WEBVTT 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 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 00:00:18.520 --> 00:00:25.000 period. And my understanding is we did not receive any white card comments. And are there 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 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 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. 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 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 00:01:03.980 --> 00:01:11.400 still actively engaged in employment with UNT, then yes. Okay, so do we still have a 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. 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 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. 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? 00:01:57.920 --> 00:02:05.880 So moved. Second. All in favor say aye. Aye. Aye. Aye. Opposed? Close carry. Okay, item 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 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 00:02:28.800 --> 00:02:37.160 consider the approval of the December 14th minutes. Did anyone see any problems or corrections? 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, 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 00:02:49.680 --> 00:03:03.960 the piggyback option. Someone from purchasing? That was an option on the hog culling. If 00:03:03.960 --> 00:03:12.480 we have Laurie Hewell or Christine Taylor on the phone, they can address that. I see 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 00:03:25.000 --> 00:03:32.880 manager and piggyback just means that the vendors will allow other cities to possibly 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 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 00:03:51.200 --> 00:04:00.840 and use our pricing. A little bit like cooperative purchasing? Yes. Correct. Okay. Thank you. 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 00:04:10.880 --> 00:04:20.080 on track. Next item is consider the approval of December 14th, 2020 minutes. Are there 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 00:04:25.400 --> 00:04:31.680 about this before, but the written agenda that we approve is pretty spare. It just says, 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 00:04:36.560 --> 00:04:43.360 up, staff said, well, the official record is the video. Makes sense because of course, 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 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 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 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 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 00:05:16.480 --> 00:05:25.960 with the city's secretary and city attorney about that. Just one more question, Ed. Sorry. 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 00:05:31.120 --> 00:05:36.960 available for all the different boards and commissions until recently. So something that 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, 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 00:05:50.160 --> 00:05:54.800 and was looked at that, that perhaps there should be something on the minutes themselves 00:05:54.800 --> 00:06:02.080 that says for more detailed information regarding this particular discussion, please see such 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, 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 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? 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, 00:06:41.880 --> 00:06:45.800 consider recommending the adoption of an ordinance of the city of Denton to declare the intent 00:06:45.800 --> 00:06:54.000 to reimburse capital program expenditures, the electric utility for 42 million 538108 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 00:07:05.120 --> 00:07:11.680 government for 72 million 608678 with the tax preferred obligations, certificates of 00:07:11.680 --> 00:07:16.240 obligation and general obligation bonds with an aggregate minimum principal amount not 00:07:16.240 --> 00:07:28.040 to exceed 167,938544 and providing an effective date. Good morning. My name is Cassie Ogden, 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. 00:07:36.760 --> 00:07:41.200 So I'm here today to discuss the reimbursement ordinance. This is an annual activity that 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 00:07:49.600 --> 00:07:55.840 by federal law that we have to issue this intent to reimburse ourselves with tax exempt 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 00:08:02.360 --> 00:08:07.080 year. So, and this is outlined in our debt policy that council annually adopts. They 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, 00:08:15.220 --> 00:08:22.400 we do have each department director on the line. If you have project specific questions, 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 00:08:28.400 --> 00:08:38.460 requesting in the budget 35 million, 35.5 million for capital projects for this year. 00:08:38.460 --> 00:08:43.640 After reviewing all of the projects and going through the timeline associated with those, 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 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 00:09:01.720 --> 00:09:07.720 is 12 million? Is that essentially something we are funding within ourselves and not borrowing 00:09:07.720 --> 00:09:14.760 money to do? We essentially those projects may have shifted timeline. So you see, for 00:09:14.760 --> 00:09:20.840 instance, the regulatory performance upgrades, we budgeted 14 million, but we are not moving 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 00:09:26.200 --> 00:09:32.280 re-budget that project in the upcoming fiscal year, if appropriate, if the department director 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 00:09:37.880 --> 00:09:44.960 fiscal year. >> Okay. What percentage of these projects 00:09:44.960 --> 00:09:52.000 are we paying for out of operations and what percentage of these projects are we borrowing? 