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 Good morning and welcome everybody to the Public Utility Board meeting for the

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 City of Dinton Monday June 28th 2021 it is 9.01 a.m. on my clock and we're going

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 to start by calling the meeting to order and next we're going to see if are there

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 any members of the public that would like to speak address the board or

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 anyone online. Good morning chair we have no comments this morning online or on

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 the phones. Where are you? Okay thank you. They said I'd see her when she came out.

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 Since there are no presentations from members of the public we'll move on

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 to items for individual consideration. First one being the approval of the June

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 14 2021 minutes. Would anyone like to move to approve those minutes? Move

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 approval. I have a motion. Do I have a second? Second. All those in favor please

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 say aye. Aye. Any opposed sign the same. Passes with the quorum unanimously.

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 Next we have item 2B which is receive nominations and elect a

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 secretary. Does anybody have any nominations? I mean normally I think we

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 should probably get someone that's not here right that didn't show today but the

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 other. We're not showing up. That's right absolutely but the secretary's duties

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 usually are just same as a second vice-chair. We really don't have any

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 secretary duties other than that I believe so. Any nominations?

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 Any thoughts? Anybody anyone want to volunteer that's here? I'm stepping down

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 soon so I'm out of it. I'm not caring. I think that leaves Barbara. Okay I'll do

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 it. Okay very good. Well you want to nominate Barbara Karen? Yes I'll nominate

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 formally nominate Barbara. Russell? Do I hear a second? Second. Motion and a second

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 all those in favor please say aye. Aye. Opposed sign the same. Passes unanimously.

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 We're moving on to item 2C management reports.

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 We have a couple of items for you. The first one is we have a report that was

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 done by the by the internal auditor. She provided a memo to you on the water

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 system rate structure. She's here and available if you have any questions on

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 on on that memo. Okay there appear to be comments. All right so if there's no

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 questions we'll move on to the future agenda items. Obviously starting today we

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 do have preliminary discussions with you about the utility budgets. It is it is

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 preliminary and Nick Vinson our director finances here and also Cassie Ogden our

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 director of finance. They'll try to be introducing the item kind of let you know

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 what the next steps are but that's really what what's on the agenda is to

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 come back to you on July 2nd. Chairman, Mr. Chairman if I could interject and I

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 apologize the memo in question you just referred to is actually quite long and I

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 was wondering if the department had any response to the audit. Yeah we can get

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 either Stephen Gay or Nick Vincent to address any any questions you may have.

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 So so Lee at the very end there's the responses just very in very broad terms

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 at the very end of the long document. Ah thank you. Yep. I did not realize that

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 we got about page three or four I was like I don't think I'm gonna knock this

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 out this morning. Yeah if you start at the back which is always a good idea.

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 Well that's a good tip. So there's well Nick can handle this. Mr. Ryback can you

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 hear me? Yes. Okay yes so we will be bringing back a conversation to the

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 Public Utilities Board next month based on that audit and the recommendation

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 to change the water rate structure. So we did receive guidance from City Council

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 last week to look at the water rate structure and bring that conversation

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 back to you mainly focused on the first tier within water which is currently 0

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 to 15,000 gallons. So we're gonna bring back some options for the Public

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 Utility Board and City Council but they will be in the next two to three weeks.

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 So to answer your question we will have a presentation for you on that in the

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 coming weeks. Is that okay with you? All righty then I'll look forward to the

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 presentation. I apologize for the interruption but I just had realized the

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 document was quite lengthy so I thought we were kind of going over it a bit too

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 quickly but if we're gonna have a work session on it and go over it that's fine

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 and I apologize for the interruption thank you. No worries thank you. Mr. Ryback

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 really quick too if you would want to see a presentation today and the

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 internal auditor Madison does have a presentation she can present to you

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 otherwise it'll come back to you in a couple weeks. I'd prefer to see in a

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 couple of weeks since we've got some pretty good budget presentations

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 this morning if that's okay with you member Ryback. However it works out we

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 can do it today fine if not the next meeting is fine as well thank you. Okay

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 thank you thanks Nick. Okay the last item Mr. Chair is just the new business

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 action item again we still have some some general items that we'll be

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 addressing with the board you know during the budgetary discussions and then

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 the final item is really the request about the legislative update you may or

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 may not know that the governor did recently call a special session and so

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 we're gonna kind of wait and see kind of what happens as we're here right now

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 there's not there may not be any discussions about ERCOT or the grid but

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 we're waiting to see what that agenda might look like and if there are going

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 to be items we may wait until after the special session to come back to you and

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 give you a legislative update so that way we can just do it all at once but

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 with that happy to answer any questions you may have on on any of those action

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 items or future agenda items. Does any member have any requests for future

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 agenda items new business? Mr. Chairman I have a question. Yes sir. There was some

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 discussion earlier by waste management about a pilot program I think for yard

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 waste residential yard waste composting it I was wondering if there's been any

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 progress on that you could give us an update. Good morning members of the

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 board. Brian Burner director of solid waste for the city of Denton. As you're

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 aware for about the last two years we have had a very successful yard waste

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 program implemented here in the city of Denton. This is not new we you know

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 you either opt in opt out we collect only paper craft bags or carts and we've

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 always had the opportunity for residents to put what we call pre-consumer

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 vegetative waste in there so the ends of your celery stalks you know apple cores

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 things of that nature if it's been cooked prepared has oil grease salts you

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 know anything of that nature that cannot go again cannot go into the cart but

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 anything that's vegetative that is precooked or used in the preparation can

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 be put in that material. A couple weeks ago I believe there was a grant proposal

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 that was brought before you what we're wanting to do from a proposal

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 standpoint is we've applied to the North Central Texas Council of Governments for

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 a grant to expand this and work closely with our friends over at wastewater to

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 collect post consumer food waste from the valet the downtown restaurant areas.

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 What we want to do is be able to take that in grind it up actually put it in

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 the wastewater digesters get methane off the top that we can purify put back in

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 the pipeline the the back part is digested down it goes into the biosolids

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 which we turn into the down order and sell so it's a wonderful closed loop

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 system part of this process is to see how efficient we can be. Secondarily make

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 sure we have capacity so that as we look to expanding this we have to we

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 identify when we might need to build another digester or a digester

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 specific to food waste management so it's a it's an opportunity that that I

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 think that the time has come we just got to make sure all the parts are in the

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 right right order. I would imagine you still and in the past I know you've had

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 a lot of good conversations with the downtown folks. Yes they are wonderful

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 partners I think if you you you compare what's happening in downtown now versus

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 downtown about 18 months ago you know it's cleaner it's from an aesthetic

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 standpoint it's much better to look at we've got about 20 25 more parking

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 spaces which is most important they're around the square so you know and you

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 know really our solid waste folks that are working that really sort of become

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 the ambassadors they're they're always telling people where to go and what

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 they're doing so you know it's it's a it's a good fit. Okay very good thank you

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 Brian. Thank you. To answer your question member Ryback. Yes sir thank you very

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 much. Thank you. Okay any other future agenda items for suggestions? There's no

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 new business action items either? Then I guess we'll move on to concluding items.

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 Is that the way you want to do this? I guess that's all that we got after that.

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 Okay all right I need to read this whole thing don't I? Okay under section 551.042

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 of the Texas Open Meetings Act respond to inquiries from the public utility

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 boards or the public with specific factual information or recitation of

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 policy or accept a proposal to place the matter on the agenda for an

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 upcoming meeting and under section 551.0415 of the Texas Open

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 Meetings Act provide reports about items of community interest regarding which

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 no action will be taken to include expression of thanks, congratulations or

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 condolence, information regarding holiday schedules, an honorary or salutary

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 recognition of a public official, public employee or other citizen, a reminder

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 about an upcoming event organized or sponsored by the governing body,

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 information regarding a social ceremonial or community event organized

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 or sponsored by an entity entity other than the governing body that was

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 attended or is scheduled to be attended by a member of the governing body or an

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 official employee or the municipality or an announcement involving an imminent

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 threat to the public health and safety of people in the municipality that has

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 arisen after the posting of the agenda. Following the completion of the regular

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 meeting the public utility board would convene a work session at which the

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 following items will be considered. This is to receive a report, this is work

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 session A, PUB 21-114, receive a report, hold a discussion and give

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 direction regarding the water, wastewater, drainage, solid waste, electric and

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 environmental services, FOI 2021-2022, preliminary budget capital improvement

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 program and five-year financial forecast. Good morning Chair, PV members, Nick

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 Vinson, Assistant Director of Finance. It's my pleasure to be in front of you once

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 again today. So I want to introduce this topic or these presentations and I'll

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 turn it over to Stephen Gay to present water. So there's five presentations to

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 be presented to you today, water, wastewater, solid waste, electric and

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 environmental services. Each presentation is a joint presentation meaning that the

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 director will present the first half of the presentation which is made up of

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 operational information and then I'll return to the podium to present the

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 financial information. Cassie Ogden will actually present the electric financial

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 information and then I'll present the rest of them. With that I'll turn it over

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 to Stephen. Please we encourage your questions, any comments that you have

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 regarding the preliminary budget. We'll definitely take those back and build them

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 into the future presentations to come back forward to you.

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 Thank you Nick and good morning. Let me share my screen here. Good morning

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 members of PUB, I'm Stephen Gay, the Director of Water Utilities. Before we

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 get into the actual presentation I want to take this opportunity to introduce

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 myself to you. I am new to the city of Denton but I'm not new to the water

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 utilities. I started my career in 1993 working for the city of North Las Vegas

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 as a water meter reader and I worked there until 2010 and when I left I was

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 the supervisor over water system supervisor for all of our production

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 storage and treatment facilities. Interesting thing about North Las Vegas

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 when I started there we had a population of 64,000 and when I left in 2010 we

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 served a population of over 360,000. From there my career took me to

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 Long Beach to work for the Long Beach Water Department as their manager of

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 security and emergency preparedness. In that role I really focused on the

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 strategic planning, you know continuity of operations, continuity of business

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 plans, emergency response recovery plans and doing risk and hazard and

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 vulnerability assessments. From there I had an opportunity to transition

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 back into a more operational centric role for the city of Westminster, Colorado

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 as their manager of utilities operations where I ran my team and I ran a system

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 very similar to the one that we have here in Denton and in 2021 I'm here now

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 as your new Director of Water Utilities. Leadership, I am a servant leader, I'm

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 very passionate about serving my community, my team and the organization. I

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 build collaborative partnerships through open and honest communication and hold

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 myself and others accountable for following up and following through and

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 then I challenge myself and my team to look past the status quo and embrace

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 emerging technologies where appropriate to better serve our community. I hold a

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 Master of Science, Executive Master of Science in Crisis and Emergency

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 Management, Bachelor of Science in Business Administration, I'm a certified

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 water professional in the states of both Nevada and Colorado and I hold various

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 certifications from the Federal Emergency Management Institute. I'm also

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 associated with the American Water Works Association in California, Nevada. I was

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 the chair of the Water Distribution Division, Rocky Mountain section in

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 Colorado, I was the chair of the section. I sit on the National Committee, Standard

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 Committee for Security and Emergency Preparedness Practices for the water

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 sector and I have recently been elected as appointed to the board of the National

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 Association for American Water Works Association. So that's a little bit about

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 me. We'll move into the team. We have one vacancy which is our Director, Assistant

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 Director of Operations, Preetem Dishmukh, I'm sure that you're familiar with him,

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 he's probably been in front of you a time or two before. He is our Assistant

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 Director of Asset Management and Infrastructure and then Kim Makin, I'm

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 sure that you're all familiar with, she's that she's the glue that holds us all

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 together. From an organizational structure that's pretty very traditional

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 from my experience, Director of Utilities, administrative staff supporting

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 the the Office of the Director and you have our Assistant Director over

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 Operations which contains water production and that's Hector Ortiz, our

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 field operations which is water field and wastewater field that's Casey Bowles

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 and then water reclamation is Rusty Woolard. The Preetem's team, the Asset

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 Management and Infrastructure is a focus on vertical assets. So vertical if you

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 think about our structures like our treatment plants, our pump stations, our

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 lift stations, so anything that exists in the vertical plane is a vertical asset.

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 So they're really going to be focusing on that moving forward. The asset

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 management team, Tyson Dawson is Tyler Dawson is focusing on both horizontal and

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 vertical assets just you know making sure that we take keep good records of

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 what we're repairing what we're replacing when we're doing that type of

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 work and the condition of those assets. And then Stephen Moore, the Senior

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 Engineer, is really focused on our development review. FTE summary in

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 2019-20 there was 110.5 FTEs and 2020 to 2021 that number was reduced to

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 104.5 and in 2020 moving forward in 2021-2022 that number goes up to

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 106.5. Now those aren't new FTEs being added to the department. We're actually

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 it's moving some movement around within the organization. Three positions were

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 moved from solid waste over to sustainability. One position was moved

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 from sustainability over to parks and then there was an internal move from our

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 distribution HBU up into the administrative HBU. What's the situation

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 with the utilities administration? I didn't understand that. We eliminated or at

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 least they're out of your excuse me out of your budget. You've got utilities

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 administration you had 9.5 in 19-20 and then after that you have nothing. Yeah

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 there I believe there was a restructure that was it was a pre-stephen gay I'll

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 turn that over sure sure yeah chair in fiscal year 2021 utility administration

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 actually combined with water administration okay that's the reason

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 you say going away just transfers okay member Ryback had a question I believe

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 yes sir mr. chairman I am wondering I understand the functions of the other

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 folks listed such as the administration and the meter reading what exactly do

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 the sustainability folks do in the water department mr. burner good morning

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 Brian burner director of solid waste apologize the our Katherine Barnett

219
00:19:13,440 --> 00:19:18,760
 white is out of the office today due to a family funeral but to answer that

220
00:19:18,760 --> 00:19:23,320
 question they are responsible for managing this city of didn't simply

221
00:19:23,320 --> 00:19:27,360
 sustainable plans so they work closely with the community and interested groups

222
00:19:27,360 --> 00:19:33,520
 on reducing water consumption conservation environmental protection

223
00:19:33,520 --> 00:19:39,520
 things of that nature so it's important from the management of the upstream the

224
00:19:39,520 --> 00:19:43,440
 watersheds ensuring that the right water quality and then downstream ensuring

225
00:19:43,440 --> 00:19:47,240
 that consumption is minimized so that we can maximize the benefit to our growing

226
00:19:47,240 --> 00:19:53,720
 city so may I presume that this full-time equivalents are for the

227
00:19:53,720 --> 00:19:59,840
 entire utility apartment and not just for the water department there are as

228
00:19:59,840 --> 00:20:04,520
 Stephen had pointed out city a solid waste department does have three public

229
00:20:04,520 --> 00:20:08,720
 education and outreach that are assigned specifically to doing the outreach for

230
00:20:08,720 --> 00:20:13,360
 sustained for our solid waste group but there was also within the

231
00:20:13,360 --> 00:20:19,240
 sustainability piece there are folks that specifically do water outreach and

232
00:20:19,240 --> 00:20:25,000
 water conservation type of work so even though that we each transfer funds into

233
00:20:25,000 --> 00:20:29,840
 it to support their efforts it's almost a dotted line relationship to the work

234
00:20:29,840 --> 00:20:35,800
 that they do between the departments okay so these these five point five

235
00:20:35,800 --> 00:20:40,040
 full-time equivalents are assigned to the water department not to the utility

236
00:20:40,040 --> 00:20:45,480
 department overall they're assigned to sustainability or environmental services

237
00:20:45,480 --> 00:20:51,200
 through the sustainability group but they work it's they're not within the

238
00:20:51,200 --> 00:21:02,880
 water but they help fund them okay so there's transfers that take care of the

239
00:21:02,880 --> 00:21:06,160
 time they spend with the different utilities correct okay correct is that

240
00:21:06,160 --> 00:21:11,880
 basically what you're looking for Lee I think so yeah these are not general

241
00:21:11,880 --> 00:21:16,160
 funded positions they are funded through the enterprises in the utilities so so

242
00:21:16,160 --> 00:21:21,040
 mr. chair so I guess try to answer the question here so traditionally

243
00:21:21,040 --> 00:21:24,560
 sustainability has been in water because they reported to the director of water

244
00:21:24,560 --> 00:21:30,200
 so rather than have a separate standalone internal service fund this is just

245
00:21:30,200 --> 00:21:34,200
 traditionally the way that it's where it's been budgeted currently this group

246
00:21:34,200 --> 00:21:39,040
 actually reports to Brian Borner the director of solid waste and I think we

247
00:21:39,040 --> 00:21:42,040
 just made the decision just to leave it where it is just because traditionally

248
00:21:42,040 --> 00:21:46,080
 that's where it's been but again the cost and the services they provide cut

249
00:21:46,080 --> 00:21:49,680
 across the various utilities and there's funding sources that come into this fund

250
00:21:49,680 --> 00:21:53,080
 to offset those costs so that the water fund and the rates don't necessarily

251
00:21:53,080 --> 00:22:00,320
 bear the full burden of that particular division okay so if I can just boil it

252
00:22:00,320 --> 00:22:04,520
 down for myself here in simplicity sake there are certain full-time equivalents

253
00:22:04,520 --> 00:22:10,200
 assigned to each department for the sustainability function is that more

254
00:22:10,200 --> 00:22:15,440
 or less correct more or less that is correct okay thank you that's all just

255
00:22:15,440 --> 00:22:21,120
 it caught my eye there thank you no worries thank you

256
00:22:21,120 --> 00:22:30,960
 move on mr. gay this is a lot taller than I am all right see if we can get back to

257
00:22:30,960 --> 00:22:33,400
 where we were

258
00:22:46,440 --> 00:22:57,320
 one second so moving forward talking about our areas focus areas and status

259
00:22:57,320 --> 00:23:01,400
 updates major maintenance the focus areas are major maintenance if the

260
00:23:01,400 --> 00:23:05,320
 structure improvements and new technology with regards to major

261
00:23:05,320 --> 00:23:08,520
 maintenance upgrades to Lake Louisville water treatment plant they'll be

262
00:23:08,520 --> 00:23:12,680
 completed this year and those are focused on some pump rehabilitations some yard

263
00:23:12,680 --> 00:23:17,680
 piping and some electrical work raw water condition assessment that's a 27

264
00:23:17,680 --> 00:23:22,880
 inch raw water line to Lake Louisville that's been completed and at this point

265
00:23:22,880 --> 00:23:28,160
 there's been no no issues of concern identified but we're still waiting for

266
00:23:28,160 --> 00:23:32,960
 the final report on the for the robotic inspection infrastructure

267
00:23:32,960 --> 00:23:36,920
 improvements the Lake Ray Roberts and a water treatment plant capacity rerate

