00:58:48,740 --> 00:58:59,660 Robert, do you want to handle that? Certainly. You are correct. The warranty 475 00:58:59,660 --> 00:59:07,620 deeds that we put in place have references back to Char's obligations to remediate the 476 00:59:07,620 --> 00:59:17,500 property and to indemnify TMPA and the member cities for environmental obligations. So those 477 00:59:17,500 --> 00:59:24,380 obligations will be recorded in the chain of title through the warranty deeds that we 478 00:59:24,380 --> 00:59:35,300 were recording at closing. And that's the primary purpose for having the forms of warranty 479 00:59:35,300 --> 00:59:42,820 deeds that we have in place now, both for the quote unquote dirty parcels and for the 480 00:59:42,820 --> 00:59:52,340 clean both of them, both forms disclose the ongoing release of indemnity obligations with 481 00:59:52,340 --> 01:00:04,860 respect to TMPA. Other questions? Yes. Karen, this isn't, 482 01:00:04,860 --> 01:00:09,320 I just had a question about the ladies trust is orchid. I know that's not on the land that's 483 01:00:09,320 --> 01:00:15,940 under consideration. It's on the mine land. So is that what's the status of that orchid? 484 01:00:15,940 --> 01:00:25,200 Is that a federally protected plant or a state protected plant or just a plant of interest? 485 01:00:25,200 --> 01:00:29,820 My understanding is that it is a federally protected species. 486 01:00:29,820 --> 01:00:37,500 So that's what we do with the mine land. Potentially. You know, there are conservation 487 01:00:37,500 --> 01:00:44,220 easements in place where at least five conservation easements that are in place where those orchids 488 01:00:44,220 --> 01:00:53,280 are found. And what happens with those conservation easements will be determined by whatever the 489 01:00:53,280 --> 01:01:00,020 ultimate disposition of the properties are, whether they're sold. You know, three of the 490 01:01:00,020 --> 01:01:06,580 five areas I understand are on lease properties. And once the leases expire, those will revert 491 01:01:06,580 --> 01:01:11,980 back to the landowners from whom we've leased the property. 492 01:01:11,980 --> 01:01:26,340 Okay. Thanks. Other questions? Discussion? Charlie, go ahead. 493 01:01:26,340 --> 01:01:35,420 Terry, within the city of Denton, who are the folks that are most in the detail on monitoring 494 01:01:35,420 --> 01:01:41,900 this agreement and following it through and reviewing? Would that be you? 495 01:01:41,900 --> 01:01:47,500 That would be me, yes, sir. Okay. And how many hours would you say you've 496 01:01:47,500 --> 01:01:55,380 spent working on this? Boy, that's hard to say. You know, TMPA has 497 01:01:55,380 --> 01:02:01,800 a number of committees, and this has been the primary focus of most of the TMPA activities 498 01:02:01,800 --> 01:02:08,520 over the last year and a half. So, you know, we meet at least quarterly as the planning 499 01:02:08,520 --> 01:02:15,860 and operations group. There's the financial working group. There have been a number of 500 01:02:15,860 --> 01:02:23,620 meetings to discuss the status of the transaction. I know Larry Collister has been involved with 501 01:02:23,620 --> 01:02:30,420 the attorneys at length. So the city has invested a significant amount of time. I would say, 502 01:02:30,420 --> 01:02:37,460 you know, I know personally I've spent well over 40 hours in the last year specifically 503 01:02:37,460 --> 01:02:43,540 working on this particular transaction. Charlie, I would also point out that Mr. Billy 504 01:02:43,540 --> 01:02:51,780 Cheek is also appointed to the TMPA board, as well as Chris Watts. Chris' term will expire 505 01:02:51,780 --> 01:03:00,700 later this year and Billy in 2022. But they have also been heavily involved as part of 506 01:03:00,700 --> 01:03:05,460 their responsibilities on TMPA board directors. Thank you for that follow-up. That was going 