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 00:09:56.720 --> 00:10:03.320 projects. So there may be a revenue-funded component that is not listed here. The only 00:10:03.320 --> 00:10:07.400 listing that you see are debt. >> Okay. Thank you. 00:10:07.400 --> 00:10:14.320 >> And how many of these are under the bonding approval that the citizens approved? 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, 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. 00:10:25.960 --> 00:10:31.200 >> Okay. So the text dot ones are -- oh, those are because -- those were not citizen approved. 00:10:31.200 --> 00:10:34.440 Never mind. Okay. >> Yes. The text dot are because the water 00:10:34.440 --> 00:10:38.840 is relocating lines within the -- for the text dot projects. 00:10:38.840 --> 00:10:45.400 >> Okay. >> Any other questions on this slide? Okay. 00:10:45.400 --> 00:10:49.880 So wastewater, you can see we had several projects that were budgeted that were not 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 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. 00:11:03.200 --> 00:11:10.320 And then total overall, we budgeted $32.8 million, and we are requesting debt funding 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 00:11:20.600 --> 00:11:27.280 for their fleet facility. And then electric, same with electric, we had projects that we 00:11:27.280 --> 00:11:33.560 are not moving forward with that are -- we're not moving forward with debt service. Total 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. 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 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 00:11:55.920 --> 00:12:01.360 this with council tomorrow, then go to bond oversight committee for the geo-funded projects, 00:12:01.360 --> 00:12:05.480 which were not listed in this presentation. And then we will review all of the projects 00:12:05.480 --> 00:12:12.240 with audit finance committee before council adopts the official notice of intent and then 00:12:12.240 --> 00:12:21.400 projected to close on the bonds in June and receive the funding. 00:12:21.400 --> 00:12:36.000 >> Any other questions? Okay. Having none, do we have a motion to approve? No motion 00:12:36.000 --> 00:12:46.520 to approve? Thank you, Barbara. Do we have a second? 00:12:46.520 --> 00:12:51.680 >> I guess I'll second. >> Okay. All in favor say aye. 00:12:51.680 --> 00:12:57.480 >> Aye. >> Opposed? Okay. Carries. Thank you. 00:12:57.480 --> 00:13:01.800 >> Thank you. >> Next item is management reports. 00:13:01.800 --> 00:13:08.880 >> So, PBA members, there's a -- this is Tony Puente, executive manager of utilities. We 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 00:13:14.920 --> 00:13:21.400 the utility sole source procurement list. Then we also provided additional information 00:13:21.400 --> 00:13:27.480 regarding the extendable commercial paper and some of the pricing that there was a question 00:13:27.480 --> 00:13:34.740 about at your last meeting. And then also finally the response to a question about buy 00:13:34.740 --> 00:13:40.920 America or American manufactured products. So we have Cassie here. We also have Christine 00:13:40.920 --> 00:13:48.600 Taylor on the phone if any member has any questions about any of those three items. 00:13:48.600 --> 00:13:55.880 >> Anybody have any questions? I know the two members that asked about the buy American 00:13:55.880 --> 00:14:01.480 are not on. So anybody else have -- yes, Ed, go ahead. 00:14:01.480 --> 00:14:05.560 >> I have a question about something on the -- this procurement list. 00:14:05.560 --> 00:14:13.000 >> First item? >> Yeah. The largest item is I assume the 00:14:13.000 --> 00:14:18.200 Wartsilla overhaul has to do with the deck. >> That's correct. 00:14:18.200 --> 00:14:26.480 >> But my question is, what are swing sets? >> So I have Terry Nolte on here. 00:14:26.480 --> 00:14:30.560 >> Capital spares. >> Okay. So Terry's telling me these are capital 00:14:30.560 --> 00:14:36.320 spares. So basically it's a replacement parts for the engine, yeah. 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 00:14:40.440 --> 00:14:45.040 to -- >> That's a good question, Ed. 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 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 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. 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 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 00:15:19.160 --> 00:15:26.840 on. The largest being the comprehensive solid waste management strategy. We are working 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, 00:15:33.440 --> 00:15:38.040 that concludes the management section. There's a question about any of these items. 00:15:38.040 --> 00:15:44.560 >> Go ahead, Ed. >> Yeah. On my item under new business action 00:15:44.560 --> 00:15:52.840 items, discussion and pilot project on recycling and residential composting, I think that needs 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 00:15:59.560 --> 00:16:06.440 on municipal and residential composting. So I just type over whatever, but the recycling 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 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 00:16:25.840 --> 00:16:32.320 backup material for that, it said that since 2017, landfill waste has increased by more 00:16:32.320 --> 00:16:41.920 than 31%, amounting to an additional 120,000 tons per day. What I would appreciate getting 00:16:41.920 --> 00:16:51.120 information on is how much of that 31% increase is food waste. 