268
00:23:36,920 --> 00:23:42,280
 that's to take Ray Roberts from a 20 MGD million gallons per day capacity up to

269
00:23:42,280 --> 00:23:45,880
 26 million gallons a day that's under design you'll hear a little hear a

270
00:23:45,880 --> 00:23:49,920
 little bit more about that later on in the presentation northwest booster pump

271
00:23:49,920 --> 00:23:54,680
 station and transmission line the design has been complete and the north west

272
00:23:54,680 --> 00:23:59,480
 north-south water pipeline I-35 to scripture is under construction with

273
00:23:59,480 --> 00:24:04,800
 regards to technology we're currently evaluating there's assessment being

274
00:24:04,800 --> 00:24:09,760
 conducted currently to evaluate the need to transition our metering platform from

275
00:24:09,760 --> 00:24:14,440
 its current platform which is an automated meter reading system to an

276
00:24:14,440 --> 00:24:21,040
 advanced meter reading infrastructure this man regarding the Lake Ray Roberts

277
00:24:21,040 --> 00:24:28,360
 water treatment plant capacity what does rewrite mean rerate is to we have to

278
00:24:28,360 --> 00:24:32,960
 apply to the states we make improvements at the plant that improve the capacity

279
00:24:32,960 --> 00:24:37,320
 our ability to treat water and so we have to apply to the state to rerate it

280
00:24:37,320 --> 00:24:41,720
 because it's so the state determines how much capacity the plant is allowed to

281
00:24:41,720 --> 00:24:47,960
 produce so that's what the rerate means okay thank you thank you

282
00:25:04,160 --> 00:25:18,920
 just waiting for it to advance okay so our goals for 21 22 are to complete the

283
00:25:18,920 --> 00:25:24,960
 Ray Roberts treatment plant project again rerating it from 28 million gallons a

284
00:25:24,960 --> 00:25:28,880
 day to 26 million gallons a day complete the construction of the northwest water

285
00:25:28,880 --> 00:25:35,960
 pipeline I-35 to scripture relocate the water lines along I-35 as part of the

286
00:25:35,960 --> 00:25:40,640
 tech stops project complete the construction of the northwest booster

287
00:25:40,640 --> 00:25:44,840
 pump station and transmission line revise our emergency response plan

288
00:25:44,840 --> 00:25:49,200
 response recovery plan based off of the most recent winter storm I believe house

289
00:25:49,200 --> 00:25:54,520
 bill 2 required us to to look more closely at backup power generation and

290
00:25:54,520 --> 00:26:00,200
 dual feeds to our facilities survey the distribution system to identify the lead

291
00:26:00,200 --> 00:26:04,160
 service lines in compliance with the lead and copper rule implement the

292
00:26:04,160 --> 00:26:09,600
 recommendations if any from the advanced metering infrastructure study and then

293
00:26:09,600 --> 00:26:14,320
 develop an asset management program for our vertical infrastructure again the

294
00:26:14,320 --> 00:26:18,680
 vertical infrastructure is that those plants booster pump stations lift

295
00:26:18,680 --> 00:26:27,920
 stations so some some operational data this is the 2020 2021 production and so

296
00:26:27,920 --> 00:26:31,400
 if you can see we got highlighted right there in February we had a slight uptick

297
00:26:31,400 --> 00:26:36,600
 in demand on the system from the tropical storm you can see that it looks

298
00:26:36,600 --> 00:26:41,160
 like you know demands are tapering off in May that's primarily due to wet

299
00:26:41,160 --> 00:26:45,360
 weather I just checked with our superintendent over water treatment this

300
00:26:45,360 --> 00:26:52,400
 morning and from the end of May to to current we're right about 630 million

301
00:26:52,400 --> 00:26:56,400
 gallons of production so we're back up in alignment with what we should be so

302
00:26:56,400 --> 00:27:03,160
 I'm sorry that the graph doesn't show that right now this this graph shows the

303
00:27:03,160 --> 00:27:08,440
 the max daily water demand in the system the light blue line represents the

304
00:27:08,440 --> 00:27:13,080
 demand system wide and that's based off of it's a very conservative estimate

305
00:27:13,080 --> 00:27:19,560
 looking at our demand plus the impacts of a drought without any conservation

306
00:27:19,560 --> 00:27:24,720
 measures the dark blue line represents the growth and additional capacity

307
00:27:24,720 --> 00:27:29,540
 needed the dashed black line shows our current capacity between both Ray

308
00:27:29,540 --> 00:27:32,960
 Roberts and Lake Louisville and then remember we talked earlier about that

309
00:27:32,960 --> 00:27:38,880
 rerate project over at Ray Roberts that one we looked at we're expecting to

310
00:27:38,880 --> 00:27:43,060
 complete construction in 2022 which will increase that capacity and that's what

311
00:27:43,060 --> 00:27:47,680
 that black line looks like so we're we're we're right on on schedule for our

312
00:27:47,680 --> 00:27:54,760
 expected growth so some other operation operational information regarding our

313
00:27:54,760 --> 00:27:58,520
 major maintenance hydrant flushing and meter replacement or two matrix that we

314
00:27:58,520 --> 00:28:07,000
 look at we in 2019 we flushed roughly 10,000 hydrants roughly 11,000 year to

315
00:28:07,000 --> 00:28:13,680
 date we're at 5,900 we'll end the year we believe at 9,000 hydrants being flushed

316
00:28:13,680 --> 00:28:18,240
 and that's more for water quality to remove sediments from the lines and our

317
00:28:18,240 --> 00:28:24,600
 goal for 2021 is 9,000 hydrants meter replacement this again this is an effort

318
00:28:24,600 --> 00:28:29,200
 to ensure meter accuracy to replace the ones that are failing in the system in

319
00:28:29,200 --> 00:28:38,760
 2018-19 we did 2,800 we're currently at 945 and we expect to end the year at

320
00:28:38,760 --> 00:28:43,560
 about 1,500 meters the asterisk in our projections for next year is going to

321
00:28:43,560 --> 00:28:47,560
 it's predicated on the results of the AMI study if whether or not there's a

322
00:28:47,560 --> 00:28:53,440
 recommendation to replace the platform so that will influence those numbers

323
00:28:54,760 --> 00:28:59,920
 another another matrix we look at is the replacement of our infrastructure so we

324
00:28:59,920 --> 00:29:04,680
 have in-house crews that do water line replacement and we have capital projects

325
00:29:04,680 --> 00:29:09,200
 that deliver projects for us for the horizontal infrastructure that sets the

326
00:29:09,200 --> 00:29:15,640
 water lines and the valves in 2019 the organization made a very strategic move

327
00:29:15,640 --> 00:29:23,480
 to align the replacement of the water infrastructure with our street

328
00:29:23,480 --> 00:29:28,240
 rehabilitation bond program and the capital team has been leading that

329
00:29:28,240 --> 00:29:32,200
 effort and if you can look at the numbers just across the bottom in 18 to

330
00:29:32,200 --> 00:29:38,920
 19 we only did 17,000 linear feet in 2019-2020 that number went up to 30,000

331
00:29:38,920 --> 00:29:44,200
 linear feet we're on track this year to hit 40,000 linear feet and our goal for

332
00:29:44,200 --> 00:29:48,240
 next year is 41,000 linear feet and that's primarily due to that that

333
00:29:48,240 --> 00:29:54,000
 realignment of efforts and I think with that piece I'm done with the operational

334
00:29:54,000 --> 00:29:57,480
 pieces and all but I'll still be hanging around so we have the wastewater budget

335
00:29:57,480 --> 00:30:06,760
 to present and I'll turn it over to Nick now thank you thank you Steven just want

336
00:30:06,760 --> 00:30:09,600
 to say Steven and his team's been great putting this budget together so doing a

337
00:30:09,600 --> 00:30:14,360
 great job there I definitely appreciate their work so the financial assumptions

338
00:30:14,360 --> 00:30:16,880
 really quick want to review these to everybody before we get started looking

339
00:30:16,880 --> 00:30:21,120
 at the pro forma and the revenue we do have a 2% growth forecasting out years

340
00:30:21,120 --> 00:30:25,680
 for our volume forecast that Stephen had reviewed with you shortly ago and the

341
00:30:25,680 --> 00:30:30,720
 hunter coal ranch rate revenue is included starting in fiscal year 2023

342
00:30:30,720 --> 00:30:35,920
 there's a 2% again we are continuing to utilize impact fee funding to revenue

343
00:30:35,920 --> 00:30:39,440
 fund eligible projects I realize a couple of the board members may not have

344
00:30:39,440 --> 00:30:42,440
 been here last year and we talked about this so I'll definitely review it with

345
00:30:42,440 --> 00:30:46,640
 you here shortly and the forecast does include the hunter coal ranch development

346
00:30:46,640 --> 00:30:50,480
 starting in fiscal year 2023 this is consistent across each of the utilities

347
00:30:50,480 --> 00:30:54,920
 but we did want to bring this to your attention and then a 3% growth and

348
00:30:54,920 --> 00:31:01,560
 forecasted and expenses in the out years this is the detailed revenue by

349
00:31:01,560 --> 00:31:06,160
 operational area so you can see residential water cells at the top line

350
00:31:06,160 --> 00:31:11,280
 second commercial water cells and you see water for resale and so let me walk

351
00:31:11,280 --> 00:31:15,160
 you through this really quick 2021 is the current fiscal year we're in this

352
00:31:15,160 --> 00:31:19,060
 will run through September 30th of this year and you can see we had budgeted

353
00:31:19,060 --> 00:31:23,560
 revenue of 49 million we are forecasting that to come in a little bit below

354
00:31:23,560 --> 00:31:26,800
 budget is based on some of the recent wet weather that we've had in the water

355
00:31:26,800 --> 00:31:31,200
 utility or you know in rainfall so the water utility is forecast a little bit

356
00:31:31,200 --> 00:31:35,120
 of revenue decrease so I'll show that to you in the 10-year forecast there's a

357
00:31:35,120 --> 00:31:38,120
 little bit more planned use of reserves that we're planning on this year than

358
00:31:38,120 --> 00:31:43,800
 originally budgeted for in 2022 you can see we have planned revenues of

359
00:31:43,800 --> 00:31:51,640
 52.2 million expenses by category so all the expenses within the utility there's

360
00:31:51,640 --> 00:31:55,640
 a vast number of object codes we budget for object codes could be anything from

361
00:31:55,640 --> 00:32:01,600
 public safety you know equipment PPE it could be office supplies we roll those

362
00:32:01,600 --> 00:32:05,640
 up into those these categories as to starting at the top you can see we have

363
00:32:05,640 --> 00:32:09,600
 personal services we go down to materials and supplies maintenance and

364
00:32:09,600 --> 00:32:13,240
 repair insurance and miscellaneous a little bit of return on investment and

365
00:32:13,240 --> 00:32:17,080
 franchise fees and then moving down the page you can see some supplemental

366
00:32:17,080 --> 00:32:21,480
 packages that are being requested this year so in fiscal year 2022 the

367
00:32:21,480 --> 00:32:26,120
 preliminary budget has 51.5 million expenses and supplemental packages are

368
00:32:26,120 --> 00:32:29,520
 simply those new requests those new initiatives the department's looking to

369
00:32:29,520 --> 00:32:32,840
 do this upcoming fiscal year we'll review those with you shortly if you've

370
00:32:32,840 --> 00:32:38,640
 got detailed questions Stephen can definitely address those for you this is

371
00:32:38,640 --> 00:32:43,540
 the expenses by operational area so you can see water administration and you

372
00:32:43,540 --> 00:32:47,040
 can see utility administration to mr. Rodback's question of that one going

373
00:32:47,040 --> 00:32:51,720
 away in fiscal year 2021 it was combined with admin and you can see

374
00:32:51,720 --> 00:32:55,620
 sustainability and there were a few questions on that earlier production

375
00:32:55,620 --> 00:32:59,640
 distribution metering lab and total expenses for the preliminary budget

376
00:32:59,640 --> 00:33:06,480
 which in your very far right column is 51.5 million so this is the ten year

377
00:33:06,480 --> 00:33:09,520
 forecast I'm gonna spend a little bit of time on this slide just really walk

378
00:33:09,520 --> 00:33:13,320
 through it and give you as much detail as possible and answer any questions that

379
00:33:13,320 --> 00:33:16,120
 you may have once we get through the presentation if I need to pull this back

380
00:33:16,120 --> 00:33:20,800
 up and be happy to do so so fiscal year 2021 is the current budget that we're in

381
00:33:20,800 --> 00:33:25,040
 here in this column and you can see that 49 million in revenues that I reviewed

382
00:33:25,040 --> 00:33:30,680
 reviewed with you on the previous slide and expenses of 52.9 million so the

383
00:33:30,680 --> 00:33:36,000
 adopted budget did have 3.9 million in reserve usage adopted by both the PDB and

384
00:33:36,000 --> 00:33:41,520
 City Council this year we are forecasting about 48.7 million in

385
00:33:41,520 --> 00:33:45,760
 revenues this coming year so a little bit less in revenue due to some of this

386
00:33:45,760 --> 00:33:49,000
 recent wet weather that we're experiencing and you can see end of your

387
00:33:49,000 --> 00:33:54,760
 expenses about 51.5 so still planning to use some reserves 2.8 million that we do

388
00:33:54,760 --> 00:33:58,160
 fully intend to monitor this as we progress through the summer we

389
00:33:58,160 --> 00:34:02,840
 definitely are bringing an update this fall or next spring for this utility so

390
00:34:02,840 --> 00:34:06,800
 the preliminary fiscal year 2022 budget is in this column right here that I'm

391
00:34:06,800 --> 00:34:13,480
 pointing to we have 52.2 million in revenue and 51.5 million in expenses and

392
00:34:13,480 --> 00:34:17,000
 you can see five hundred thirty one thousand in supplemental packages that

393
00:34:17,000 --> 00:34:23,040
 are included on this line for total expenses of 51.5 that I mentioned so we

394
00:34:23,040 --> 00:34:27,560
 do have a surplus or a positive revenue of six hundred eighty six thousand this

395
00:34:27,560 --> 00:34:31,880
 coming fiscal year in the preliminary budget moving down the page we talked

396
00:34:31,880 --> 00:34:35,200
 about this in April a little bit but you can see the reserve requirement the

397
00:34:35,200 --> 00:34:40,600
 current reserve both in this utility so in the blue is the current reserve that

398
00:34:40,600 --> 00:34:44,840
 we have from an operating standpoint so you can see in the preliminary budget we

399
00:34:44,840 --> 00:34:49,640
 have 20.2 million in reserves with that target that we're not recommended to

400
00:34:49,640 --> 00:34:54,920
 change to be 16.5 to 24.7 so you can see we're well within that

401
00:34:54,920 --> 00:34:59,320
 reserve target in the current year I do want to point out that we stay above it

402
00:34:59,320 --> 00:35:05,840
 each year we slightly dip a bullet below in 2031 and there are a few years that we

403
00:35:05,840 --> 00:35:11,400
 do show some net income out here starting in fiscal year 24 through 2027

404
00:35:11,400 --> 00:35:18,040
 5.4 million in 2025 with the goal being is to build up a capital reserve to help

405
00:35:18,040 --> 00:35:22,680
 us fund that debt service that new plan expansion coming on so many PB members

406
00:35:22,680 --> 00:35:26,200
 know we do have a large capital expense about 90 million plugged into the

407
00:35:26,200 --> 00:35:30,720
 pro forma starting in fiscal year 2026 that debt service will actually start

408
00:35:30,720 --> 00:35:36,040
 hitting us excuse me it's in the pro forma in 2027 that debt service will hit

409
00:35:36,040 --> 00:35:42,200
 us in 2028 so when you see this number jump from 16.5 to 21.3 that is that debt

410
00:35:42,200 --> 00:35:46,600
 and our full intention is to build that fund balance up to help offset that debt

411
00:35:46,600 --> 00:35:51,320
 moving down the page a little bit more we do have an impact fee capital reserve

412
00:35:51,320 --> 00:35:55,400
 you can see it does have 9 million in it that money does go away in fiscal year

413
00:35:55,400 --> 00:36:00,920
 2024 our intention is to take 9 million out of the impact fee reserve and cash

414
00:36:00,920 --> 00:36:05,360
 fund the design of that lake facility so really trying to minimize that debt

415
00:36:05,360 --> 00:36:11,400
 issuance for that plan expansion the plan development lines and the impact

416
00:36:11,400 --> 00:36:16,120
 fee reserve those are just result revolving lines that we carry forward for

417
00:36:16,120 --> 00:36:21,040
 different developments and may come in the community let me see if there's

418
00:36:21,040 --> 00:36:25,840
 anything else in here I want to point out we can come back to this of course

419
00:36:25,840 --> 00:36:31,320
 first questions would be happy to answer them in a little bit this is the

420
00:36:31,320 --> 00:36:35,240
 preliminary five-year capital plan for the water utility so what we've done is

421
00:36:35,240 --> 00:36:38,640
 we've summarized it by different debt issuance or revenue funding for this

422
00:36:38,640 --> 00:36:43,480
 utility so in fiscal year 2022 we have 41 million planned in debt issuance you

423
00:36:43,480 --> 00:36:47,640
 can see that number right here in this column revenue funding so this is funded

424
00:36:47,640 --> 00:36:52,500
 by that rate revenue that we charge our customers for operating 9.9 million of

425
00:36:52,500 --> 00:36:56,640
 revenue funding we had some aid in construction impact fee funding so at

426
00:36:56,640 --> 00:37:01,360
 3.5 million that you see there that is revenue funding eligible projects and

427
00:37:01,360 --> 00:37:05,160
 those projects were called out in a study that we completed in 2019 and

428
00:37:05,160 --> 00:37:09,480
 their growth related and what that does is that allows us to minimize the amount

429
00:37:09,480 --> 00:37:12,280
 of debt we're issuing for those projects we're really trying to focus on cash

430
00:37:12,280 --> 00:37:16,440
 funding any projects that we possibly can and you've seen some vehicle

431
00:37:16,440 --> 00:37:21,240
 replacement of 309,000 for a total capital plan of 55 million one thing I

432
00:37:21,240 --> 00:37:24,360
 will say this year we are doing the capital plan a little bit differently to

433
00:37:24,360 --> 00:37:27,560
 make sure that we are cohesive across the city that we are communicating we

434
00:37:27,560 --> 00:37:31,200
 actually have an internal department meetings with engineering water

435
00:37:31,200 --> 00:37:34,740
 wastewater electric to make sure for budgeting for a field service

436
00:37:34,740 --> 00:37:38,800
 replacement job in the water utility the streets department knows about it just