507 01:03:05,460 --> 01:03:09,620 to be my next question so that people can understand we've had representation for a 508 01:03:09,620 --> 01:03:13,660 very long time. So as a volunteer board member who is not 509 01:03:13,660 --> 01:03:21,660 an attorney or familiar with all of the environmental applications and the financial implications, 510 01:03:21,660 --> 01:03:28,500 I feel very comfortable with Terry being our point man and doing what's best for the people 511 01:03:28,500 --> 01:03:37,540 of Denton. And so I appreciate knowing that. Did I hear you say, Terry, that the plant 512 01:03:37,540 --> 01:03:43,300 shut down because it was not able to compete in the wholesale market at the time? 513 01:03:43,300 --> 01:03:49,100 That's correct. Would I generally believe coal is the cheapest 514 01:03:49,100 --> 01:03:56,660 power available? Is it just that the environmental compliance is expensive enough that it was 515 01:03:56,660 --> 01:04:01,740 no longer economically feasible to operate the plant? 516 01:04:01,740 --> 01:04:06,780 Amongst other things, yes. But you think about a coal plant. A coal plant is generally a 517 01:04:06,780 --> 01:04:14,540 base load facility, runs around the clock at a fairly high output level. And as I think, 518 01:04:14,540 --> 01:04:20,700 Mr. Parker, you have come to realize at night these prices are very, very low. So that unit 519 01:04:20,700 --> 01:04:29,340 operating at a minimum level would be losing money every hour of the night and many hours 520 01:04:29,340 --> 01:04:39,500 during the day as it was operating, variable cost being above the wholesale market. And 521 01:04:39,500 --> 01:04:46,820 then on top of that, you'd have to add the fixed cost for debt and other depreciation 522 01:04:46,820 --> 01:04:54,700 expense, other financial expenses. So that's in general coal fire generation does not compete 523 01:04:54,700 --> 01:05:00,300 well in the Texas market. And quite frankly, doesn't compete well anywhere in the US today 524 01:05:00,300 --> 01:05:06,600 with natural gas prices being as low as they are and renewables, the price that we're paying 525 01:05:06,600 --> 01:05:11,880 for renewables. That helps me out a lot to know that we're 526 01:05:11,880 --> 01:05:18,660 not doing this just for environmentally beneficial reasons. In addition, economically, this is 527 01:05:18,660 --> 01:05:28,780 something that needed to be shut down. Have you made a recommendation on yourself personally? 528 01:05:28,780 --> 01:05:33,620 Do you think this is a good deal and something that the four cities should pursue? 529 01:05:33,620 --> 01:05:42,020 Absolutely. I think this is not only is this a better economic outcome for rate payers, 530 01:05:42,020 --> 01:05:48,620 but most importantly, it is a way to reduce the risk profile of the city in a way that 531 01:05:48,620 --> 01:05:53,980 can't be done in any other manner. Okay, thanks. That was what I was hoping you 532 01:05:53,980 --> 01:06:01,660 would say. I'm done. That's what I was hoping he would say too. 533 01:06:01,660 --> 01:06:11,460 Any other questions, comments? All right. We are not taking action today, are we? This 534 01:06:11,460 --> 01:06:14,460 is just to work. No, this is just to answer your questions. 535 01:06:14,460 --> 01:06:18,220 Again, this will be back in front of you on the 25th. 536 01:06:18,220 --> 01:06:23,420 From my perspective, reducing the risk for the city, as well as the financial, that's 537 01:06:23,420 --> 01:06:29,840 very important. Environmental cleanups can be time consuming and costly. I've been through 538 01:06:29,840 --> 01:06:37,020 them in my past. I guess that's it. Do we have a motion to 539 01:06:37,020 --> 01:06:46,260 adjourn? Go ahead, Ed. You motion? And I think Charlie second, so we are adjourned. 540 01:06:46,260 --> 01:06:48,020 I did. Thank you. 541 01:06:48,020 --> 01:06:49,820 Thank you. Bye bye.