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 00:16:58.560 --> 00:17:02.320 get you that information. >> Thank you very much. 00:17:02.320 --> 00:17:06.880 >> Brian's on. >> Yes. Mr. Stouff, Brian Burner, director 00:17:06.880 --> 00:17:13.240 of solid waste. I appreciate the question. Your answer will be intimately answered as 00:17:13.240 --> 00:17:18.440 part of the results of the comprehensive solid waste management strategy. As you may remember, 00:17:18.440 --> 00:17:27.160 at the end of November, we undertook a very, very consistent and cohesive evaluation of 00:17:27.160 --> 00:17:34.560 curbside garbage and recycling where we brought in a team that basically deconstructed what 00:17:34.560 --> 00:17:43.120 was being thrown away, curbside, both residential, multifamily and from certain commercial settings. 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 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 00:17:55.080 --> 00:18:00.000 those results will be used in the development of our strategy. So very shortly, we should 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 00:18:04.560 --> 00:18:10.400 discussing those in either online surveys, which should come out in the end of January, 00:18:10.400 --> 00:18:15.760 and then our think tank/focus groups, which will occur in February and March, probably 00:18:15.760 --> 00:18:24.720 Marchish, will have very more intimate discussions on those results and that project specifically. 00:18:24.720 --> 00:18:30.520 Okay, that sounds great. Thanks very much, Brian. Thank you. I have a further question. 00:18:30.520 --> 00:18:38.120 Are you going to keep the breakdowns of the waste by residential, multifamily commercials 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 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 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 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 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 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 00:19:23.080 --> 00:19:31.000 to specifically address the valley service that was in the downtown area off Fry Street. 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 00:19:40.960 --> 00:19:47.040 to send the big truck back, but they are used specific vehicles. Other than the downtown 00:19:47.040 --> 00:19:51.960 and Fry Street valley routes, they are not assigned to a specific route or a specific 00:19:51.960 --> 00:20:01.480 purpose or a specific need in the department itself. This was on Wainwright that I saw 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? 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 00:20:13.320 --> 00:20:17.040 on Fry Street, so that's been expanded to Fry Street now? 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 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 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 00:20:34.880 --> 00:20:39.280 shared dumpster service and it made more sense to break it down that way. 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. 00:20:45.080 --> 00:20:52.600 You're welcome. All right, then are we on new business items, 00:20:52.600 --> 00:20:59.240 Tony? Ma'am. I've already covered... 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 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 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 00:21:21.520 --> 00:21:27.000 and give staff direction regarding the potential sale of Texas and its power agencies Gibbons 00:21:27.000 --> 00:21:32.440 Creek steam electric station and related assets in Grimes County, Texas, including a review 00:21:32.440 --> 00:21:38.360 of the economics of the sale, the key provisions of the proposed asset purchase agreement and 00:21:38.360 --> 00:21:49.120 the risks associated therewith. Okay. Good morning, PB members. Terry Nalti, 00:21:49.120 --> 00:21:55.280 assistant general manager at DME and currently serving as interim director of water and wastewater. 00:21:55.280 --> 00:22:01.280 This presentation is intended to provide you an opportunity to see an overview of the proposed 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 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 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 00:22:34.240 --> 00:22:41.560 background about Gibbons Creek steam electric generating station. It is owned by four of 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 00:22:46.720 --> 00:22:56.880 ownership percentages where a 21.45% owner of the agency. The agency was formed to construct 00:22:56.880 --> 00:23:02.400 the Gibbons Creek power station as well as the transmission system to deliver power from 00:23:02.400 --> 00:23:10.240 the plant to the member cities. It's a 470 megawatt lignite coal fire generator. Just 00:23:10.240 --> 00:23:19.680 for comparison purposes, the Denton energy center is a 225 megawatt gas fired unit. The 00:23:19.680 --> 00:23:28.680 property itself around the power plant is 6,170 acres, including the 2200 acre Gibbons 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, 00:23:36.200 --> 00:23:41.760 could not compete in the wholesale market. And since that time it has been, staff has 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 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 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 00:24:09.480 --> 00:24:17.680 ash was managed during the operation of the facility. We have the coal ash ponds where 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 00:24:24.000 --> 00:24:31.400 disposal. We also have a scrubber sludge pond. The scrubber was used to remove sulfur dioxide 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 00:24:37.520 --> 00:24:47.480 combustion residual sites. So each of these sites are subject to EPA regulations. Those 00:24:47.480 --> 00:24:56.120 regulations will require TMPA or the buyer to clean close or close the facilities consistent 00:24:56.120 --> 00:25:03.640 with the regulations. And we estimate the cost of those to be $88 million of remediation 00:25:03.640 --> 00:25:12.240 costs. In addition to that, the regulations require ongoing monitoring, sampling and reporting. 