437
00:37:38,800 --> 00:37:42,160
 to make sure it's consistent across the city so those conversations are ongoing

438
00:37:42,160 --> 00:37:45,840
 this budget could change slightly based on those conversations but I just want

439
00:37:45,840 --> 00:37:52,880
 to bring that up to the public utility board makes you aware of it so what is

440
00:37:52,880 --> 00:37:58,240
 aid in construction it seems like it's a grant sort of aid in construction is

441
00:37:58,240 --> 00:38:01,840
 simply contributions we get so from developments that come into the

442
00:38:01,840 --> 00:38:05,600
 community that may install waterline we get that revenue this is gives us the

443
00:38:05,600 --> 00:38:09,740
 mechanism to expense that so it's separate from the impact fees that is

444
00:38:09,740 --> 00:38:13,000
 correct it is separate from the impact fees it's actually revenue funding

445
00:38:13,000 --> 00:38:20,320
 revenue received from developments yeah what we want to do this is not an

446
00:38:20,320 --> 00:38:23,320
 extensive list of all the projects that the public utility board like to see it

447
00:38:23,320 --> 00:38:26,760
 will be happy to provide it this is the major projects these make up thirty eight

448
00:38:26,760 --> 00:38:30,600
 point five million of the capital plan this coming fiscal year and you can see

449
00:38:30,600 --> 00:38:34,440
 the Northwest transmission lines which is fourteen point nine million the

450
00:38:34,440 --> 00:38:37,280
 Ray Roberts capacity rerate and performance upgrades at Stephen

451
00:38:37,280 --> 00:38:41,640
 emission earlier of 11 million we have Elman Locust of four million and then

452
00:38:41,640 --> 00:38:45,280
 the annual field service replacements of two point eight million these are the

453
00:38:45,280 --> 00:38:48,080
 ones I mentioned earlier really important we do those cross-departmental

454
00:38:48,080 --> 00:38:53,560
 meetings to make sure that we have a consistent capital plan across the city

455
00:38:53,560 --> 00:39:00,840
 and we can touch on this if you want this is an example of how we manage

456
00:39:00,840 --> 00:39:04,080
 those cash flows one one other thing we did in the capital plan this year is

457
00:39:04,080 --> 00:39:08,680
 really we met with Stevens group and we had them take a look at the cash flows

458
00:39:08,680 --> 00:39:12,360
 of different projects the main reason for this exercise is to make sure we're

459
00:39:12,360 --> 00:39:17,800
 not issuing debt early or earlier than it's needed so this is really a good

460
00:39:17,800 --> 00:39:22,120
 exercise we did this year with the apartment so you can see for example you

461
00:39:22,120 --> 00:39:25,160
 know fiscal year 2021 for the booster pump station they only needed a million

462
00:39:25,160 --> 00:39:28,760
 dollars we could delay issuing that additional nine point four or five

463
00:39:28,760 --> 00:39:34,000
 million till 2022 so really looking at those projects in time and amount from a

464
00:39:34,000 --> 00:39:39,480
 cash flow perspective this gets into the budget request these are supplemental

465
00:39:39,480 --> 00:39:43,480
 packages that I mentioned earlier serves four hundred thirteen thousand five

466
00:39:43,480 --> 00:39:46,960
 hundred dollars worth of supplemental packages you can see anything from system

467
00:39:46,960 --> 00:39:52,240
 repair materials of twenty five thousand the major ones being those line location

468
00:39:52,240 --> 00:39:55,960
 for a hundred and fifty thousand and then the street rehab for two hundred

469
00:39:55,960 --> 00:39:59,240
 thousand and when it says streets workload what that is that's to hire a

470
00:39:59,240 --> 00:40:03,600
 contractor to come out and help us and do the street cuts repair the the street

471
00:40:03,600 --> 00:40:07,800
 where we fix those water lines and the street department is extremely busy on

472
00:40:07,800 --> 00:40:11,600
 their end too so we like to get some help in for the water utility so just

473
00:40:11,600 --> 00:40:18,240
 clarify on that amount all you really have to pay for is that four foot on the

474
00:40:18,240 --> 00:40:24,200
 top the pavement portion of the two to four foot of whatever your cut is right

475
00:40:24,200 --> 00:40:29,560
 that's that's correct yeah yeah yeah it's almost like if you think about it

476
00:40:29,560 --> 00:40:32,480
 the field service replacements or the water line itself or budgeted for in the

477
00:40:32,480 --> 00:40:36,040
 annual filter replacement this would go to our contract we help us repair those

478
00:40:36,040 --> 00:40:46,120
 patches actually sure I think I got through here let me scroll the bottom of

479
00:40:46,120 --> 00:40:48,240
 it

480
00:40:48,240 --> 00:40:54,600
 the calendar so this is in each presentation we do not have to review

481
00:40:54,600 --> 00:40:59,000
 the calendar in detail in each of them we definitely want to give you a glimpse

482
00:40:59,000 --> 00:41:02,360
 of what's to come in the coming weeks as we continue our talks of the preliminary

483
00:41:02,360 --> 00:41:09,280
 budget so June 28th of course today we're doing the presentation July 12th we have

484
00:41:09,280 --> 00:41:13,040
 a conversation coming up with a PB will also include a rate discussion so to

485
00:41:13,040 --> 00:41:16,600
 mr. Rob backs question earlier regarding the rate structure that presentation

486
00:41:16,600 --> 00:41:21,440
 will include some considerations for the PB to consider in this upcoming fiscal

487
00:41:21,440 --> 00:41:28,000
 year on July 20th we have the DME City Council presentation July 27th water

488
00:41:28,000 --> 00:41:34,120
 wastewater is always will go forward to City Council but then July 26 at the PB

489
00:41:34,120 --> 00:41:38,120
 and rate approval and then we get into that proposed budget being presented

490
00:41:38,120 --> 00:41:42,280
 it's actually August the 2nd not August the 3rd apologize that that error but

491
00:41:42,280 --> 00:41:47,120
 it's actually August the 2nd is the City Council budget work session so budgeted

492
00:41:47,120 --> 00:41:53,360
 option will be September 21st and then I'll take it down for questions for

493
00:41:53,360 --> 00:42:01,600
 Stephen or myself Mr. Chairman I have a quick question or is a pub board part of

494
00:42:01,600 --> 00:42:08,320
 that City Council workshop you mentioned on the schedule mr. Robert currently

495
00:42:08,320 --> 00:42:13,600
 and this the PB historically has not participated in the budget workshop

496
00:42:13,600 --> 00:42:17,760
 annually you know if you'd like to have a joint meeting with City Council we

497
00:42:17,760 --> 00:42:20,680
 could talk about that but the budget workshop itself at the beginning of

498
00:42:20,680 --> 00:42:24,640
 August the Public Utility Board is historically not been included oh my

499
00:42:24,640 --> 00:42:27,920
 question is purely informational since I'm one of the newer members of the

500
00:42:27,920 --> 00:42:35,080
 board thank you I just had a quick question about the the bond debt can you

501
00:42:35,080 --> 00:42:41,600
 remind me how far we have bonds approved how far in the future so the the PB and

502
00:42:41,600 --> 00:42:45,160
 City Council only adopts the first year of the budget so this year you'll adopt

503
00:42:45,160 --> 00:42:49,240
 the fiscal year 2022 budget you'll give us authority for the operating budget

504
00:42:49,240 --> 00:42:54,920
 the capital plan for this year okay not adopt future bond issuances those are

505
00:42:54,920 --> 00:43:00,760
 just potential that's planned that's our planning purposes right to the plan we

506
00:43:00,760 --> 00:43:04,520
 what we're looking to do is plan future rate increases if we need them looking

507
00:43:04,520 --> 00:43:08,320
 at the holistic picture of ten years and looking at that capital plan it helps us

508
00:43:08,320 --> 00:43:13,240
 feed that ten-year picture but you only adopt one year in the utilities so it's

509
00:43:13,240 --> 00:43:21,520
 really a ten-year I think I was surprised that in a lot of these

510
00:43:21,520 --> 00:43:27,640
 presentations the bond debt was equal to the production expenses worse or so and

511
00:43:27,640 --> 00:43:31,780
 so I think we all sort of want to reduce the bond debt or see if you know a

512
00:43:31,780 --> 00:43:37,200
 future in which we're not depending so much on debt so absolutely yeah

513
00:43:37,200 --> 00:43:40,680
 absolutely and we look at that every year and yeah and you bring up a great

514
00:43:40,680 --> 00:43:44,700
 point that that is the focus of the utilities is to try to maximize the

515
00:43:44,700 --> 00:43:47,800
 revenue funding as much as possible without putting an undue burden on the

516
00:43:47,800 --> 00:43:51,680
 ratepayers and minimize that debt issuance and it helps us you know

517
00:43:51,680 --> 00:43:54,800
 minimize that debt payment over a ten-year period in doing that and I

518
00:43:54,800 --> 00:43:58,880
 think that was one of the main reasons for starting to use impact fees to

519
00:43:58,880 --> 00:44:03,720
 revenue from projects was to delay that bond issue and so absolutely okay thank

520
00:44:03,720 --> 00:44:13,140
 you any other questions for Nick this item then chair if I may if we could

521
00:44:13,140 --> 00:44:16,520
 move environmental services up David Gaines the assistant city managers here

522
00:44:16,520 --> 00:44:19,720
 to give that presentation and then maybe we'll flip to wastewater after that if

523
00:44:19,720 --> 00:44:25,520
 that's okay with everybody okay any problem with that at all

524
00:44:25,520 --> 00:44:32,160
 good morning David Gaines assistant city manager I know there was some

525
00:44:32,160 --> 00:44:36,120
 discussion on environmental services as we went through the water presentation

526
00:44:36,120 --> 00:44:41,160
 understandably so wanted to just pull this a brief presentation that we have

527
00:44:41,160 --> 00:44:46,000
 regarding environmental services up and really from my perspective just talk a

528
00:44:46,000 --> 00:44:49,760
 little bit about what the changes were making with environmental services so I'm

529
00:44:49,760 --> 00:44:53,120
 going to talk about that at a high level I'll go to the presentation very quickly

530
00:44:53,120 --> 00:44:56,560
 and we obviously have staff here to answer any specific questions that you

531
00:44:56,560 --> 00:45:01,120
 have so what what what we're doing with environmental services is fairly

532
00:45:01,120 --> 00:45:05,320
 straightforward we are taking all the positions and the divisions that

533
00:45:05,320 --> 00:45:08,240
 currently exist

534
00:45:08,240 --> 00:45:28,640
 so we're taking all the oppositions in a vision that currently exists both in

535
00:45:28,640 --> 00:45:33,160
 solid waste and water water houses our environmental services team right now and

536
00:45:33,160 --> 00:45:38,200
 solid waste houses our sustainability team and combining those into one group

537
00:45:38,200 --> 00:45:42,520
 and then we're going to hire a an environmental services director so

538
00:45:42,520 --> 00:45:46,320
 that's not a position that's it that's existed thus far we have an environmental

539
00:45:46,320 --> 00:45:50,640
 services assistant director and obviously our sustainability group

540
00:45:50,640 --> 00:45:55,040
 really the purpose of doing this of combining the groups first those

541
00:45:55,040 --> 00:45:57,920
 divisions have a lot of synergies they all work they work together very well

542
00:45:57,920 --> 00:46:02,800
 but also having a position coming at the director level to to head our

543
00:46:02,800 --> 00:46:07,360
 environmental services team is important for the city right now given where we

544
00:46:07,360 --> 00:46:11,320
 are given the focus on environmental issues as we move forward so this has

545
00:46:11,320 --> 00:46:15,200
 been something we talked about at a high level with the city for the past year or

546
00:46:15,200 --> 00:46:19,220
 two to get to this point so we'll feel really good about the path that we're

547
00:46:19,220 --> 00:46:23,160
 taking and placing that emphasis by getting a director level position I

548
00:46:23,160 --> 00:46:27,600
 think as you know we had Dr. Banks here he was he had such a history with

549
00:46:27,600 --> 00:46:30,680
 environmental services but also with water wastewater that he wore a lot of

550
00:46:30,680 --> 00:46:35,360
 different hats this makes a lot of sense to create a separate division and it

551
00:46:35,360 --> 00:46:39,480
 also gives some of that accountability to the water group I think it's worth

552
00:46:39,480 --> 00:46:43,520
 great having environmental services in water from the pretreatment the

553
00:46:43,520 --> 00:46:49,160
 laboratory and down to the the watershed as well but having that as a separate

554
00:46:49,160 --> 00:46:53,480
 division does add something because a lot of what they're doing right is

555
00:46:53,480 --> 00:46:58,280
 checking what water and wastewater do so that that works out very well but

556
00:46:58,280 --> 00:47:02,800
 obviously there's going to be one of the priorities as we go forward and hiring

557
00:47:02,800 --> 00:47:06,440
 that position is that they can work across the organization with all of our

558
00:47:06,440 --> 00:47:11,000
 utilities and throughout the city so that's the purpose of making that change

559
00:47:11,000 --> 00:47:16,240
 as far as from a fund perspective these will be housed in the water fund similar

560
00:47:16,240 --> 00:47:20,040
 to how drainage is housed in the wastewater fund it'll just be a section

561
00:47:20,040 --> 00:47:24,600
 of the water fund from a funding perspective but be a separate HBU but it

562
00:47:24,600 --> 00:47:28,640
 does mean those positions are moving from solid waste over to those in the

563
00:47:28,640 --> 00:47:33,240
 solid waste fund over to the water fund and there'll be appropriate transfers to

564
00:47:33,240 --> 00:47:38,080
 to to go with that so that's again at a very high level what the change is as we

565
00:47:38,080 --> 00:47:40,960
 go into the fiscal year I'll run through these other the rest of these slides at

566
00:47:40,960 --> 00:47:45,080
 a high level as well and as I mentioned we have staff if there's any specific

567
00:47:45,080 --> 00:47:51,400
 questions on the detail so here you can see all those positions that I mentioned

568
00:47:51,400 --> 00:47:56,360
 grouped together it's total of 33 positions we are moving and you kind of

569
00:47:56,360 --> 00:48:00,080
 see the asterisk there in sustainability there's one position that works with

570
00:48:00,080 --> 00:48:03,680
 parks that's been in the sustainability group or we're just simply moving that

571
00:48:03,680 --> 00:48:12,120
 FTE out of parks as that's the appropriate placement of the FTE and I

572
00:48:12,120 --> 00:48:16,580
 high level some of those accomplishments from each of those groups sustainability

573
00:48:16,580 --> 00:48:20,640
 some very significant accomplishments a lot of work over the past year and

574
00:48:20,640 --> 00:48:25,200
 adopting the simply sustainability framework and then establishing that new

575
00:48:25,200 --> 00:48:29,960
 committee for implementation and then you see the last bullet point there just

576
00:48:29,960 --> 00:48:34,320
 want to again focus on that as we're all aware as we continue to make progress on

577
00:48:34,320 --> 00:48:39,920
 the comprehensive solid waste management plan environmental services again some

578
00:48:39,920 --> 00:48:45,680
 big ticket items over the past year with the TCEQ industrial pretreatment

579
00:48:45,680 --> 00:48:49,920
 streamlining and then obviously we've had a number of conversations on the

580
00:48:49,920 --> 00:48:53,760
 mosquito surveillance response plan as well so a lot that's been done over the

581
00:48:53,760 --> 00:49:00,400
 past year some of the goals for the groups heading into the next year

582
00:49:00,400 --> 00:49:04,480
 implementation of that frame of the sustainability framework for sure will

583
00:49:04,480 --> 00:49:10,960
 be a priority and then you can see each of those as we move down the list from

584
00:49:10,960 --> 00:49:15,760
 reduce recycling contamination to the community assessing the community

585
00:49:15,760 --> 00:49:20,160
 hazards and vulnerabilities on environmental services we're continuing

586
00:49:20,160 --> 00:49:24,440
 to expand those programs and cross-chain training with our watershed

587
00:49:24,440 --> 00:49:29,900
 protection gas well inspection staff and pretreatment obviously as we look to

588
00:49:29,900 --> 00:49:33,440
 bring in a director over all these groups these will be priorities as we

589
00:49:33,440 --> 00:49:44,240
 move into the next fiscal year budget highlights fairly straightforward here

590
00:49:44,240 --> 00:49:48,080
 you can really the only change you see as we look into preliminary budget just

591
00:49:48,080 --> 00:49:54,080
 from a financial standpoint is the sustainability group as we've lost that

592
00:49:54,080 --> 00:49:58,360
 position though that positions moved over to parts I will also point out that

593
00:49:58,360 --> 00:50:02,840
 the director position was able we were able to move positions around and use

594
00:50:02,840 --> 00:50:06,920
 vacancy to create the director level position and that is reflected in those

595
00:50:06,920 --> 00:50:09,840
 preliminary numbers

596
00:50:09,840 --> 00:50:17,480
 budget requests there's only one budget request and that's for an additional FTE

597
00:50:17,480 --> 00:50:22,040
 with our watershed group the stormwater inspector and this is really to meet our

598
00:50:22,040 --> 00:50:27,720
 goal of the three-week inspections right now our time frame is more in the five

599
00:50:27,720 --> 00:50:32,480
 week range of when those inspections get done so adding this FTE is with a pure

600
00:50:32,480 --> 00:50:37,040
 intention of meeting the goal of three weeks that we have set out for stormwater

601
00:50:37,040 --> 00:50:42,600
 inspections and that's it for the presentation I'll take the screen down

602
00:50:42,600 --> 00:50:46,800
 and happy to answer any questions about the the change that we've made from a

603
00:50:46,800 --> 00:50:49,760
 organizational structure and obviously we have staff available to answer any

604
00:50:49,760 --> 00:51:00,320
 detailed questions on those goals or moving forward any questions no thank

605
00:51:00,320 --> 00:51:02,960
 you all right thank you

606
00:51:30,320 --> 00:51:33,320
 [Applause]

607
00:52:00,320 --> 00:52:18,080
 it just proves you can be taught so for the wastewater business unit of water

608
00:52:18,080 --> 00:52:24,640
 utilities department the budget overview this is the organizational chart we went

609
00:52:24,640 --> 00:52:30,280
 through earlier with regards to the FTE summary David mentioned that new

610
00:52:30,280 --> 00:52:37,760
 stormwater FTE for the inspections looking back at 2019 and 20 we had 21.5

611
00:52:37,760 --> 00:52:47,680
 positions in 2020 to 2021 that was reduced to 107.5 and then the 109.5 in

612
00:52:47,680 --> 00:53:00,240
 21 22 represents the two new positions moved in from from from solid waste major

613
00:53:00,240 --> 00:53:04,480
 maintenance or our focus areas and status updates again major maintenance