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 00:25:18.840 --> 00:25:24.640 ongoing costs. And then there are some ongoing operations costs for the dam and natural gas 00:25:24.640 --> 00:25:32.460 pipeline that goes through the site. The sale process, there was a request for proposal 00:25:32.460 --> 00:25:42.400 issued in June of 2019. That RFP required the respondents to decommission the plant and 00:25:42.400 --> 00:25:50.880 remediate all the CCR units and to provide certain financial security to assure that 00:25:50.880 --> 00:25:57.720 the cleanup would be done and a demolition would be done in accordance with the requirements. 00:25:57.720 --> 00:26:05.680 So there's two phases to the work. Phase one is the actual decommissioning and remediation. 00:26:05.680 --> 00:26:12.020 That is covered by a surety bond. And then the post closure activities which are covered 00:26:12.020 --> 00:26:21.320 by another surety bond called the post closure bond. Five proposals were received. The board 00:26:21.320 --> 00:26:29.440 of TMPA directed staff to begin working with one of the groups, Chara Melt Solutions who 00:26:29.440 --> 00:26:36.080 have formed the Gibbons Creek environmental redevelopment group and they've been negotiating 00:26:36.080 --> 00:26:44.160 a transaction with this group for the last year. The original transaction included the 00:26:44.160 --> 00:26:52.520 potential of restarting the coal fired power plant. That option has gone away and the current 00:26:52.520 --> 00:26:57.560 deal requires a demolition of the coal plant and retains the economics of the original 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 00:27:08.800 --> 00:27:18.320 approved the asset purchase agreement on December 10th and subsequent to that time, the members 00:27:18.320 --> 00:27:25.760 recommended the extension of the pollution liability insurance beyond the four years 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 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 00:27:41.960 --> 00:27:47.760 week on the seventh. The remediation project and decommissioning is anticipated to save 00:27:47.760 --> 00:27:55.320 in excess of $48 million as compared to self performance of the remediation and demolition 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 00:28:02.160 --> 00:28:08.320 or sorry, joint operating agreement, which is the document that's been signed by the 00:28:08.320 --> 00:28:16.120 four members requires that all cities approve the transaction for it to move forward and 00:28:16.120 --> 00:28:24.000 you and you will see a concurrent ordinance that will be provided for your review and 00:28:24.000 --> 00:28:30.640 recommendation on the 25th. That concurrent ordinance is an identical document that will 00:28:30.640 --> 00:28:39.160 be executed by all four cities. The buyer is Gibbons Creek Environmental Redevelopment 00:28:39.160 --> 00:28:46.400 Group. It is a wholly owned subsidiary of Chara Solutions. It's a Texas limited liability 00:28:46.400 --> 00:28:54.520 corporation. Chara Solutions is a publicly traded company with over half a billion dollars 00:28:54.520 --> 00:29:01.640 of revenues in 2019. They are the preeminent and leading provider of coal combustion by 00:29:01.640 --> 00:29:08.360 product management in North America. They're doing this type of work at various sites throughout 00:29:08.360 --> 00:29:15.760 the US and they also provide ash management, O&M services to many electric utilities and 00:29:15.760 --> 00:29:26.000 they do nuclear O&M as well. However, from a risk perspective, the deal team thought 00:29:26.000 --> 00:29:32.480 it was important to ensure that the performance under the contract was fully securitized and 00:29:32.480 --> 00:29:39.920 not dependent upon the financial wherewithal of Chara Corporation on a going basis. So 00:29:39.920 --> 00:29:45.000 there are performance bonds, pollution liability insurance and post-closure bonds that are 00:29:45.000 --> 00:29:53.160 independently securitized to ensure that the work gets done properly, regardless of what 00:29:53.160 --> 00:30:03.200 happens with Chara. The major terms of the agreement for TMPA, Chara assumes all the 00:30:03.200 --> 00:30:11.920 environmental liabilities. They indemnify a TMPA. They will remediate all the CCRs and 00:30:11.920 --> 00:30:18.740 decommission the plant. They will issue a performance bond or obtain a performance bond 00:30:18.740 --> 00:30:28.140 of $36.5 million. That bond will be reduced as the remediation work is completed down 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 00:30:33.160 --> 00:30:44.480 bond is delivered. Post-closure bonding will be compliant with the requirements of TCEQ. 00:30:44.480 --> 00:30:50.880 There are special warranty deeds that extend to the particular pieces of property in which 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 00:30:58.080 --> 00:31:06.480 water pollution liability insurance, naming TMPA and the cities as additional insured, 00:31:06.480 --> 00:31:15.600 and then we are express beneficiaries of all the obligations. What does Chara's GCERG get? 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. 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 00:31:29.520 --> 00:31:37.680 an environmental escrow payment of $28.5 million. And that's to fund the remediation projects. 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, 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 00:31:51.720 --> 00:32:02.360 pay 50% of the initial performance bond. So here's the economics of the transaction. 00:32:02.360 --> 00:32:08.600 As you can see, this first table on the left compares three scenarios. Scenario one is 00:32:08.600 --> 00:32:14.800 the transaction that's in front of you today. Scenario two envisions a potential default 00:32:14.800 --> 00:32:22.280 of Chara. See Gibbons Creek Environmental Redevelopment Corporation sometime during the remediation 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 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. 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 00:32:48.800 --> 00:32:55.380 perform the remediation ourselves, out-of-pocket costs of about $84.6 million, that results 00:32:55.380 --> 00:33:05.080 in the savings of $48 million of option one compared to option three. For Denton, this 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 00:33:16.620 --> 00:33:23.200 million savings as compared to the self-performance. So our share of the self-performance versus 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 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 00:33:38.520 --> 00:33:47.100 we had $21.3 million budgeted over the next five years for remediation and decommissioning. 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 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 00:34:01.720 --> 00:34:09.600 million savings in this fiscal year. Risk management is a key aspect of the transaction 00:34:09.600 --> 00:34:16.400 because of the liability associated with these wastes that have been disposed of at the site. 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 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 00:34:28.600 --> 00:34:35.920 avoid any disturbance of the waste. To the extent any of these particular parcels that 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 00:34:43.200 --> 00:34:48.720 new buyer didn't meet the deed restrictions and insurance requirements. The rest of the 00:34:48.720 --> 00:34:55.300 property will be assessed over the coming months as to whether it's clean or dirty. 00:34:55.300 --> 00:35:01.720 Clean meaning there are no known environmental contaminants on the site. Dirty would be anything 00:35:01.720 --> 00:35:08.520 that does have identified contamination on the site. We don't expect that any of the 00:35:08.520 --> 00:35:14.440 other sites will have contamination. But if they do, the same type of deed restrictions 00:35:14.440 --> 00:35:23.240 would be imposed upon those sections that contamination would be discovered on. 00:35:23.240 --> 00:35:28.160 Accountability is key. So as I mentioned, we're appointing an environmental representative 00:35:28.160 --> 00:35:34.360 to monitor and audit the site activities. And that environmental representative will 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 00:35:47.240 --> 00:35:56.900 for the cleanup schedule. And then we'll release funds from the escrow accordingly. 00:35:56.900 --> 00:36:04.120 So in summary, it does represent this transaction represents a savings of about $48 million 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 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. 00:36:21.040 --> 00:36:27.760 Most importantly, the environmental risk profile is significantly reduced. And we don't have 00:36:27.760 --> 00:36:36.520 any of the ongoing, as I mentioned, that $15 million projected 30-year cost of monitoring, 00:36:36.520 --> 00:36:45.080 record-keeping, and reporting. That all now becomes an obligation of the buyer. There 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 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 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 00:37:03.440 --> 00:37:13.180 this posting today. And importantly, we will retain all the transmission assets on the 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 00:37:19.400 --> 00:37:26.640 all those transmission assets. And that concludes my presentation. I do have on the phone with 00:37:26.640 --> 00:37:35.400 me four people from TMPA. Bob Kahn, the general manager of TMPA; Carl Shehady, the attorney 00:37:35.400 --> 00:37:42.960 for TMPA; Al Axe, the environmental attorney for TMPA; and Robert McCormick, the primary 00:37:42.960 --> 00:37:49.880 transaction attorney on this transaction. With that, I will stop sharing and will be glad 00:37:49.880 --> 00:37:51.720 to answer any questions. 00:37:51.720 --> 00:37:56.160 Right. Questions of the board? Yes, Karen, go ahead. 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 00:38:01.520 --> 00:38:10.280 initial reaction was I was wondering why TMPA was paying into an escrow account to guarantee 00:38:10.280 --> 00:38:16.800 the behavior of somebody else. Why would that be called an escrow account? 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 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 00:38:29.560 --> 00:38:37.480 that prescriptive purpose and it will be drawn down as the project is completed. 00:38:37.480 --> 00:38:40.760 But it's guaranteeing the behavior of CHARA. 00:38:40.760 --> 00:38:46.800 Yeah. I'll ask Bob or Robert to answer that question. 00:38:46.800 --> 00:38:50.360 Sorry, I'm just going to figure out the terms. 00:38:50.360 --> 00:38:54.240 Yeah, sure. Terry, can you hear me? 00:38:54.240 --> 00:38:56.600 Yes, sir. Go ahead, Bob. 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 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 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 00:39:16.800 --> 00:39:22.360 as Terry indicated, we have an environmental designee who will be going out there. That 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 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 00:39:34.560 --> 00:39:39.120 work, they don't get paid. Okay. 00:39:39.120 --> 00:39:46.240 Does that answer your question? Yeah. I was just kind of wondering of the terminology 00:39:46.240 --> 00:39:53.920 of escrow. Since that's usually my experience with escrow accounts is when I had slacker 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 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 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 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 00:40:20.840 --> 00:40:25.200 unless they behave well. Correct. 00:40:25.200 --> 00:40:29.560 Thank you. Thanks for clearing that up. Other questions. Go ahead, Ed. 