614
00:53:04,480 --> 00:53:09,680
 infrastructure improvements and improvements to planning with regards to

615
00:53:09,680 --> 00:53:13,840
 major maintenance Hickory Creek old Alton lift station replacement is to be

616
00:53:13,840 --> 00:53:20,560
 completed in 2021 Lakeview interceptor project is currently under design with

617
00:53:20,560 --> 00:53:24,320
 regards to infrastructure improvements to the concrete water reclamation

618
00:53:24,320 --> 00:53:29,520
 facility solids handling project phase one is under design Hickory Creek

619
00:53:29,520 --> 00:53:34,640
 detention facility is under construction the Hickory Creek interceptor sewer phase

620
00:53:34,640 --> 00:53:38,600
 one and phase two are currently under construction and with regards to

621
00:53:38,600 --> 00:53:42,760
 improvements to planning I believe last week or the week before you approved the

622
00:53:42,760 --> 00:53:48,720
 us moving forward with the wastewater master plan and that is in in progress

623
00:53:48,720 --> 00:53:54,240
 for our goals for 21 22 we want to bid and mobilize the construction of the

624
00:53:54,240 --> 00:53:58,840
 concrete plan expansion phase one complete construction of the Hickory

625
00:53:58,840 --> 00:54:02,760
 Creek detention facility complete construction of the Hickory Creek

626
00:54:02,760 --> 00:54:08,320
 interceptor sewer pipe phase one to bid and mobilize on the construction of

627
00:54:08,320 --> 00:54:12,920
 Hickory Creek interceptor phase three and the dry fork interceptor project

628
00:54:12,920 --> 00:54:17,720
 complete construction of ropes and ranch water main connection projects

629
00:54:17,720 --> 00:54:21,200
 initiate the decommissioning of the ropes and ranch water treatment

630
00:54:21,200 --> 00:54:25,160
 wastewater treatment facility and complete an update to the impact fee

631
00:54:25,160 --> 00:54:31,400
 study like the this is very similar to that demand chart that I showed you on

632
00:54:31,400 --> 00:54:35,920
 the water side but this is really driven by TCEQ so that's the Texas Commission

633
00:54:35,920 --> 00:54:41,840
 on environmental quality the regulations clearly state that when a facility

634
00:54:41,840 --> 00:54:47,440
 reaches 75% of its design capacity so the capacity that that facility was

635
00:54:47,440 --> 00:54:52,480
 designed to treat we have to be we have to start designing a new our expansion

636
00:54:52,480 --> 00:54:57,920
 the regulations also state that when we hit that 90% of design capacity the

637
00:54:57,920 --> 00:55:03,320
 utility must be under construction of that expansion and so if you look in at

638
00:55:03,320 --> 00:55:08,960
 this chart in 2021 we get that 75% capacity mark we're currently under

639
00:55:08,960 --> 00:55:14,960
 design of the concrete improvements and we should we are on track to have will

640
00:55:14,960 --> 00:55:18,680
 be under construction next year on those improvements so we're well ahead of

641
00:55:18,680 --> 00:55:25,240
 schedule wastewater operational data major maintenance and linear feet so

642
00:55:25,240 --> 00:55:32,000
 with the collection system we clean and inspect the system annually and quite an

643
00:55:32,000 --> 00:55:37,040
 aggressive amount of linear footage 19 and 20 we got over a five hundred and

644
00:55:37,040 --> 00:55:42,880
 almost six hundred thousand linear feet of collection system cleaned 131,000

645
00:55:42,880 --> 00:55:49,640
 linear feet inspected we're on track for 2020 21 to complete the year with 120

646
00:55:49,640 --> 00:55:56,360
 linear feet 120,000 linear feet of inspection and 675,000 linear feet of

647
00:55:56,360 --> 00:56:04,400
 cleaning the goal for 21 22 is 120,000 linear feet of inspections and 675 linear

648
00:56:04,400 --> 00:56:11,280
 feet of cleaning like on the water side that alignment with the capital team and

649
00:56:11,280 --> 00:56:16,200
 the street rehabilitation program you can see the value in that that

650
00:56:16,200 --> 00:56:22,840
 adjustment in these figures right here 19 we were only able to install roughly

651
00:56:22,840 --> 00:56:29,200
 15,000 linear feet of pipe after that shift was made we did 21,000 this year

652
00:56:29,200 --> 00:56:37,540
 we're on track to do 31,000 and our goal for 21 22 is 31,000 and I believe that

653
00:56:37,540 --> 00:56:43,040
 was really quickly and I'll turn it over to Nick thank you

654
00:56:43,040 --> 00:56:50,240
 thank you Steve all right I'll walk us through the financials for wastewater so

655
00:56:50,240 --> 00:56:52,960
 the financial assumptions I want to review each one of these with you but

656
00:56:52,960 --> 00:56:56,560
 this is consistent between the water and wastewater utilities we do the two

657
00:56:56,560 --> 00:57:00,440
 percent growth forecast in the out years for the volume forecast and that 100

658
00:57:00,440 --> 00:57:04,640
 coal ranch development being included in fiscal year 2023 or starting in fiscal

659
00:57:04,640 --> 00:57:11,040
 year 2023 and these are revenues by different operational areas so you can

660
00:57:11,040 --> 00:57:14,440
 see very similar to water you have wastewater residential wastewater

661
00:57:14,440 --> 00:57:20,160
 commercial wastewater wholesale and we have other wastewater revenue and then

662
00:57:20,160 --> 00:57:25,360
 you have your cost of service transfers into this fund to recoup any charges or

663
00:57:25,360 --> 00:57:29,480
 a cost associated with doing activities for other operational areas around the

664
00:57:29,480 --> 00:57:34,200
 city we do have an impact fee transfer in a 4.2 million this upcoming fiscal

665
00:57:34,200 --> 00:57:37,720
 year and very similar to water we are using a portion of that to revenue fund

666
00:57:37,720 --> 00:57:45,000
 eligible projects these are expenses by categories and so as explained in water

667
00:57:45,000 --> 00:57:48,760
 these are grouped based on the type of purchases they may be so you can see

668
00:57:48,760 --> 00:57:52,160
 personnel expenses materials and supplies maintenance and repairs

669
00:57:52,160 --> 00:57:56,760
 insurance miscellaneous and skipping out to the bottom you can see that some cost

670
00:57:56,760 --> 00:58:00,720
 allocation transfers I'm going to the general fund other departments about the

671
00:58:00,720 --> 00:58:05,080
 city and then the capital outlays that revenue funding of projects and this

672
00:58:05,080 --> 00:58:09,000
 utility does have seven hundred eighty six thousand in supplemental packages or

673
00:58:09,000 --> 00:58:15,280
 review those with you here shortly and then expenses by operational area so you

674
00:58:15,280 --> 00:58:18,640
 can't see administration is going to zero it is important to note that this

675
00:58:18,640 --> 00:58:21,980
 group was combined with water administration that we visited about

676
00:58:21,980 --> 00:58:28,120
 earlier we have water reclamation horse collections filled services the drainage

677
00:58:28,120 --> 00:58:32,800
 utility is included down here so for several public utility boards it may be

678
00:58:32,800 --> 00:58:37,240
 new we do show drainage separately but ultimately it does roll up into the

679
00:58:37,240 --> 00:58:42,520
 wastewater fund so we'll show you perform on drainage here shortly okay

680
00:58:42,520 --> 00:58:46,000
 then total expenses of thirty seven point nine million in the wastewater

681
00:58:46,000 --> 00:58:51,320
 utility you can see that number right down here so very similar to water this

682
00:58:51,320 --> 00:58:55,120
 is a ten-year forecast I'll do my best to walk you through it as detailed as

683
00:58:55,120 --> 00:58:59,360
 possible as slowly then we can take any questions that you have so fiscal year

684
00:58:59,360 --> 00:59:02,680
 twenty twenty one you can see here we had thirty seven point two million or

685
00:59:02,680 --> 00:59:06,760
 thirty seven point one in revenue we had thirty six point nine million in

686
00:59:06,760 --> 00:59:10,760
 expenses so we didn't have a budget basically a balanced budget in fiscal

687
00:59:10,760 --> 00:59:13,880
 year twenty twenty one finished near about two hundred ninety two thousand

688
00:59:13,880 --> 00:59:18,480
 dollars positive we are forecasting to come in a little bit better this fiscal

689
00:59:18,480 --> 00:59:21,840
 year based on our volume forecast our flows within the wastewater fund

690
00:59:21,840 --> 00:59:26,200
 revenues about thirty seven point one million but those expenses coming in at

691
00:59:26,200 --> 00:59:31,080
 thirty six point four so total revenue about seven hundred thousand with an

692
00:59:31,080 --> 00:59:36,860
 ending fund balance you can see right in here fifteen point oh six the targets

693
00:59:36,860 --> 00:59:40,640
 that we discussed in April the minimum being nine point nine and the maximum

694
00:59:40,640 --> 00:59:45,480
 being thirteen point nine so actually above the higher end target for this

695
00:59:45,480 --> 00:59:49,760
 upcoming or ending this fiscal year so great news for the wastewater department

696
00:59:49,760 --> 00:59:53,560
 the preliminary twenty twenty two budget and you can see here in this column we

697
00:59:53,560 --> 00:59:57,920
 have thirty eight point six million in revenues moving down to the expenses you

698
00:59:57,920 --> 01:00:02,200
 saw on the previous slide the thirty seven point nine million finish in the

699
01:00:02,200 --> 01:00:07,080
 year about six hundred fifty thousand dollars positive so about fifteen point seven million ending

700
01:00:07,080 --> 01:00:11,720
 fund balance which is well within that reserve target that you see down here no

701
01:00:11,720 --> 01:00:15,760
 forecasted rate increases very similar to water we're not forecasting rate

702
01:00:15,760 --> 01:00:19,880
 increases this upcoming fiscal year I do want to point out in the future years you

703
01:00:19,880 --> 01:00:23,380
 can see we do have some one percent rate increases plugged in starting in fiscal

704
01:00:23,380 --> 01:00:27,520
 year twenty twenty nine in twenty thirty and the reason for that is to keep that

705
01:00:27,520 --> 01:00:33,520
 reserve target above that minimum that minimum target in the future years as

706
01:00:33,520 --> 01:00:36,760
 some of those planned expansion projects come on board that Stephen was talking

707
01:00:36,760 --> 01:00:41,240
 about moving down the page a little bit more you can see we do have an

708
01:00:41,240 --> 01:00:45,840
 impact fee reserve about nine point five million currently in that reserve for the

709
01:00:45,840 --> 01:00:50,400
 wastewater utility and then we have a drainage reserve we do dedicate one

710
01:00:50,400 --> 01:00:55,440
 million dollars to the drainage reserve you'll see that on the next pro forma

711
01:00:57,560 --> 01:01:01,420
 so this is drainage broken out of the pro forma that you just saw so in

712
01:01:01,420 --> 01:01:04,520
 fiscal year twenty twenty one the adopted budget that we're currently in

713
01:01:04,520 --> 01:01:08,640
 total revenues of five point nine million with total expenses of five point

714
01:01:08,640 --> 01:01:12,520
 nine the biggest majority of their budget has been on what we call channel

715
01:01:12,520 --> 01:01:17,120
 rehab so maintaining those drainage ways around the city makes up the biggest

716
01:01:17,120 --> 01:01:20,920
 portion of this budget so you can see they do plan their expenses to come in

717
01:01:20,920 --> 01:01:25,400
 about five point three but the revenues being equal to the expenses of five point

718
01:01:25,400 --> 01:01:29,080
 three what are you moving into the polymer do you think that number right

719
01:01:29,080 --> 01:01:35,000
 there went down what what is it the inability to get construction projects

720
01:01:35,000 --> 01:01:39,920
 going you think or yeah housing I don't think Daniel's here today or Danny

721
01:01:39,920 --> 01:01:43,720
 Kramer but the majority of it is I think what with covid with some of the

722
01:01:43,720 --> 01:01:47,040
 weather we've been having and getting some of those projects executed the

723
01:01:47,040 --> 01:01:52,000
 numbers is coming in below budget it's trending below budget so you know there

724
01:01:52,000 --> 01:01:55,360
 are future conversations to come with drainage in the capital plan when we do

725
01:01:55,360 --> 01:01:58,640
 the citywide budget discussion for the the capital initiative I was talking

726
01:01:58,640 --> 01:02:02,600
 about earlier part of that will be some drainage projects included and we can

727
01:02:02,600 --> 01:02:06,760
 talk more in detail about that if you'd like to chair but I do believe in the

728
01:02:06,760 --> 01:02:09,880
 brief conversations I have with Danny that is the majority it's not a huge

729
01:02:09,880 --> 01:02:15,200
 difference it just raise an eyebrow almost ten percent so yeah so if I can

730
01:02:15,200 --> 01:02:23,280
 get this my presentation here okay so preliminary but we do have budgeted

731
01:02:23,280 --> 01:02:29,000
 revenues of 5.6 million and then budgeted expenses of 5.6 for any PB

732
01:02:29,000 --> 01:02:32,600
 members that may not know these drainage revenues are part of the

733
01:02:32,600 --> 01:02:36,240
 wastewater fee schedule they're charged for impervious surfaces of different

734
01:02:36,240 --> 01:02:40,960
 businesses in different properties around the city so just want to point

735
01:02:40,960 --> 01:02:44,000
 that out that's how the drainage fund or the drainage department gets their

736
01:02:44,000 --> 01:02:55,960
 revenues so the five-year capital plan very similar to water we do summarize

737
01:02:55,960 --> 01:02:59,880
 it by different debt issuance or revenue funding so this upcoming fiscal year we

738
01:02:59,880 --> 01:03:04,560
 got forty point one million in debt funded capital revenue funded projects

739
01:03:04,560 --> 01:03:10,880
 about five million 80 construction 82,000 an impact fee funding of 250,000

740
01:03:10,880 --> 01:03:14,720
 we don't have quite a few eligible projects is coming fiscal year in the

741
01:03:14,720 --> 01:03:19,520
 wastewater utility as water is the reason that number is 250,000 instead of

742
01:03:19,520 --> 01:03:23,280
 more so wanted to point that out for the public utility board and we did some

743
01:03:23,280 --> 01:03:27,880
 vehicle replacements about 1.4 million so preliminary capital plan for fiscal

744
01:03:27,880 --> 01:03:37,600
 year 2022 is 46.9 million major problem I have a quick question before you move on

745
01:03:37,600 --> 01:03:43,600
 yes sir what is the term aid in construction what that is that is

746
01:03:43,600 --> 01:03:47,200
 contributions from different developments in the community to fund

747
01:03:47,200 --> 01:03:50,880
 their part of a development or an infrastructure within wastewater what

748
01:03:50,880 --> 01:03:55,520
 that mechanism does in the capital budget that gives us the tool from a

749
01:03:55,520 --> 01:03:59,720
 budgeting standpoint to expense those funds for us to perform that work on

750
01:03:59,720 --> 01:04:03,600
 their behalf that's that's what that represents understood thank you very

751
01:04:03,600 --> 01:04:08,160
 much so that's like a developer saying I'll give you the money instead of me

752
01:04:08,160 --> 01:04:12,320
 doing the work and you may upsize that's correct okay and we have some those come

753
01:04:12,320 --> 01:04:15,960
 in usually each fiscal year some fiscal year is not as much as others but

754
01:04:15,960 --> 01:04:29,360
 typically it's pretty consistent major wastewater projects so these are

755
01:04:29,360 --> 01:04:32,920
 included and in the pro forma and Stephen had mentioned several of these earlier

756
01:04:32,920 --> 01:04:37,640
 the solids the solids handling project of 14 million the Hickory Creek wastewater

757
01:04:37,640 --> 01:04:42,480
 treatment plant land acquisition of 5.8 million to name a few other large ones

758
01:04:42,480 --> 01:04:46,500
 here we have the Hickory Creek interceptor 3 or phase 3 project of 4

759
01:04:46,500 --> 01:04:51,200
 million and then we have the 2019 bond election to support those projects are

760
01:04:51,200 --> 01:04:56,920
 identified in that bond election we had here a few years ago of 2.9 million so

761
01:04:56,920 --> 01:05:01,680
 total on this page is 33.9 million this is not an exhaustive list if you'd like

762
01:05:01,680 --> 01:05:04,180
 that list we'd be happy to provide it but we wanted to give you at least a

763
01:05:04,180 --> 01:05:07,240
 glimpse of the major ones

764
01:05:07,240 --> 01:05:15,480
 same thing here this table is just simply to mint the tele staff took an

765
01:05:15,480 --> 01:05:18,720
 extra step this year in the last couple years for that matter from looking at a

766
01:05:18,720 --> 01:05:22,920
 cash flow perspective of how much money we need and really not issuing that debt

767
01:05:22,920 --> 01:05:30,740
 before it is needed so really lessening that burden to the ratepayers this is

768
01:05:30,740 --> 01:05:35,240
 the supplemental package summary so in total that I mentioned earlier 701,000

769
01:05:35,240 --> 01:05:40,640
 and the first one being the system repair materials for 250,000 is just

770
01:05:40,640 --> 01:05:44,200
 simply material costs have gone up of last several months I'm sure people on

771
01:05:44,200 --> 01:05:49,320
 this board are familiar with that the streets cut of 215,000 very similar to

772
01:05:49,320 --> 01:05:53,560
 water this is the wastewater component of that and then we have the other line

773
01:05:53,560 --> 01:05:58,080
 the other big one being here the line location just reallocating resources of

774
01:05:58,080 --> 01:06:03,040
 150,000 if detailed questions on these Stevens here to address them but that's

775
01:06:03,040 --> 01:06:06,280
 the summary of the supplemental package is being requested and all these are

776
01:06:06,280 --> 01:06:11,360
 included in the pro forma with no no proposed rate increases this fiscal year

777
01:06:11,360 --> 01:06:15,720
 the calendar again next conversation will come back forward to the public

778
01:06:15,720 --> 01:06:19,160
 utility board the 1st of July or July the 12th which will include that rate

779
01:06:19,160 --> 01:06:24,040
 discussion in response to that memo that you saw earlier from internal audit and

780
01:06:24,040 --> 01:06:30,960
 I'll pull the presentation down for questions questions doesn't appear to

781
01:06:30,960 --> 01:06:35,280
 be for this one thank you okay thank you and then next we have solid waste if you

782
01:06:35,280 --> 01:06:39,000
 if you would buy I'd like to take a quick break come back you can just five

783
01:06:39,000 --> 01:06:49,640
 minutes okay with everybody okay we're gonna reconvene it's 1016 I believe

784
01:06:49,640 --> 01:06:57,480
 Brian you're up with solid waste city of Denton and this could be one of the most