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 00:40:35.760 --> 00:40:42.160 there was really no indication of the extent of pollution at this facility. And I think 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. 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 00:40:55.440 --> 00:41:03.320 the Environmental Integrity Project did a study on groundwater contamination from Texas coal 00:41:03.320 --> 00:41:13.960 ash dumps. And it specifically deals with Gibbons Creek and has measurements, et cetera. 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, 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 00:41:29.960 --> 00:41:39.160 considered "unlined." Because of that, all three coal ash units are on or close to the 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 00:41:47.500 --> 00:41:54.800 recreational fishing area. And the report says that all three coal ash units at Gibbons 00:41:54.800 --> 00:42:01.720 Creek are contaminating the groundwater. And this is detailed in the report with measurements 00:42:01.720 --> 00:42:09.960 of the pollutants. "Are contaminating the groundwater most or all of the contaminated 00:42:09.960 --> 00:42:16.240 groundwater eventually discharges into Gibbons Creek Reservoir where it threatens aquatic 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 00:42:23.440 --> 00:42:33.080 important to know the scope of this project by understanding a little more what has to 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 00:42:46.080 --> 00:42:54.160 targets and the timeline that goes with it. I assume that there is such a plan. 00:42:54.160 --> 00:43:04.200 Yes, Mr. Sofe, there is. TMPA has done extensive studies by engineering firms and environmental 00:43:04.200 --> 00:43:15.720 firms to assess the extent of the limits of the CCR units. And the remediation project 00:43:15.720 --> 00:43:23.560 itself involves the removal of any residual materials from the ash pond, from scrubber 00:43:23.560 --> 00:43:35.320 sludge ponds, and then places them into permanent disposal sites in landfill F. And so that 00:43:35.320 --> 00:43:46.920 landfill will be closed in accordance with TCEQ requirements. There will be ongoing groundwater 00:43:46.920 --> 00:43:54.880 monitoring reporting and any action that would be required would be consistent with the regulations. 00:43:54.880 --> 00:44:02.680 So as you're probably aware, TMPA posts all the information regarding its CCR units on 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 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 00:44:17.520 --> 00:44:24.720 Alan to add anything? No, I mean, everything you said is correct. 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 00:44:37.040 --> 00:44:42.680 cleanup goes, we do have a detailed schedule attached to the asset purchase agreement that 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 00:44:49.880 --> 00:45:00.400 by TCEQ before they can complete the project. Thank you. Is that schedule posted on the 00:45:00.400 --> 00:45:07.160 TMPA website? It's actually an attachment to the documents 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 00:45:17.440 --> 00:45:23.600 attachments is there. Okay, thanks. Can I continue or do you? 00:45:23.600 --> 00:45:29.840 Absolutely. Go ahead. Okay. In reading the purchase agreement, obviously 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 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 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 00:45:54.720 --> 00:46:01.880 often put off by these things. The second thing I wanted to ask about is 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. 00:46:17.140 --> 00:46:24.900 After closing, purchaser covenants that it will, I immediately begin and diligently pursue 00:46:24.900 --> 00:46:33.700 in a commercially reasonable manner. That phrase, commercially reasonable manner is 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 00:46:40.400 --> 00:46:45.260 because House Bill 40, which was the state law that was 00:46:45.260 --> 00:46:56.940 He froze. Or I froze. Passed what? We missed part of what you said. You were 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? 00:47:03.200 --> 00:47:06.600 Did you get the commercially responsible clause? Yes, you did that part. Yep. 00:47:06.600 --> 00:47:08.700 Okay. And the reason why- HB 4. 00:47:08.700 --> 00:47:13.500 HB 40. When you froze for me. Yeah, okay. House Bill 40, which banned 00:47:13.500 --> 00:47:22.660 Denton's fracking ban, had a similar phrase. However, in the House Bill 40 document, that 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 00:47:32.040 --> 00:47:37.920 pretty crucial to do that because for obvious reasons. 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 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 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 00:48:00.700 --> 00:48:11.900 attorneys, either Carl or Robert to weigh in on that. Robert, can you handle that, please? 00:48:11.900 --> 00:48:23.780 Certainly. So the standard commercially reasonable matter is a term that not only in the environmental 00:48:23.780 --> 00:48:33.900 space, but really in contracting in general, is a commonly used term such as diligent manner 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 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 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 00:49:02.460 --> 00:49:12.020 when they were out doing their environmental closure and post-closure compliance obligations, 00:49:12.020 --> 00:49:21.300 were doing it in a in a reasonable manner, consistent with generally applicable standards 00:49:21.300 --> 00:49:31.020 in the industry. And so that would include compliance with all laws and pursuing it. 