785
01:06:57,480 --> 01:07:02,120
 exciting budget budget presentations you will see all day so we'll go ahead and

786
01:07:02,120 --> 01:07:05,320
 get started here

787
01:07:05,320 --> 01:07:14,520
 let's start off by sharing a little bit about the department this is our

788
01:07:14,520 --> 01:07:18,480
 leadership team I've got Eugene McKinney who is my deputy director Tammy

789
01:07:18,480 --> 01:07:23,000
 Klausing who's with me today she is our business services manager James tip

790
01:07:23,000 --> 01:07:28,040
 that's our administration manager I put Katherine Barnett on this she is not

791
01:07:28,040 --> 01:07:31,360
 technically a member of our salt of the solid waste group she is in the

792
01:07:31,360 --> 01:07:35,840
 environmental services team but she is really our right arm being outreach

793
01:07:35,840 --> 01:07:39,960
 sustainability we support each other so closely from a functional standpoint

794
01:07:39,960 --> 01:07:43,880
 it's important that we represent them in their contributions to the city and to

795
01:07:43,880 --> 01:07:48,600
 the organization from a functional standpoint we we rely on each other

796
01:07:48,600 --> 01:07:52,720
 organizationally administration site operations it supports collections

797
01:07:52,720 --> 01:07:56,200
 business services we're all working together to ensure that we have the

798
01:07:56,200 --> 01:08:00,360
 highest quality of service to the city of Denton's residents and business

799
01:08:00,360 --> 01:08:09,600
 community from a personnel standpoint we started in 1920 with 123 folks mid-year

800
01:08:09,600 --> 01:08:15,080
 this last year we actually added three positions a wellfield technicians to

801
01:08:15,080 --> 01:08:19,080
 help us manage our landfill gas systems one that were in the process of

802
01:08:19,080 --> 01:08:29,000
 converting from our DTE program into our high BTU landfill gas energy system in

803
01:08:29,000 --> 01:08:34,000
 what you see in the in the 2021 is actually the loss of the three public

804
01:08:34,000 --> 01:08:37,480
 service or public outreach folks in sustainability actually going to the

805
01:08:37,480 --> 01:08:42,040
 sustainability department excuse me the environmental services department so

806
01:08:42,040 --> 01:08:46,680
 again it's really a net zero across the board from a a carry forward

807
01:08:46,680 --> 01:08:50,840
 standpoint as proposed from an operational standpoint want to share a

808
01:08:50,840 --> 01:08:54,880
 few metrics about things that are happening within the department first and

809
01:08:54,880 --> 01:08:57,960
 foremost any time I get up here and I talk about what we do you'll hear me

810
01:08:57,960 --> 01:09:01,560
 talking about safety safety is key in the solid waste industry we are the

811
01:09:01,560 --> 01:09:08,080
 fifth most dangerous service sector to either work in or be related to I mean

812
01:09:08,080 --> 01:09:10,920
 you're more likely to be in an accident or to be injured than you are to be a

813
01:09:10,920 --> 01:09:15,240
 police and firefighter across America to be a solid waste worker so again it's

814
01:09:15,240 --> 01:09:21,360
 important for us to put in programs and policies that help reduce our incidents

815
01:09:21,360 --> 01:09:25,920
 of accidents and injuries and you'll see that in this year the first six months

816
01:09:25,920 --> 01:09:31,800
 of this year we've had a 35% reduction in at fault accidents as well as 60 60

817
01:09:31,800 --> 01:09:37,000
 percent reduction in injuries what's interesting is that that reduction in

818
01:09:37,000 --> 01:09:42,600
 industry in injuries is directly tied to are changing from the plastic bags that

819
01:09:42,600 --> 01:09:46,800
 we were collecting yard waste into and having to tear open to a going to the

820
01:09:46,800 --> 01:09:53,000
 cart and the and the paper bag service we had a 0% worker comp claim and lost

821
01:09:53,000 --> 01:09:58,160
 time as a result of making that change so again we're it's a program success

822
01:09:58,160 --> 01:10:02,960
 that we look forward to expanding and carrying forward in the future when we

823
01:10:02,960 --> 01:10:06,880
 look at growth growth is a four-letter word right now City of Denton sitting on

824
01:10:06,880 --> 01:10:11,960
 top the the Metroplex right now growth is coming we've got to get ahead of it

825
01:10:11,960 --> 01:10:16,440
 and right now in this past six months we've seen a 1% growth and that's with

826
01:10:16,440 --> 01:10:20,440
 COVID and that's with the shutdowns and everything else we're anticipating

827
01:10:20,440 --> 01:10:23,880
 really about a two-and-a-half in reality anywhere between of about three and five

828
01:10:23,880 --> 01:10:28,960
 percent home count growth in this year alone just people moving in and that's

829
01:10:28,960 --> 01:10:33,800
 not counting the commercial sector that comes into support of these folks too so

830
01:10:33,800 --> 01:10:36,880
 again growth is coming and we've got to get ready for it

831
01:10:36,880 --> 01:10:40,960
 temporary students exactly you know this this doesn't really take into account

832
01:10:40,960 --> 01:10:45,600
 all the renters moving in and out also because those are really net-zero because

833
01:10:45,600 --> 01:10:50,360
 those homes turn but again all the new apartments that we have coming in that

834
01:10:50,360 --> 01:10:55,400
 that is an impact from that we have to have to prepare for we talked about

835
01:10:55,400 --> 01:11:00,260
 commercial service that's not only the business the multifamily sector is in

836
01:11:00,260 --> 01:11:07,380
 that commercial service opportunity we started this graph actually with the

837
01:11:07,380 --> 01:11:11,520
 start of COVID because as businesses were closing they were reducing the

838
01:11:11,520 --> 01:11:15,740
 amount of service they had we and we we kept this chart going to really show

839
01:11:15,740 --> 01:11:23,080
 what of our increases are and since the beginning of this year we've had 419

840
01:11:23,080 --> 01:11:29,640
 yards per week added to our system now what does that mean basically that's

841
01:11:29,640 --> 01:11:35,280
 418 yards of garbage that we have to collect in a can somewhere that is a

842
01:11:35,280 --> 01:11:41,080
 route that is a person in a new piece of equipment so out there servicing so

843
01:11:41,080 --> 01:11:44,960
 again it is again is that is that four-letter word of growth that we have

844
01:11:44,960 --> 01:11:48,880
 to keep looking for but we also have to prepare for too Denton is alive it is

845
01:11:48,880 --> 01:11:52,920
 vibrant it is growing another sector that we look at is roll-off this is

846
01:11:52,920 --> 01:12:00,320
 directly related to the construction industry you'll notice back in October

847
01:12:00,320 --> 01:12:04,920
 and again these percentages are year over year so it's last year presented to

848
01:12:04,920 --> 01:12:08,240
 what we're seeing in this year and again in October November December cooler

849
01:12:08,240 --> 01:12:12,360
 months but again we saw a significant some significant increases even though

850
01:12:12,360 --> 01:12:17,000
 we were still in COVID still we saw you know 5 10 15 percent growth and once the

851
01:12:17,000 --> 01:12:22,320
 the city opened up in February March and April you'll see a 40 percent jump a 30

852
01:12:22,320 --> 01:12:26,640
 percent jump year over year right now we're trending at about 16

853
01:12:26,640 --> 01:12:31,600
 percent growth in our roll-off business we actually excuse me we're realizing a

854
01:12:31,600 --> 01:12:36,240
 16 percent growth but we're trending at about 35 percent again it is a tremendous

855
01:12:36,240 --> 01:12:40,760
 growth sector that we're constantly having to chase and as the business as

856
01:12:40,760 --> 01:12:46,060
 the building boom keeps keeps ramping up construction keeps going on this service

857
01:12:46,060 --> 01:12:51,600
 sector will only increase over the next few years one of our things that we like

858
01:12:51,600 --> 01:12:55,360
 to talk about is waste diversion a lot of people caught talk about recycling

859
01:12:55,360 --> 01:12:59,000
 rate but we want to talk about it in a much bigger sense when we talk about

860
01:12:59,000 --> 01:13:03,120
 diversion it's everything that we collect that we don't send to a landfill

861
01:13:03,120 --> 01:13:06,200
 so everything that's you know whether it's our yard waste whether it's our

862
01:13:06,200 --> 01:13:09,880
 recycling whether it's appliances that are brought to the landfill that we end

863
01:13:09,880 --> 01:13:14,480
 up sending out to metal recyclers 18 percent of everything that's brought to

864
01:13:14,480 --> 01:13:19,240
 us either from residential commercial we collect at the HCC we actually turn

865
01:13:19,240 --> 01:13:24,360
 around and beneficially reuse it in some way shape or form so whether it's in the

866
01:13:24,360 --> 01:13:28,960
 dyno dirt whether it's y'all sending it off to our third-party processors again

867
01:13:28,960 --> 01:13:32,680
 sending it for metal recycling a tremendous amount and this is consistent

868
01:13:32,680 --> 01:13:36,520
 with what we're seeing in the North Texas area so again and we're looking to

869
01:13:36,520 --> 01:13:42,400
 really improve that over the next years the next few years this next slide is a

870
01:13:42,400 --> 01:13:48,560
 point and I apologize for it I'm sad about it but again one of the issues

871
01:13:48,560 --> 01:13:54,100
 that that we see right now is in our residential and commercial recycling we

872
01:13:54,100 --> 01:14:00,640
 have a 64 percent contamination rate it is a point a lot of that has to do with

873
01:14:00,640 --> 01:14:04,800
 COVID and people being home a lot of that has to do with the change in

874
01:14:04,800 --> 01:14:10,440
 recycling market three years ago Asian countries basically said no more so

875
01:14:10,440 --> 01:14:14,760
 the amount of material that we're able to recycle just actually get into the

876
01:14:14,760 --> 01:14:18,720
 market and have processed has dropped the quality requirements of these

877
01:14:18,720 --> 01:14:23,600
 third-party processors has gone through the roof city of Denton has aspirational

878
01:14:23,600 --> 01:14:27,080
 recyclers we want to recycle as much stuff as we can but unfortunately it's

879
01:14:27,080 --> 01:14:31,480
 not in our program so again that is considered contamination one of the

880
01:14:31,480 --> 01:14:36,600
 biggest things right now with the very very poor resale prices that we have is

881
01:14:36,600 --> 01:14:43,580
 wet material either wet material wet stuff is put into the cans itself or you

882
01:14:43,580 --> 01:14:47,560
 know the last eight months have been extremely wet here in the city of Denton

883
01:14:47,560 --> 01:14:53,160
 it get rain it gets rained on water is very very heavy eight pounds to the

884
01:14:53,160 --> 01:14:58,120
 gallon so you know when you're trying to rate separate what is water what is

885
01:14:58,120 --> 01:15:02,560
 actually recycled material you know discretion be to be in the better part

886
01:15:02,560 --> 01:15:06,440
 of valor you put that you throw that wet material away so again it

887
01:15:06,440 --> 01:15:11,240
 significantly compresses the ability that we have to get high quality material

888
01:15:11,240 --> 01:15:16,520
 back up to the third-party processors the shining star in this though is back

889
01:15:16,520 --> 01:15:20,160
 in November we actually implemented what we call the Rubicon system it's our

890
01:15:20,160 --> 01:15:24,000
 smart routing system what that's been allowed us to do is not only you know

891
01:15:24,000 --> 01:15:27,780
 right size our routes but it also gives the driver the ability to help us

892
01:15:27,780 --> 01:15:31,920
 identify where this contamination is occurring they see a contaminated card

893
01:15:31,920 --> 01:15:36,680
 at a residential they punch a button we capture that address specifically we

894
01:15:36,680 --> 01:15:41,120
 know from our routes you know commercial routes if they see something

895
01:15:41,120 --> 01:15:44,480
 heavily contaminated they can push a button because a lot of times when you

896
01:15:44,480 --> 01:15:47,400
 dump those cans until it's in the hopper you don't see what's down in the bottom

897
01:15:47,400 --> 01:15:53,200
 so they can tap it there and that gives us sustainability our account

898
01:15:53,200 --> 01:15:57,240
 coordinators the opportunity to go out and one-on-one and individually make a

899
01:15:57,240 --> 01:16:01,520
 difference in reducing this if I was giving this presentation back in October

900
01:16:01,520 --> 01:16:06,000
 of last year that number would have been in the low 70s so in six months we've

901
01:16:06,000 --> 01:16:10,480
 made a significant contribution and ability to drive that number down and we

902
01:16:10,480 --> 01:16:14,080
 hope that by the end of this year this number will be significantly lower yes

903
01:16:14,080 --> 01:16:18,160
 ma'am I was going to say one of the things that I think you've done very

904
01:16:18,160 --> 01:16:22,480
 successful in educating people is putting what you can put in the bins on

905
01:16:22,480 --> 01:16:28,800
 top of the bins yes but you probably cannot advertise or communicate enough

906
01:16:28,800 --> 01:16:35,320
 about what you can recycle I I think people are getting it more than they used

907
01:16:35,320 --> 01:16:41,000
 to but it's just something you have to be quite persistent with it is and you

908
01:16:41,000 --> 01:16:44,400
 know with the high number of rental units so we have single-family rent

909
01:16:44,400 --> 01:16:48,440
 rental use that we have here students moving in students students moving out

910
01:16:48,440 --> 01:16:52,520
 we're constantly chasing our tail having to educate and re-educate and re-educate

911
01:16:52,520 --> 01:16:56,960
 and you know we're currently toying with sort of a welcome wagon program for lack

912
01:16:56,960 --> 01:17:01,280
 of a better term somebody goes in that to turn on a utility they get so much

913
01:17:01,280 --> 01:17:04,920
 information from the city of Denton and solid waste that really what it does it

914
01:17:04,920 --> 01:17:08,560
 opens up the opportunity to say okay you know this is what the program is not

915
01:17:08,560 --> 01:17:12,560
 just there's recycling program or worse yet this is how we did it back where I

916
01:17:12,560 --> 01:17:16,880
 used to live because we you know we've got a significant different set of

917
01:17:16,880 --> 01:17:21,720
 things that we can take and that other cities don't have so you know it's it's

918
01:17:21,720 --> 01:17:25,520
 it's okay it's not only education but it's also re-education well one of the

919
01:17:25,520 --> 01:17:29,520
 things that most common that we see is you can put the pizza box in there but

920
01:17:29,520 --> 01:17:34,200
 you can't put the piece that the pizzas on in there because it has food on it

921
01:17:34,200 --> 01:17:38,680
 well and again if there's if that piece that that that pizza box is stained with

922
01:17:38,680 --> 01:17:42,280
 grease in any way that can't go in there you can possibly tear off the top and

923
01:17:42,280 --> 01:17:46,800
 put it in there but that grease is contamination it has to go away yes ma'am

924
01:17:46,800 --> 01:17:51,040
 oh I just wanted to say you need to advertise the waste wizard yes I mean

925
01:17:51,040 --> 01:17:54,840
 that would be something to really push because I found that very useful and for

926
01:17:54,840 --> 01:17:58,120
 those who may be watching on TV the waste wizard basically it's a it's an

927
01:17:58,120 --> 01:18:02,480
 it's a it's a database so if you are if you have a question about whether it can

928
01:18:02,480 --> 01:18:07,960
 or can't be recycled go into city of Denton recycling page type in what you

929
01:18:07,960 --> 01:18:12,600
 have and if we'll take it it says yeah managing it this way if we can't take it

930
01:18:12,600 --> 01:18:16,160
 it says we'll try this opportunity or this opportunity so again it gives you

931
01:18:16,160 --> 01:18:21,160
 it just doesn't say yes or no but it does give you significant direction on

932
01:18:21,160 --> 01:18:28,520
 how to divert that material places to donate or ways to reuse it correct okay

933
01:18:28,520 --> 01:18:39,440
 all right so we will continue here so again moving into the budget

934
01:18:39,440 --> 01:18:49,640
 you know last year even with kovat I'm gonna have to brag on it's probably some

935
01:18:49,640 --> 01:18:53,720
 of the hardest-working people here at the city of Denton you know there are

936
01:18:53,720 --> 01:18:59,600
 certain folks who did a yeoman's work from their house you know they moved

937
01:18:59,600 --> 01:19:03,360
 basically their office to their their living room their kitchen to the home

938
01:19:03,360 --> 01:19:08,720
 office and and kept this city running but city of Denton solid waste folks day

939
01:19:08,720 --> 01:19:13,540
 in day out day after day they were showing up for work they were picking up

940
01:19:13,540 --> 01:19:18,160
 garbage at the curb they were picking up recycling at the curb they were picking

941
01:19:18,160 --> 01:19:23,080
 up and they did it and not only that the people but when we had folks get sick we

942
01:19:23,080 --> 01:19:27,640
 had crew leaders and supervisors and managers jumping into trucks making sure

943
01:19:27,640 --> 01:19:34,640
 that that garbage was collected and we had a safe and clean and sustainable

944
01:19:34,640 --> 01:19:40,120
 city so again just a huge shout out to these folks they they they don't get

945
01:19:40,120 --> 01:19:45,440
 enough credit you know we do 350,000 service stops a month for our

946
01:19:45,440 --> 01:19:50,400
 residential standpoint and again they do it and we appreciate the fact that that

947
01:19:50,400 --> 01:19:54,840
 they're out there doing it so again we continued with this with the slowdown

948
01:19:54,840 --> 01:20:00,600
 and then the shutdown I talked a little bit about a Rubicon smart routing system

949
01:20:00,600 --> 01:20:06,280
 we're six months in and every day is a new day just exciting about what it can

950
01:20:06,280 --> 01:20:10,560
 do for us what it what we wanted to do for us so we continue making those those

951
01:20:10,560 --> 01:20:14,840
 improvements as we're going along we've talked a lot about our scale house

952
01:20:14,840 --> 01:20:19,960
 system it's at the end of life so we finalized the acquisition of what we

953
01:20:19,960 --> 01:20:24,320
 call what's called the strong data scale house software system so within this

954
01:20:24,320 --> 01:20:28,080
 next year the implementation of that will occur and we continue working on

955
01:20:28,080 --> 01:20:33,600
 the landfill expansion through our permit 1590 B at the state we're getting

956
01:20:33,600 --> 01:20:39,600
 very close to having that awarded as we look forward to 21 22 again landfill

957
01:20:39,600 --> 01:20:43,360
 expansions first and foremost we want to tie that up make sure that that we've

958
01:20:43,360 --> 01:20:48,560
 got the capacity that you know looking forward secondly David brought this up

959
01:20:48,560 --> 01:20:52,040
 but again our comprehensive solid waste management strategy we're looking

960
01:20:52,040 --> 01:20:55,920
 forward to that completion so we can plan in the implementation of what we're

961
01:20:55,920 --> 01:21:01,800
 looking at you know Mark I don't know if it was Mark Twain but said you know if

962
01:21:01,800 --> 01:21:05,040
 you always do what you always done you always get what you always got well you

963
01:21:05,040 --> 01:21:07,520
 know even if you're trying to do it better you're always going to get what

964
01:21:07,520 --> 01:21:10,200
 you always got and I think what this opportunity is going to allow us to do

965
01:21:10,200 --> 01:21:14,120
 is look at it differently so we can affect it differently so we can make the

966
01:21:14,120 --> 01:21:18,320
 changes that need to be made to ensure not only that we're fiscally responsible

967
01:21:18,320 --> 01:21:24,480
 but protecting diverting being as safe as we possibly can again reducing

968
01:21:24,480 --> 01:21:28,920
 contamination fleet performance uptime and downtime we talk about our drivers

969
01:21:28,920 --> 01:21:33,320
 our fleet is really the key to making sure that we can deliver those services

970
01:21:33,320 --> 01:21:37,000
 so you know working with our fleet services so we can keep the trucks on

971
01:21:37,000 --> 01:21:41,160
 the road you know and not having them sitting in shops that's probably the

972
01:21:41,160 --> 01:21:47,640
 one thing that really hurts us and is downtime and with the chip shortage that

973
01:21:47,640 --> 01:21:53,320
 everybody's talking about you know new vehicles really are not not available so

974
01:21:53,320 --> 01:21:57,280
 we've got to maximize use of our existing fleet one of our old landfills

975
01:21:57,280 --> 01:22:00,480
 out on Mosley Road there's some long-term maintenance issues that we're

976
01:22:00,480 --> 01:22:05,840
 going to have to work with so well we'll be impacting those in 2122 and again

977
01:22:05,840 --> 01:22:11,040
 continuous improvements to cost safety and service delivery turn it over here

978
01:22:11,040 --> 01:22:18,600
 to Nick to talk about our budget itself thank you Brian so I'll say the same

979
01:22:18,600 --> 01:22:21,520
 thing Brian and Tammy and all the staff has always been great putting this

980
01:22:21,520 --> 01:22:26,240
 budget together so just want to give them definitely credit so really quick

981
01:22:26,240 --> 01:22:29,920
 revenue projections that we do have the 2% forecasting out years so very

982
01:22:29,920 --> 01:22:33,880
 consistent across the utilities we are forecasting the hunter coal ranch

983
01:22:33,880 --> 01:22:38,360
 development in 2023 and then the cell construction actually took place this

984
01:22:38,360 --> 01:22:42,800
 fiscal year but we wanted to put it on here just to reiterate with the the PV

985
01:22:42,800 --> 01:22:45,960
 members that were continuing to focus on revenue funding as many projects as

986
01:22:45,960 --> 01:22:51,200
 possible so definitely wanted to point that out to you these are the revenues

987
01:22:51,200 --> 01:22:55,680
 by different operational areas so you can see the adopted 2021 budget which

988
01:22:55,680 --> 01:22:59,240
 we're currently in right here you can see residential revenue residential

989
01:22:59,240 --> 01:23:03,680
 recycling front load side low which is typically commercial could also be a

990
01:23:03,680 --> 01:23:07,840
 little bit residential mixed in there we have some roll-off open top revenue and

991
01:23:07,840 --> 01:23:11,520
 then moving down the page another big category is a landfill gate revenue so

992
01:23:11,520 --> 01:23:16,200
 total revenues for the adopted budget is a 39.8 million you see here we are

993
01:23:16,200 --> 01:23:20,560
 forecasting to come in a little bit below that I'm at 38.5 million and then

994
01:23:20,560 --> 01:23:25,320
 the preliminary budget for fiscal year 2022 is 39.8 so really getting us back to

995
01:23:25,320 --> 01:23:32,880
 where we were in 2021 solid waste expense by category so these are those

996
01:23:32,880 --> 01:23:36,360
 different expense items within the operating budget grouped into different

997
01:23:36,360 --> 01:23:40,520
 categories so you can see materials and supplies maintenance and repair

998
01:23:40,520 --> 01:23:45,600
 operations transfer franchise fee administrative cost revenue funded

999
01:23:45,600 --> 01:23:50,360
 capital and vehicle replacement so in 2021 you can see adopted expenses of the

1000
01:23:50,360 --> 01:23:56,520
 44.1 estimated a 43.4 so a little bit below budget and then the

1001
01:23:56,520 --> 01:24:00,760
 preliminary budget of 37 million and I will point out that the majority of this

1002
01:24:00,760 --> 01:24:04,520
 decrease is for the cell development cost so on that first bullet point or

1003
01:24:04,520 --> 01:24:08,520
 that first slide that we had we had the revenue funding capital you can see here

1004
01:24:08,520 --> 01:24:13,160
 was 6.4 million we have expense that money from the operating budget this

1005
01:24:13,160 --> 01:24:17,640
 fiscal year to revenue fund that cell development so it will go away next year

1006
01:24:17,640 --> 01:24:22,640
 so the majority that decrease is associated with that this is the expenses

1007
01:24:22,640 --> 01:24:26,720
 by operational area or division so the solid waste administration division

1008
01:24:26,720 --> 01:24:32,400
 residential commercial solid waste disposal which is also the landfill your

1009
01:24:32,400 --> 01:24:36,240
 home chemical collection division side operations miscellaneous and any

1010
01:24:36,240 --> 01:24:41,160
 supplemental request so in 2021 the adopted budget had a 44.1 million in

1011
01:24:41,160 --> 01:24:47,840
 expenses and the 43.4 we talked about and 37 million we do have 282,000

1012
01:24:47,840 --> 01:24:51,400
 supplemental packages for this utility and we'll talk about those shortly and

1013
01:24:51,400 --> 01:24:57,600
 Brian can talk to them in greater detail so for solid waste we show a five-year

1014
01:24:57,600 --> 01:25:01,040
 outlook I'm going to walk you through this very similar to water and waste

1015
01:25:01,040 --> 01:25:06,480
 water and give you as much detail as possible so in 2021 we had adopted

1016
01:25:06,480 --> 01:25:12,860
 revenues of 39.8 million we had the adopted expenses we discussed 44.1 so

1017
01:25:12,860 --> 01:25:18,280
 the adopted budget had 4.3 million in reserve usage we are forecasting and in

1018
01:25:18,280 --> 01:25:21,720
 this fiscal year ending September 30th to use a little bit more in reserves

1019
01:25:21,720 --> 01:25:26,280
 about 4.8 million you can see that number right here with the expenses of

1020
01:25:26,280 --> 01:25:29,960
 43.4 that we talked about on the previous slide one thing I did want to

1021
01:25:29,960 --> 01:25:33,400
 point out is it's fiscal year 2021 budget did include a five percent rate

1022
01:25:33,400 --> 01:25:36,760
 decrease for residential customers that equated to about a dollar and eight

1023
01:25:36,760 --> 01:25:40,280
 cents a month for the average residential customer with a standard

1024
01:25:40,280 --> 01:25:45,360
 card so I just want to make sure I point that out the preliminary 2022 budget is

1025
01:25:45,360 --> 01:25:51,060
 here in this dotted line you can see we had preliminary revenues of 39.8 with

1026
01:25:51,060 --> 01:25:55,160
 expenses of 37 so we're actually forecasting the finish the year 2.8

1027
01:25:55,160 --> 01:26:00,080
 million moving down the page what I wanted to point out is the ending fund

1028
01:26:00,080 --> 01:26:05,600
 balance is 9 million with the reserve targets down here in this pink color of

1029
01:26:05,600 --> 01:26:12,120
 5.2 to 6.7 so definitely well above the top end of that reserve and then going

1030
01:26:12,120 --> 01:26:16,880
 out in the future years we do come down a little bit in 2024 to about 6.7

1031
01:26:16,880 --> 01:26:20,480
 million so I wanted to point that out for everybody we're not forecasting rate

1032
01:26:20,480 --> 01:26:25,120
 changes in this pro forma and the reserve requirement is above that

1033
01:26:25,120 --> 01:26:30,380
 reserve minimum in each of the years so good news one thing I definitely need to

1034
01:26:30,380 --> 01:26:34,000
 bring to your attention that we separated out this year so up in your

1035
01:26:34,000 --> 01:26:38,480
 revenues we have our wholesale waste agreements those will be in place through

1036
01:26:38,480 --> 01:26:45,160
 fiscal year 2022 but starting in fiscal year 2023 they're currently forecasted

1037
01:26:45,160 --> 01:26:49,760
 they're not included in the pro forma so based on direction we get from PB city

1038
01:26:49,760 --> 01:26:53,400
 council if you make the decision to renew those contracts we would build them

1039
01:26:53,400 --> 01:26:57,600
 into this pro forma but this pro forma currently does not include those going

1040
01:26:57,600 --> 01:27:02,600
 forward past fiscal year 2022 so that's we want to bring that to your your

1041
01:27:02,600 --> 01:27:05,840
 attention today that no decision has been made on that but we definitely want

1042
01:27:05,840 --> 01:27:11,340
 to bring it to your attention this is the five-year capital plan so this is

1043
01:27:11,340 --> 01:27:14,880
 the preliminary capital budget is upcoming fiscal year a couple different

1044
01:27:14,880 --> 01:27:18,200
 tables on the solid waste fund we wanted to break it out by different funding

1045
01:27:18,200 --> 01:27:23,240
 year in different types so up here in the top table which you can see is we

1046
01:27:23,240 --> 01:27:27,400
 have 6.7 million in capital funded projects is coming fiscal year that does

1047
01:27:27,400 --> 01:27:32,120
 include vehicle replacements we do sell different types of bonds for those

1048
01:27:32,120 --> 01:27:36,840
 capital projects 20-year bonds of two millions five-year bonds of 480,000 a

1049
01:27:36,840 --> 01:27:40,680
 little bit of revenue funding and you can see here for 40,000 coming from the

1050
01:27:40,680 --> 01:27:45,400
 operating fund and then those vehicle replacements of 4.2 and down here at the

1051
01:27:45,400 --> 01:27:48,400
 bottom we just grouped them into different categories you can see street

1052
01:27:48,400 --> 01:27:53,600
 structural vehicles and building construction for that total of 6.7

1053
01:27:53,600 --> 01:27:57,000
 million also so just giving you a couple different looks at it and how it groups

1054
01:27:57,000 --> 01:28:01,520
 together and how we're paying for it for this coming fiscal year so

1055
01:28:01,520 --> 01:28:09,560
 everybody's touched on it but just the vehicle replacement fund you buy off the

1056
01:28:09,560 --> 01:28:13,960
 buy board right yeah let me pull this down really good yeah Brian probably

1057
01:28:13,960 --> 01:28:17,440
 talked to that better about the buy board and your truck purchases out do

1058
01:28:17,440 --> 01:28:22,000
 you buy them off the buy board or it depends on what type of vehicle that

1059
01:28:22,000 --> 01:28:26,160
 we're looking for where we can take the opportunities to to purchase off some

1060
01:28:26,160 --> 01:28:30,360
 sort of cooperative we do because we get exceptionally good prices and it speeds

1061
01:28:30,360 --> 01:28:34,720
 up the price but there are other trucks that marrying the chassis with the body

1062
01:28:34,720 --> 01:28:39,360
 those are special fleet orders that are specific to the city of Denton so we have

1063
01:28:39,360 --> 01:28:42,920
 to get into a build cycle so it's a it's a it's a homogenation of the two

1064
01:28:42,920 --> 01:28:47,660
 so I guess my real question is how's that gonna go well it's hard to get them

1065
01:28:47,660 --> 01:28:51,080
 nowadays it is hard to get them so you know part of it is you know we have to

1066
01:28:51,080 --> 01:28:54,920
 look at our fleet try to keep it up we can you know secondly we try to look at

1067
01:28:54,920 --> 01:28:58,440
 what's on the ground you know because there are some people who due to COVID

1068
01:28:58,440 --> 01:29:01,040
 they can't afford some of the trucks that may have been in a build cycle so

1069
01:29:01,040 --> 01:29:04,880
 sitting on the ground if it if it's close then you know we might be able to

1070
01:29:04,880 --> 01:29:09,360
 purchase that others were being extremely aggressive and trying to get

1071
01:29:09,360 --> 01:29:14,800
 letters of intent out there saying that you know go ahead get us in your build

1072
01:29:14,800 --> 01:29:19,200
 cycle you know October 1 comes we have the funding but you know don't because

1073
01:29:19,200 --> 01:29:22,760
 if we wait till October 1 it's gonna be 18 months built cycle now we might be

1074
01:29:22,760 --> 01:29:25,640
 able to get into six to eight months yes in this case since you're getting that

1075
01:29:25,640 --> 01:29:28,360
 budget ahead so far ahead of time you ought to be in pretty good shape we

1076
01:29:28,360 --> 01:29:32,960
 should be in decent shape and fortunately also this past year from a

1077
01:29:32,960 --> 01:29:36,960
 landfill standpoint we've been able to get all of our you know big equipment

1078
01:29:36,960 --> 01:29:40,920
 yellow iron that we've needed and delivered so we're not having we're not

1079
01:29:40,920 --> 01:29:45,480
 as subject to that the speculation in that market as we are to the the front

1080
01:29:45,480 --> 01:29:49,760
 line fleet thank you

1081
01:29:49,760 --> 01:30:02,280
 Mr. Ryback may be talking I think he's on sorry go ahead we can hear you

1082
01:30:02,920 --> 01:30:08,680
 previous slides on the budget there was franchise fees and administrative and

1083
01:30:08,680 --> 01:30:14,360
 I'm curious what the franchise fees refers to so mr. Ryback that's a great

1084
01:30:14,360 --> 01:30:19,720
 question those are fees paid to the general fund that ultimately get

1085
01:30:19,720 --> 01:30:22,840
 transferred over to the street fund for street improvements that was guidance we

1086
01:30:22,840 --> 01:30:28,160
 received from City Council several years ago so those are five percent five

1087
01:30:28,160 --> 01:30:34,000
 percent of revenues they go to the general fund all right so that's

1088
01:30:34,000 --> 01:30:37,760
 something that's being set aside per council mandate is that correct that's

1089
01:30:37,760 --> 01:30:41,400
 correct yeah several years ago the council gave staff direction to

1090
01:30:41,400 --> 01:30:45,320
 establish a franchise fee the franchise fees would ultimately make their way to

1091
01:30:45,320 --> 01:30:49,000
 the street fund to do street improvements in the city so each utility

1092
01:30:49,000 --> 01:30:56,560
 pays in a franchise fee of five percent so okay thank you their taxes yeah well

1093
01:30:56,560 --> 01:31:02,400
 and you know in cities that that have you know private third-party companies

1094
01:31:02,400 --> 01:31:06,840
 that are out perching doing it it's basically it would be a fee that they

1095
01:31:06,840 --> 01:31:10,000
 would pay also for the use of the city infrastructure to perform their

1096
01:31:10,000 --> 01:31:14,400
 business so basically what it does is it puts us on the same level from a from a

1097
01:31:14,400 --> 01:31:19,380
 value standpoint of determining you know and appraising how well we're doing with

1098
01:31:19,380 --> 01:31:23,080
 the private sector so again it's a it's a it's a fee that that needs to be paid

1099
01:31:23,080 --> 01:31:27,320
 should be paid by or by the department into the street fund for the use of that

1100
01:31:27,320 --> 01:31:36,720
 infrastructure thank you all right I think I only got a couple more slides to

1101
01:31:36,720 --> 01:31:41,920
 go through here let me pull it up really quick we'll take any other questions that

1102
01:31:41,920 --> 01:31:50,800
 you may have okay so supplemental packages for full-time positions so you

1103
01:31:50,800 --> 01:31:55,000
 can see here a field service worker to is being requested HEO to a heavy

1104
01:31:55,000 --> 01:32:00,080
 equipment operator to a roll-off truck driver of one and then a field service

1105
01:32:00,080 --> 01:32:05,280
 supervisor of one we do have a part-time intern there at the bottom so total

1106
01:32:05,280 --> 01:32:09,040
 supplemental requests are 282,000 you want to point out all these are

1107
01:32:09,040 --> 01:32:12,640
 included in the pro forma so no rate increases being proposed this future

1108
01:32:12,640 --> 01:32:16,520
 year and they are funded to get questions regarding the positions of

1109
01:32:16,520 --> 01:32:23,240
 course Brian could speak to them but then that future calendar so we will

1110
01:32:23,240 --> 01:32:27,400
 talk to you again of course on July the 12th with a budget and rate discussion

1111
01:32:27,400 --> 01:32:37,120
 then I will pull this down for questions any questions I just wanted to

1112
01:32:37,120 --> 01:32:42,680
 compliment you on the number of times I get to hear no rate increases yeah

1113
01:32:42,680 --> 01:32:49,520
 congratulations very good point that's all thank you then chair we have electric

1114
01:32:49,520 --> 01:32:52,480
 so Tony point they will come up and present the operational information for

1115
01:32:52,480 --> 01:32:55,560
 electric thank you

1116
01:33:12,680 --> 01:33:22,160
 so mr. chair members of the board Tony point the DMV general manager thank you

1117
01:33:22,160 --> 01:33:25,600
 for the opportunity to come and present this budget to you first of all before I

1118
01:33:25,600 --> 01:33:30,640
 began I wanted to first of all again acknowledge our customers and the

1119
01:33:30,640 --> 01:33:34,200
 difficult time and the challenges that they experienced during winter storm

1120
01:33:34,200 --> 01:33:39,200
 yuri that certainly was not something that that we wanted and certainly we did

1121
01:33:39,200 --> 01:33:42,680
 our best to try to provide the best service that we could and the power that

1122
01:33:42,680 --> 01:33:47,080
 we could when when we had it also want to acknowledge our staff or the kind of

1123
01:33:47,080 --> 01:33:51,080
 yeoman work that they did fantastic work many cases left their own families to

1124
01:33:51,080 --> 01:33:56,720
 come and serve our customers I proud to serve with them I tell people all the

1125
01:33:56,720 --> 01:34:00,560
 time that I haven't been around folks like that since I was 18 years old in

1126
01:34:00,560 --> 01:34:05,480
 Marine Corps they're just fantastic people they continue to amaze me and

1127
01:34:05,480 --> 01:34:09,280
 surprise me every single day including this weekend you know we had a couple

1128
01:34:09,280 --> 01:34:14,240
 folks really do some fantastic work this weekend protecting our assets and that's

1129
01:34:14,240 --> 01:34:17,360
 just something that that they do just because they love what they do and they