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 00:49:37.660 --> 00:49:44.380 diligently pursuing not only in a commercially reasonable manner, but also in accordance 00:49:44.380 --> 00:49:48.580 with the project schedule. And that's the schedule that you were previously referred 00:49:48.580 --> 00:49:57.300 to as being attached to the asset purchase agreement. So that's that 34 month project 00:49:57.300 --> 00:50:07.460 schedule beginning on the closing date and then going out from there. So I hope that 00:50:07.460 --> 00:50:12.060 answers your question. If not, I'm happy to address it further. 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 00:50:18.420 --> 00:50:24.780 that I see no reason why it can't be expanded to reading commercially and environmentally 00:50:24.780 --> 00:50:31.780 reasonable. 00:50:31.780 --> 00:50:41.140 Environmentally reasonable would be a term to use simply because it doesn't really have 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 00:50:52.260 --> 00:51:01.620 that it is in compliance with environmental laws. And then we assume that the laws are 00:51:01.620 --> 00:51:06.620 environmentally reasonable. Right. And that is that is their standard. 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 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 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 00:51:37.860 --> 00:51:43.340 also the possibility that with a new administration that is perhaps a little more environmentally 00:51:43.340 --> 00:51:49.300 conscious than the last one, that there will be further strengthening of federal regulations 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 00:52:00.220 --> 00:52:06.380 remediation document? The possibility of these changes? 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 00:52:14.780 --> 00:52:22.900 normal course of regulatory matters, state versus federal is that a federal regulation 00:52:22.900 --> 00:52:31.060 becomes enforced by the state after primacy is granted to the state once they demonstrate 00:52:31.060 --> 00:52:37.860 that their program is at least as stringent as the federal requirements. And in this case, 00:52:37.860 --> 00:52:44.980 the the request by TCEQ to take over primacy for this program does meet that standard. 00:52:44.980 --> 00:52:53.260 It is at least as stringent. The state agency having primacy over the program allows specific 00:52:53.260 --> 00:53:00.500 state issues, concerns that an individual state may have that could warrant regulations 00:53:00.500 --> 00:53:08.220 that are more stringent than the federal regulations. It allows the state regulatory agencies to 00:53:08.220 --> 00:53:14.480 promulgate those more stringent regulations. So it is a what I would term a normal course 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 00:53:24.380 --> 00:53:30.420 to weigh in on what would happen under the terms of the agreement if the regulations 00:53:30.420 --> 00:53:38.860 became more stringent. Well, I'll try that in the first instance. 00:53:38.860 --> 00:53:44.940 The agreement requires them to do everything consistent with all the laws, whatever they 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 00:53:52.620 --> 00:54:02.860 to change over the years and travel will just have to follow whatever the requirements are. 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 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? 00:54:21.940 --> 00:54:28.700 So under the terms of the agreement, there's no such requirement, with the exception of 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 00:54:38.140 --> 00:54:44.100 using the property for whatever purposes it intends to as long as they're consistent with 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 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 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. 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 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 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 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 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 00:55:44.300 --> 00:55:49.580 under the cradle to grave was with circular. Is that correct? 00:55:49.580 --> 00:55:54.980 That is correct, essentially correct. And for just for clarification purposes, you know, 00:55:54.980 --> 00:56:01.140 there are four parcels that have these CCR units, potentially six other parcels that 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 00:56:07.780 --> 00:56:14.300 that may have occurred. That's the the focus of the clean versus dirty determination. 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 00:56:26.820 --> 00:56:34.700 is an environmental representative? Is he a scientist, an engineer? Are there certain 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 00:56:41.240 --> 00:56:48.220 an environmental representative is? Yes, I'll ask Bob to give you the specifics 00:56:48.220 --> 00:56:53.740 on the individual that TMPA has hired to fill that role. Thanks. 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 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 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. 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 00:57:29.100 --> 00:57:37.340 stuff done. We also have somebody that works directly for TMPA. His name is Daniel Metals. 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 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 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 00:57:58.140 --> 00:58:03.340 agreement as far as what's required as far as remediating. 00:58:03.340 --> 00:58:11.420 Great. Thank you very much. Yes, Barbara. Go ahead. 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, 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 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 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? 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. 