1130
01:34:17,360 --> 01:34:22,160
 love our customers I will tell you that since winter storm yuri we fielded a

1131
01:34:22,160 --> 01:34:28,360
 number of phone calls from folks wanting to switch to DMV you know for for all the

1132
01:34:28,360 --> 01:34:32,760
 the hoopla that we've had in past years about you know why can't I choose my

1133
01:34:32,760 --> 01:34:37,760
 own provider it's amazing how many people are thankful that during winter

1134
01:34:37,760 --> 01:34:42,960
 storm yuri they were they actually had DME because they could see friends and

1135
01:34:42,960 --> 01:34:47,080
 family members across the state of Texas and they were without power for for days

1136
01:34:47,080 --> 01:34:51,200
 in some cases and so we're certainly thankful for our customers and certainly

1137
01:34:51,200 --> 01:34:55,400
 we'll work with them on that I have not filled in a single phone call since then

1138
01:34:55,400 --> 01:35:01,200
 telling me that they want to switch away from DME so again really just credit our

1139
01:35:01,200 --> 01:35:06,800
 staff and really this community for for what we do in a single every single day

1140
01:35:06,800 --> 01:35:12,720
 so again I'll be presenting the piece of this presentation at Chris Lutrick our

1141
01:35:12,720 --> 01:35:15,840
 executive manager of operations and I know you guys would prefer to listen to

1142
01:35:15,840 --> 01:35:19,880
 Chris than to me he'll be coming up here as well and covering the majority of our

1143
01:35:19,880 --> 01:35:24,560
 operating presentation and of course our director of finance Cassie Ogden will be

1144
01:35:24,560 --> 01:35:30,320
 here to present the financial pieces this is just a brief organizational chart of

1145
01:35:30,320 --> 01:35:35,000
 what we look like you know certainly Terry Nolte our assistant general

1146
01:35:35,000 --> 01:35:38,960
 manager who's actually on should be on the phone case there are some questions

1147
01:35:38,960 --> 01:35:43,960
 that that he may need to come in and answer Bill Shepard's our executive

1148
01:35:43,960 --> 01:35:47,880
 manager of business services Bill started with us the week of a winter

1149
01:35:47,880 --> 01:35:52,400
 storm yuri and got to experience that along with his family in an RV park you

1150
01:35:52,400 --> 01:35:55,240
 know because he was just temporarily housing and so we're fortunate to have

1151
01:35:55,240 --> 01:35:59,480
 Bill with this and he's been a great asset in addition to to our team Smith

1152
01:35:59,480 --> 01:36:03,320
 day is our executive manager of risk and compliance and you know he really keeps

1153
01:36:03,320 --> 01:36:06,720
 us in a straight and narrow when it comes to regulatory issues and and risk

1154
01:36:06,720 --> 01:36:12,000
 and compliance issues in their utility of course Chris Lutrick who's been you

1155
01:36:12,000 --> 01:36:16,640
 know he's done a great job for us running our operations and our field

1156
01:36:16,640 --> 01:36:21,840
 services folks you know he's not new to DME but he's certainly new to to this

1157
01:36:21,840 --> 01:36:25,760
 role so we're thankful for him and in here today we also have Jerry Fildler

1158
01:36:25,760 --> 01:36:31,440
 who's our division manager for for engineering and you know I tell Jerry

1159
01:36:31,440 --> 01:36:36,000
 that that groups really the brains of DME and certainly does a great job him

1160
01:36:36,000 --> 01:36:41,040
 and his team and so he's here to answer any questions specifically on the on the

1161
01:36:41,040 --> 01:36:44,840
 capital projects as well which his team really kind of is at the forefront of

1162
01:36:44,840 --> 01:36:51,520
 leading so just a little bit about DME obviously the those are you that been on

1163
01:36:51,520 --> 01:36:54,880
 the board for one this can be for a while now that he's been in existence for

1164
01:36:54,880 --> 01:36:59,280
 quite some time about a hundred and sixteen years 1905 I was doing a little

1165
01:36:59,280 --> 01:37:03,600
 bit of research over the weekend and so 39 years after the city of Denton was

1166
01:37:03,600 --> 01:37:08,600
 incorporated DME was formed and so we we certainly share a long history with with

1167
01:37:08,600 --> 01:37:14,200
 the city and certainly our own and a part of the city as well we are the six

1168
01:37:14,200 --> 01:37:18,400
 largest municipality I'm usually only to electric utility in the state of Texas

1169
01:37:18,400 --> 01:37:24,280
 there's 72 of those we're proud to be members of TPPA which is our kind of

1170
01:37:24,280 --> 01:37:29,240
 state organization of all these utilities obviously the council is the

1171
01:37:29,240 --> 01:37:33,040
 governing body and adopts the budget and rates but certainly the public utility

1172
01:37:33,040 --> 01:37:37,000
 board serves a very important role in advising not just the utilities but

1173
01:37:37,000 --> 01:37:40,320
 certainly the City Council and making recommendations which this is part of

1174
01:37:40,320 --> 01:37:43,400
 the process is going through the budget and making recommendations to the

1175
01:37:43,400 --> 01:37:49,000
 council as they deliberate you know going forward after after August 1st one

1176
01:37:49,000 --> 01:37:51,880
 of the things that we've been trying to preach and talk to our staff about is

1177
01:37:51,880 --> 01:37:56,600
 just you know we are part of the city so we are one city of one organization DME

1178
01:37:56,600 --> 01:37:59,780
 is not a separate organization we are a department of the city and it's

1179
01:37:59,780 --> 01:38:05,060
 something that we try to preach to our to our to our employees on a daily basis

1180
01:38:05,060 --> 01:38:10,320
 and then the last thing that I'll share with you again is we do have somewhat of

1181
01:38:10,320 --> 01:38:14,640
 a defined service territory we certainly serve the majority of the core of the

1182
01:38:14,640 --> 01:38:19,800
 city but there are dually and triply certified areas in which we do compete

1183
01:38:19,800 --> 01:38:24,640
 primarily on the initial stages of development and and I'll tell you I'm

1184
01:38:24,640 --> 01:38:31,640
 proud that the majority of developments choose to have DME serve those areas and

1185
01:38:31,640 --> 01:38:35,680
 so I think a lot of it has to do with our reliability and and the service that

1186
01:38:35,680 --> 01:38:39,480
 we provide and Chris will be talking a little bit about those metrics I just

1187
01:38:39,480 --> 01:38:44,440
 wanted to show you just a high-level map obviously the green area is kind of our

1188
01:38:44,440 --> 01:38:49,400
 core and what we are singly certified for we are the sole provider of

1189
01:38:49,400 --> 01:38:53,880
 electricity in in that area but out in the fringes you can see where we are

1190
01:38:53,880 --> 01:38:58,640
 singly and dually certified just an example we'll talk a little bit about

1191
01:38:58,640 --> 01:39:03,200
 Hunter and coal ranch was an area that was dually and triply certified in some

1192
01:39:03,200 --> 01:39:09,880
 areas and we are going to be serving the majority of that development so a couple

1193
01:39:09,880 --> 01:39:13,000
 of goals over the last two years a couple accomplishments over the last two

1194
01:39:13,000 --> 01:39:18,280
 years went to kind of give a recap to you on on really kind of where we've been

1195
01:39:18,280 --> 01:39:22,840
 and and and I think as Cassie comes up and talks about the budget you kind of

1196
01:39:22,840 --> 01:39:27,160
 see why we're making the recommendations that we're making but one of the first

1197
01:39:27,160 --> 01:39:31,720
 ones that I'll touch base is two years ago we did do an FTE or organizational

1198
01:39:31,720 --> 01:39:35,840
 analysis and certainly in conjunction with the voluntary separation program we

1199
01:39:35,840 --> 01:39:40,180
 were able to eliminate 20 FTEs that's about two million dollars an annual

1200
01:39:40,180 --> 01:39:44,080
 basis that came out of our operating budget ten million dollars over a five

1201
01:39:44,080 --> 01:39:48,560
 year period so substantial amount of savings that really has has helped us

1202
01:39:48,560 --> 01:39:52,760
 not only organizationally to work more efficiently but also I think from a

1203
01:39:52,760 --> 01:39:56,480
 financial standpoint has put us in the position that we're in today and the

1204
01:39:56,480 --> 01:39:59,920
 recommendation that that you'll see coming forward I already mentioned

1205
01:39:59,920 --> 01:40:05,040
 hunter coal ranch those are pretty large developments we'll we're gonna serve

1206
01:40:05,040 --> 01:40:11,640
 about 10,000 single-family homes at about 18,000 the other there's a core of a

1207
01:40:11,640 --> 01:40:15,300
 hunter coal ranch that will be served by coaster of electric and they are only

1208
01:40:15,300 --> 01:40:18,800
 certified for coaster of electric so that was the only piece that we could

1209
01:40:18,800 --> 01:40:24,600
 not get about 18,000 homes total over 30 years but you know like I said 10,000

1210
01:40:24,600 --> 01:40:29,800
 those will be served by by DME about 3,000 multifamily unions are projected

1211
01:40:29,800 --> 01:40:34,560
 and 350 commercial industrial properties that will develop throughout that entire

1212
01:40:34,560 --> 01:40:39,600
 development this is a net positive cash flow for for DME over that 30 year

1213
01:40:39,600 --> 01:40:46,160
 period about 183 million dollars worth of positive income that will that will

1214
01:40:46,160 --> 01:40:50,840
 come to the benefit of DME and certainly as we spread and grow that base will

1215
01:40:50,840 --> 01:40:54,680
 certainly be able to spread those costs and and and this will certainly help us

1216
01:40:54,680 --> 01:41:01,440
 keep our rates stable going forward into the future the next item we had about

1217
01:41:01,440 --> 01:41:08,260
 18 and a half million dollars worth of savings by basically postponing the Eagle

1218
01:41:08,260 --> 01:41:14,240
 Drive substation we as you may recall we are making some improvements about the

1219
01:41:14,240 --> 01:41:20,200
 local substation and then the new Hickory GIS substation to serve DME that

1220
01:41:20,200 --> 01:41:23,800
 property that is there on Eagle Drive we will retain ownership for that property

1221
01:41:23,800 --> 01:41:27,840
 we're gonna land bank it because eventually we will need a substation and

1222
01:41:27,840 --> 01:41:31,920
 I think that area would be a perfect spot for it but again it's eighteen and a

1223
01:41:31,920 --> 01:41:36,680
 half million dollars of savings to our ratepayers and then finally the last

1224
01:41:36,680 --> 01:41:39,160
 item that I'll just kind of just talk about certainly if you have any

1225
01:41:39,160 --> 01:41:42,280
 questions about the other items I'm happy to respond to those but we did

1226
01:41:42,280 --> 01:41:45,880
 reduce our bond sale for the current year by 20 million dollars that's

1227
01:41:45,880 --> 01:41:50,560
 something that you know even though you approve a CIP budget this year for for

1228
01:41:50,560 --> 01:41:54,680
 the next five years and certainly for fiscal year 21-22 before we go to issue

1229
01:41:54,680 --> 01:41:58,880
 those bonds we will go back and we'll reevaluate those projects see where they

1230
01:41:58,880 --> 01:42:03,520
 are if we can slide them if they're no longer needed if we can better match our

1231
01:42:03,520 --> 01:42:06,640
 cash flows with some other financing opportunities we'll certainly be

1232
01:42:06,640 --> 01:42:11,080
 looking at that just like we did this year and certainly what that translates

1233
01:42:11,080 --> 01:42:16,920
 to is a reduced projected annual debt service going forward that again helps

1234
01:42:16,920 --> 01:42:22,640
 us to kind of stabilize those rates and with that I'll go ahead and turn it over

1235
01:42:22,640 --> 01:42:29,880
 to mr. Lutrik and he'll take the rest of the presentation good morning board

1236
01:42:29,880 --> 01:42:36,040
 good morning are you budgeted out yet so I'll go through mine pretty quick and if

1237
01:42:36,040 --> 01:42:39,720
 you have any questions on any of the information that I don't directly speak

1238
01:42:39,720 --> 01:42:44,920
 to just let me know one thing we'd like to highlight is our accomplishments last

1239
01:42:44,920 --> 01:42:49,360
 year or the current fiscal year was again our reliability so other than

1240
01:42:49,360 --> 01:42:53,640
 winter storm URI those were controlled outages so that those do not count in

1241
01:42:53,640 --> 01:43:02,000
 our metrics but again we were we were awarded an APPA certification for our

1242
01:43:02,000 --> 01:43:06,480
 reliability so that's the American Public Power Association is kind of our the

1243
01:43:06,480 --> 01:43:12,160
 national trade organization for municipalities so again that's our third

1244
01:43:12,160 --> 01:43:17,480
 year in a row and new this year is our reliable public power provider so that's

1245
01:43:17,480 --> 01:43:23,160
 a program it's a pretty elite company that we're in so we submitted about a

1246
01:43:23,160 --> 01:43:28,600
 month-long application how we operate our business our reliability metrics our

1247
01:43:28,600 --> 01:43:35,120
 staffing our staff training and just it's just honor for us to get that to

1248
01:43:35,120 --> 01:43:40,040
 get that award and finally on here we energized Brinker substation so that

1249
01:43:40,040 --> 01:43:44,880
 that's a substation that's located over by the DME campus a pretty large project

1250
01:43:44,880 --> 01:43:50,440
 to it for us we got that energized this summer and then got it into our rate

1251
01:43:50,440 --> 01:43:57,800
 base for our t-cost looking forward to the upcoming year the one at the top

1252
01:43:57,800 --> 01:44:03,160
 here is probably the most the most relevant to the utility that is our our

1253
01:44:03,160 --> 01:44:07,400
 full rate case that we have to submit to the Public Utility Commission of Texas

1254
01:44:07,400 --> 01:44:12,640
 so as you might probably don't know the the last time the DME submitted a rate

1255
01:44:12,640 --> 01:44:17,880
 case a full rate case was in the early 2000s that's right after deregulation so

1256
01:44:17,880 --> 01:44:21,880
 that's something that that Cassie will speak to that they could have some

1257
01:44:21,880 --> 01:44:26,880
 serious consequences to our finances some other stuff on here that we have

1258
01:44:26,880 --> 01:44:31,140
 planned a complete a cost of service study as you know you'll be looking at

1259
01:44:31,140 --> 01:44:37,680
 the rates going forward our current cost of service study is outdated so when it

1260
01:44:37,680 --> 01:44:43,680
 was done in 2017 we still had Givens Creek online so we're actually buying

1261
01:44:43,680 --> 01:44:48,360
 that power our portion of the power that and our t-cost revenue have gone up

1262
01:44:48,360 --> 01:44:53,760
 substantially so the new cost of service will take those into account and a new

1263
01:44:53,760 --> 01:44:58,920
 thing we're excited about this year is as a tree line USA utility designation so

1264
01:44:58,920 --> 01:45:05,420
 as you may know the city of Denton is a tree city USA so this is another Arbor

1265
01:45:05,420 --> 01:45:11,080
 Day a program that acknowledges that our tree trimming program meets all that

1266
01:45:11,080 --> 01:45:15,280
 that meets all of their guidelines for responsible vegetation management and

1267
01:45:15,280 --> 01:45:19,480
 finally I know we've been in front of you a lot the last couple years our last

1268
01:45:19,480 --> 01:45:24,400
 major construction project is getting ready to kick off and that's the Hickory

1269
01:45:24,400 --> 01:45:29,640
 GIS substation and the associated transmission line that will connect

1270
01:45:29,640 --> 01:45:35,440
 locus to Hickory through the UNT campus when we complete this project we'll have

1271
01:45:35,440 --> 01:45:41,720
 our inner loop a ring back up and projects going forward should be for

1272
01:45:41,720 --> 01:45:46,520
 expansion which would be the underwood substation for the Hunter coal ranch and

1273
01:45:46,520 --> 01:45:52,120
 again and another hot topic item is our LED retrofit program we're continuing on

1274
01:45:52,120 --> 01:45:56,240
 with that and we did have a delay of about three months but we still look to

1275
01:45:56,240 --> 01:46:02,640
 wrap that up not this fiscal year but the following fiscal year here's a graph

1276
01:46:02,640 --> 01:46:07,460
 that we bring every year during the budget and it's a rate comparison so the

1277
01:46:07,460 --> 01:46:13,360
 the graph on the left is how our rates compare to comparably sized I mean other

1278
01:46:13,360 --> 01:46:18,540
 meanies in the state of Texas so as you can see we're a couple dollars below the

1279
01:46:18,540 --> 01:46:26,720
 average right at $124.80 kind of a middle of the pack and new this year is now

1280
01:46:26,720 --> 01:46:32,640
 that we are 100% renewable we added a graph where we compare our rates which

1281
01:46:32,640 --> 01:46:37,120
 we only have one rates it's 100% renewable with some competitive packages

1282
01:46:37,120 --> 01:46:42,080
 out there that are a 12-month term they're also 100% renewable so these are

1283
01:46:42,080 --> 01:46:45,800
 the power to choose if you live in an encore or any part of Texas you would

1284
01:46:45,800 --> 01:46:51,080
 have access to these to these programs so as you can see our hundred twenty four

1285
01:46:51,080 --> 01:46:56,640
 eighty is just a dollar or two more than the average for those plans so any

1286
01:46:56,640 --> 01:46:59,840
 questions on that it's it's a little it's it's kind of new we picked the zip

1287
01:46:59,840 --> 01:47:04,680
 code in Denton that has encore and that's how we were able to to get these

1288
01:47:04,680 --> 01:47:06,960
 rates

1289
01:47:06,960 --> 01:47:14,960
 doesn't appear to be our key metric that we have that probably most people came

1290
01:47:14,960 --> 01:47:20,560
 to understand during winter storm URI is what we call system average interruption

1291
01:47:20,560 --> 01:47:25,620
 duration index or Sadie so what this is is basically when that when the lights

1292
01:47:25,620 --> 01:47:30,360
 go out how quickly do we get them back on on an average basis so as you can see

1293
01:47:30,360 --> 01:47:37,440
 the the 2020 national average was about 139 minutes our average came in at a

1294
01:47:37,440 --> 01:47:42,320
 little over 34 minutes so this is from we get the call we get our guys out

1295
01:47:42,320 --> 01:47:48,520
 there it's the time it takes us to to restore the average I will note 2017 as

1296
01:47:48,520 --> 01:47:52,920
 you remember was a bad storm year we had those straight-line winds and the small

1297
01:47:52,920 --> 01:48:00,720
 tornadoes and so that year is a little above our average FTE's so we have as

1298
01:48:00,720 --> 01:48:05,000
 Tony mentioned and in his part of the presentation we were down 20 FTE's

1299
01:48:05,000 --> 01:48:12,880
 through the VSP program so that dropped us from 189 to 169 and that was probably

1300
01:48:12,880 --> 01:48:18,200
 very very lean for our organization as the other utilities I think Brian had a

1301
01:48:18,200 --> 01:48:23,600
 very good graph the growth we realized that in the last 10 years we've added

1302
01:48:23,600 --> 01:48:30,680
 about 65 miles of distribution lines so we have more system to maintain yet we

1303
01:48:30,680 --> 01:48:34,520
 were doing it with significantly less people so I think what you will see we

1304
01:48:34,520 --> 01:48:39,800
 did add two positions mid-year one of those was in operations and one of them

1305
01:48:39,800 --> 01:48:43,840
 was in engineering but as you'll see we're really evaluating how do we

1306
01:48:43,840 --> 01:48:49,520
 right-size our organization so with that we're proposing two additional FTE's for

1307
01:48:49,520 --> 01:48:54,880
 the upcoming budget the first I'll start with is the line designer for engineering

1308
01:48:54,880 --> 01:49:00,320
 so again the common thing is growth so this is our it's an engineering staff

1309
01:49:00,320 --> 01:49:04,640
 member that does our review our plan reviews so we right now we have one

1310
01:49:04,640 --> 01:49:10,440
 individual that does that and it's just starting to to be more than he can then

1311
01:49:10,440 --> 01:49:14,100
 he can manage so that this is another position that will work in the

1312
01:49:14,100 --> 01:49:19,560
 engineering department and support that plan review the second is our senior

1313
01:49:19,560 --> 01:49:24,920
 business intelligence analyst I can't apply for it because I can't even say it

1314
01:49:24,920 --> 01:49:29,880
 what this is in our EMO our EMO handles massive amounts of data so they have

1315
01:49:29,880 --> 01:49:34,600
 data coming from ERCOT from weather forecasts from all their sources of

1316
01:49:34,600 --> 01:49:40,080
 information that they use so it's overwhelming so this person's duties is

1317
01:49:40,080 --> 01:49:45,080
 managing that data flow and getting it into a form that these guys can use

1318
01:49:45,080 --> 01:49:52,360
 every day to make to make smart business decisions where's your

1319
01:49:52,360 --> 01:49:58,680
 meteorologist he's coming okay and Terry is listening right now and he's

1320
01:49:58,680 --> 01:50:05,160
 cringing so we do have three supplemental they all have to do with

1321
01:50:05,160 --> 01:50:09,920
 either a service or an FTE so as I mentioned the the senior business

1322
01:50:09,920 --> 01:50:15,160
 intelligence analyst and the line designer those will be two new FTEs and

1323
01:50:15,160 --> 01:50:20,000
 much to Mr. Naltjes Chagrin he's not getting a full-time meteorologist

1324
01:50:20,000 --> 01:50:24,960
 meteorologist on his staff so what we have elected instead is to put forth

1325
01:50:24,960 --> 01:50:32,040
 that money into a service so the basis of this service is as you know everybody

1326
01:50:32,040 --> 01:50:36,360
 knew the winter storm URI was coming but what happened was the models kept

1327
01:50:36,360 --> 01:50:41,040
 sliding so if you remember they had a hitting earlier in the week and it ended

1328
01:50:41,040 --> 01:50:45,560
 up sliding into a holiday Monday which you know if we would have known

1329
01:50:45,560 --> 01:50:48,720
 the severity of it which they didn't have right in the timing of it it would

1330
01:50:48,720 --> 01:50:53,000
 have been they could have taken some more steps to mitigate that so with that

1331
01:50:53,000 --> 01:50:58,400
 would be instead of Terry getting his wish is is what we will procure those

1332
01:50:58,400 --> 01:51:07,800
 services on just on contract basis so here's our capital improvement plan so

1333
01:51:07,800 --> 01:51:12,440
 as you know URI is a common theme here it was a financial hit for us so we

1334
01:51:12,440 --> 01:51:17,560
 looked at everything we could do to to offset or help mitigate those those

1335
01:51:17,560 --> 01:51:21,560
 effects to our to our performer so as you will see here is our capital

1336
01:51:21,560 --> 01:51:25,400
 improvement plan and I know mr. Cheeks been here for a while you do notice the

1337
01:51:25,400 --> 01:51:29,760
 numbers are getting smaller so we're about to get all of our expensive stuff

1338
01:51:29,760 --> 01:51:35,360
 completed it's still heavily loaded in 22 and 23 that is the hickory GIS

1339
01:51:35,360 --> 01:51:41,160
 substation and the associated transmission line and the other cost you

1340
01:51:41,160 --> 01:51:47,720
 see on here just our average annual CIP expenses so and as you will see as we

1341
01:51:47,720 --> 01:51:51,720
 wrap up these projects that that number is falling off significant significantly

1342
01:51:51,720 --> 01:51:59,880
 in the out years and it also as Tony noted we we reduced our CIP request this

1343
01:51:59,880 --> 01:52:07,920
 year by about 20 million dollars our major projects that we have going on is

1344
01:52:07,920 --> 01:52:14,080
 a couple I'd like to hit on here the first is a our pole replacement so as

1345
01:52:14,080 --> 01:52:17,680
 you imagine you drive around we have a lot of wooden poles in the city of

1346
01:52:17,680 --> 01:52:24,320
 various ages right at about 10,000 of them so we kicked off an inspection just

1347
01:52:24,320 --> 01:52:29,400
 to start with scratch we're inspecting inspecting every pole on our system and

1348
01:52:29,400 --> 01:52:35,560
 what we're finding out is our failure rate or out of spec rate right now we're

1349
01:52:35,560 --> 01:52:40,320
 through about half the poles so about five thousand fifty five hundred we have

1350
01:52:40,320 --> 01:52:44,440
 a thousand that we need to replace so this is a preventative maintenance for

1351
01:52:44,440 --> 01:52:48,920
 us they are identifying some critical poles we try to get those switched out

1352
01:52:48,920 --> 01:52:52,680
 in a week but generally what they're finding that our poles are out of spec

1353
01:52:52,680 --> 01:52:56,760
 so meaning that at some point in the near future they need to be replaced so

1354
01:52:56,760 --> 01:53:03,640
 that's a reliability project for us secondly is the streetlight program the

1355
01:53:03,640 --> 01:53:09,000
 three million dollars so as you know our new subdivisions their design lighting

1356
01:53:09,000 --> 01:53:12,600
 they have lighting plans they're properly lit so but our older

1357
01:53:12,600 --> 01:53:17,400
 neighborhoods was kind of put one every 300 feet and and see what happens so we

1358
01:53:17,400 --> 01:53:23,240
 actually have a study going on to determine what is the an adequate light

1359
01:53:23,240 --> 01:53:27,920
 level in neighborhoods so with that the results of that study and this money we

1360
01:53:27,920 --> 01:53:32,240
 will then go into these to these darker neighborhoods and get them properly

1361
01:53:32,240 --> 01:53:37,000
 illuminated and finally the last one on here is our big ticket item that's the

1362
01:53:37,000 --> 01:53:43,960
 hickory GIS substation so as Tony noted in the past well we had the option so

1363
01:53:43,960 --> 01:53:47,920
 the deck was was very expensive we had to issue all the bonds up front even

1364
01:53:47,920 --> 01:53:52,240
 though it took us three years to build it so with this commercial paper program

1365
01:53:52,240 --> 01:53:59,600
 we can more match those the bonds to the our cash flow needs saving us some money

1366
01:53:59,600 --> 01:54:05,040
 I should note that if you add all that up is about 58 million about 24 and a

1367
01:54:05,040 --> 01:54:09,660
 half million of that is transmission related so it will be put into our rate

1368
01:54:09,660 --> 01:54:13,840
 base it will be able to recover those costs through our transmission cost to

1369
01:54:13,840 --> 01:54:18,240
 service and finally just another note that that bottom note is about the

1370
01:54:18,240 --> 01:54:22,600
 commercial paper so we'll better match our debt issuance with our with our cash

1371
01:54:22,600 --> 01:54:27,360
 flow needs so with that I'll answer any questions on the operations and before I

1372
01:54:27,360 --> 01:54:36,140
 turn it over to Cassie any questions not at this point thank you all right thank

1373
01:54:36,140 --> 01:54:46,960
 you good morning board Cassie Ogden director of finance so I wanted to go

1374
01:54:46,960 --> 01:54:52,320
 back through I know you've heard a lot about winter storm Uri today when when

1375
01:54:52,320 --> 01:54:57,160
 it hit in February we did expect a large financial impact you saw that we we've

1376
01:54:57,160 --> 01:55:01,760
 made several presentations regarding that impact and what we expected it to do

1377
01:55:01,760 --> 01:55:06,460
 to our budget next year so as you may recall our net expenses of the storm

1378
01:55:06,460 --> 01:55:11,800
 originally we expected it to be about 140 million due to that outstanding

1379
01:55:11,800 --> 01:55:18,840
 uplift charge of 9 million it's it's come to approximately 150 million we did

1380
01:55:18,840 --> 01:55:23,980
 receive direction to issue commercial paper notes to pay for that with the

1381
01:55:23,980 --> 01:55:27,480
 idea that we would refund those short-term commercial paper notes to

1382
01:55:27,480 --> 01:55:32,720
 long-term bonds to mitigate the the impact to the fund instead of all of

1383
01:55:32,720 --> 01:55:35,720
 that hundred and forty or hundred and fifty million hitting the electric fund

1384
01:55:35,720 --> 01:55:43,480
 in one year we're we're selling bonds to over 30 years so you'll see that in the

1385
01:55:43,480 --> 01:55:47,960
 pro forma in just a couple of slides and then previously we discussed with you

1386
01:55:47,960 --> 01:55:54,920
 and counsel the possibility of how do we pay make that that debt payment so we

1387
01:55:54,920 --> 01:56:00,360
 were discussing possibly five percent increase to electric rates for for this

1388
01:56:00,360 --> 01:56:06,520
 upcoming fiscal year however due to some uncertainties in the budget and just

1389
01:56:06,520 --> 01:56:12,240
 some outlying things that we we don't have great forecasts for yet we'd like

1390
01:56:12,240 --> 01:56:17,080
 to reevaluate the need for a rate increase mid-year so coming back

1391
01:56:17,080 --> 01:56:22,000
 possibly in December next year because Tony and Chris already talked about

1392
01:56:22,000 --> 01:56:26,360
 that that full rate filing that we were under that transmission cost of service

1393
01:56:26,360 --> 01:56:31,520
 revenue we're forecasting to decrease substantially but we we don't have the

1394
01:56:31,520 --> 01:56:36,160
 final rate filing yet so we don't know this is our best guess based on you know

1395
01:56:36,160 --> 01:56:39,580
 current factors that are known but there's still a lot of outstanding

1396
01:56:39,580 --> 01:56:45,120
 factors and then we do have a couple other items that could that will impact

1397
01:56:45,120 --> 01:56:50,160
 our financial situation so the TMPA mine sale the some potential data center

1398
01:56:50,160 --> 01:56:53,960
 projects and then also our cost of service study we are in the middle of

1399
01:56:53,960 --> 01:56:57,880
 that cost of service study we didn't want to make any rate changes without

1400
01:56:57,880 --> 01:57:03,320
 having that cost of service to justify the rate structure changes or impact or

1401
01:57:03,320 --> 01:57:09,960
 changes to the overall rate increase so some financial assumptions that are built

1402
01:57:09,960 --> 01:57:14,200
 into the performer that you're about to see our average load growth is one and a

1403
01:57:14,200 --> 01:57:20,580
 half percent over the next five years I talked about that t-cost revenue so we

1404
01:57:20,580 --> 01:57:26,720
 had previously expected it to it's it's about 28% we've decreased that to 13 and

1405
01:57:26,720 --> 01:57:30,840
 a half percent which is substantial on our revenues and I'll show you that in

1406
01:57:30,840 --> 01:57:36,400
 the performer again that ROI because of COVID we did increase the ROI transfer

1407
01:57:36,400 --> 01:57:42,320
 to the general fund to six percent that will change in 2023 back to three and a

1408
01:57:42,320 --> 01:57:45,880
 half percent so that's tentatively scheduled right now in the performer and

1409
01:57:45,880 --> 01:57:51,400
 then again some uncertainties obviously we're right now in the middle of summer

1410
01:57:51,400 --> 01:57:54,720
 but we don't know how the deck will perform the rest of the year so we're

1411
01:57:54,720 --> 01:57:59,400
 expecting the deck revenue to come in higher than we forecasted which will

1412
01:57:59,400 --> 01:58:04,000
 change our financial picture by the end of the fiscal year we've already talked

1413
01:58:04,000 --> 01:58:08,040
 about the transmission cost of service revenue and that rate filing impact as

1414
01:58:08,040 --> 01:58:14,560
 well as the cost of service study you may recall the reserve levels some of

1415
01:58:14,560 --> 01:58:20,720
 those changes so we did bring reserve targets to you to discuss kind of

1416
01:58:20,720 --> 01:58:25,120
 changing that reserve levels for electric we're keeping them the same for

1417
01:58:25,120 --> 01:58:29,200
 water wastewater but we did propose increasing those based on the winter

1418
01:58:29,200 --> 01:58:33,600
 storm impact for electric we discussed that with council and did get direction

1419
01:58:33,600 --> 01:58:39,240
 but they have not approved a formal policy of that change so I have the

1420
01:58:39,240 --> 01:58:42,480
 performer built up to where it shows you the current reserve level and then that

1421
01:58:42,480 --> 01:58:51,400
 proposed reserve level so we are not proposing at this time a rate increase

1422
01:58:51,400 --> 01:58:56,240
 for electric based on all of those uncertainties that I mentioned just a

1423
01:58:56,240 --> 01:59:01,760
 moment ago we felt like it would be premature to increase the electric rates

1424
01:59:01,760 --> 01:59:06,480
 also you can see we're still we're projecting to be next year at a hundred

1425
01:59:06,480 --> 01:59:11,880
 and nineteen million dollars for our fund balance which would be right in the

1426
01:59:11,880 --> 01:59:17,880
 middle of that proposed reserve target range which is good news but 2023 is

1427
01:59:17,880 --> 01:59:22,440
 really where you start seeing that impact to the t-cost revenue that non

1428
01:59:22,440 --> 01:59:26,800
 rate revenue line you can see it going from 60 million to 45 million that's

1429
01:59:26,800 --> 01:59:32,760
 that thirteen and a half percent reduction or thirteen and a half percent rate of the

1430
01:59:32,760 --> 01:59:38,160
 t-cost revenue so it was previously 28 percent dipping down to thirteen and a

1431
01:59:38,160 --> 01:59:42,880
 half percent and that's still just a projection so a couple other things to

1432
01:59:42,880 --> 01:59:49,880
 point out obviously the estimate 2021 deck revenue a lot higher as well as the

1433
01:59:49,880 --> 01:59:55,600
 purchase power but we have shown the debt service starting for winter storm

1434
01:59:55,600 --> 02:00:00,400
 you're restarting in 2022 you can see that six point two million dollars as

1435
02:00:00,400 --> 02:00:05,920
 well as your supplemental packages that Chris just reviewed and because a couple

1436
02:00:05,920 --> 02:00:10,360
 of those are positions they're reoccurring in the future years I'm just

1437
02:00:10,360 --> 02:00:14,680
 wanted to point out again the reserve targets are not have not been formally

1438
02:00:14,680 --> 02:00:19,320
 adopted by council but we are we are tentatively showing them and we don't

1439
02:00:19,320 --> 02:00:24,120
 dip below those reserve targets until 2024 but again with so many

1440
02:00:24,120 --> 02:00:29,240
 uncertainties don't want to don't want to plan for rate increases yet based on

1441
02:00:29,240 --> 02:00:34,480
 just those outstanding items that will have a have a financial impact but we

1442
02:00:34,480 --> 02:00:42,720
 just don't know what that will look like yet and so Nick has already mentioned

1443
02:00:42,720 --> 02:00:46,880
 the next steps we will be bringing more budget and rate discussion back to you

1444
02:00:46,880 --> 02:00:51,840
 in July and then City Council will have their budget workshop in August with

1445
02:00:51,840 --> 02:00:55,720
 formal adoption in September and I'm happy to answer any questions you have

1446
02:00:55,720 --> 02:01:05,160
 on the financial piece so yes it's not an exact science that is right I'm sorry

1447
02:01:05,160 --> 02:01:10,480
 mr. right back did you have a question yes sir ma'am I was wondering the six

1448
02:01:10,480 --> 02:01:15,720
 point two million roughly you show starting next year on those payments for

1449
02:01:15,720 --> 02:01:22,480
 the debt how long is the term of that bond that is 30-year bond so it's it's

1450
02:01:22,480 --> 02:01:28,840
 the same as what our other bonds are electric sells 30-year bond the other

1451
02:01:28,840 --> 02:01:37,120
 utilities usually sell 20-year 20-year bond thank you very much questions on

1452
02:01:37,120 --> 02:01:48,200
 the budget doesn't look like it thank you thank you that's the last of our

1453
02:01:48,200 --> 02:01:55,640
 presentations okay well you got anything else Tony no sir I'll just I'll just say

1454
02:01:55,640 --> 02:02:01,400
 that if many of the board members have any questions after today please feel

1455
02:02:01,400 --> 02:02:05,480
 feel feel free to direct them to Cassie and and Nick and they can certainly work

1456
02:02:05,480 --> 02:02:09,920
 with the department so we'll be back to you again here and you know through the

1457
02:02:09,920 --> 02:02:16,760
 month of June and ultimately before the end of July we'll be asking you to

1458
02:02:16,760 --> 02:02:22,280
 recommend to give us a recommendation on on these budgets and turning the rates

1459
02:02:22,280 --> 02:02:27,480
 as well that will be then discussing with the City Council during their their

1460
02:02:27,480 --> 02:02:31,760
 budget workshop and again that's just part of the role of the process that we

1461
02:02:31,760 --> 02:02:36,400
 follow through you know with with the PUB and and the council will know that

1462
02:02:36,400 --> 02:02:40,920
 you've made a recommendation either for or against against that budget so if

1463
02:02:40,920 --> 02:02:45,800
 there's any changes we'll be happy to work with you guys on that so again and

1464
02:02:45,800 --> 02:02:50,160
 as usual thank you staff for making this so we can understand it and I really

1465
02:02:50,160 --> 02:02:54,480
 appreciate you bringing it to us like in that form and having the detail there so

1466
02:02:54,480 --> 02:03:00,020
 that we can go into that as well so thank you again and with that I think we

1467
02:03:00,020 --> 02:03:03,040
 We stand adjourned.