00:58:48.740 --> 00:58:59.660 Robert, do you want to handle that? Certainly. You are correct. The warranty 00:58:59.660 --> 00:59:07.620 deeds that we put in place have references back to Char's obligations to remediate the 00:59:07.620 --> 00:59:17.500 property and to indemnify TMPA and the member cities for environmental obligations. So those 00:59:17.500 --> 00:59:24.380 obligations will be recorded in the chain of title through the warranty deeds that we 00:59:24.380 --> 00:59:35.300 were recording at closing. And that's the primary purpose for having the forms of warranty 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 00:59:42.820 --> 00:59:52.340 clean both of them, both forms disclose the ongoing release of indemnity obligations with 00:59:52.340 --> 01:00:04.860 respect to TMPA. Other questions? Yes. Karen, this isn't, 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 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? 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? 01:00:25.200 --> 01:00:29.820 My understanding is that it is a federally protected species. 01:00:29.820 --> 01:00:37.500 So that's what we do with the mine land. Potentially. You know, there are conservation 01:00:37.500 --> 01:00:44.220 easements in place where at least five conservation easements that are in place where those orchids 01:00:44.220 --> 01:00:53.280 are found. And what happens with those conservation easements will be determined by whatever the 01:00:53.280 --> 01:01:00.020 ultimate disposition of the properties are, whether they're sold. You know, three of the 01:01:00.020 --> 01:01:06.580 five areas I understand are on lease properties. And once the leases expire, those will revert 01:01:06.580 --> 01:01:11.980 back to the landowners from whom we've leased the property. 01:01:11.980 --> 01:01:26.340 Okay. Thanks. Other questions? Discussion? Charlie, go ahead. 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 01:01:35.420 --> 01:01:41.900 this agreement and following it through and reviewing? Would that be you? 01:01:41.900 --> 01:01:47.500 That would be me, yes, sir. Okay. And how many hours would you say you've 01:01:47.500 --> 01:01:55.380 spent working on this? Boy, that's hard to say. You know, TMPA has 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 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 01:02:08.520 --> 01:02:15.860 and operations group. There's the financial working group. There have been a number of 01:02:15.860 --> 01:02:23.620 meetings to discuss the status of the transaction. I know Larry Collister has been involved with 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, 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 01:02:37.460 --> 01:02:43.540 working on this particular transaction. Charlie, I would also point out that Mr. Billy 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 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 01:03:00.700 --> 01:03:05.460 their responsibilities on TMPA board directors. Thank you for that follow-up. That was going 01:03:05.460 --> 01:03:09.620 to be my next question so that people can understand we've had representation for a 01:03:09.620 --> 01:03:13.660 very long time. So as a volunteer board member who is not 01:03:13.660 --> 01:03:21.660 an attorney or familiar with all of the environmental applications and the financial implications, 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 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 01:03:37.540 --> 01:03:43.300 shut down because it was not able to compete in the wholesale market at the time? 01:03:43.300 --> 01:03:49.100 That's correct. Would I generally believe coal is the cheapest 01:03:49.100 --> 01:03:56.660 power available? Is it just that the environmental compliance is expensive enough that it was 01:03:56.660 --> 01:04:01.740 no longer economically feasible to operate the plant? 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 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, 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 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 01:04:29.340 --> 01:04:39.500 during the day as it was operating, variable cost being above the wholesale market. And 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 01:04:46.820 --> 01:04:54.700 expense, other financial expenses. So that's in general coal fire generation does not compete 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 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 01:05:06.600 --> 01:05:11.880 for renewables. That helps me out a lot to know that we're 01:05:11.880 --> 01:05:18.660 not doing this just for environmentally beneficial reasons. In addition, economically, this is 01:05:18.660 --> 01:05:28.780 something that needed to be shut down. Have you made a recommendation on yourself personally? 01:05:28.780 --> 01:05:33.620 Do you think this is a good deal and something that the four cities should pursue? 01:05:33.620 --> 01:05:42.020 Absolutely. I think this is not only is this a better economic outcome for rate payers, 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 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 01:05:53.980 --> 01:06:01.660 would say. I'm done. That's what I was hoping he would say too. 01:06:01.660 --> 01:06:11.460 Any other questions, comments? All right. We are not taking action today, are we? This 01:06:11.460 --> 01:06:14.460 is just to work. No, this is just to answer your questions. 01:06:14.460 --> 01:06:18.220 Again, this will be back in front of you on the 25th. 01:06:18.220 --> 01:06:23.420 From my perspective, reducing the risk for the city, as well as the financial, that's 01:06:23.420 --> 01:06:29.840 very important. Environmental cleanups can be time consuming and costly. I've been through 01:06:29.840 --> 01:06:37.020 them in my past. I guess that's it. Do we have a motion to 01:06:37.020 --> 01:06:46.260 adjourn? Go ahead, Ed. You motion? And I think Charlie second, so we are adjourned. 01:06:46.260 --> 01:06:48.020 I did. Thank you. 01:06:48.020 --> 01:06:49.820 Thank you. Bye bye.