WEBVTT 00:00:00.000 --> 00:00:06.120 Good morning and welcome everybody to the Public Utility Board meeting for the 00:00:06.120 --> 00:00:13.920 City of Dinton Monday June 28th 2021 it is 9.01 a.m. on my clock and we're going 00:00:13.920 --> 00:00:18.680 to start by calling the meeting to order and next we're going to see if are there 00:00:18.680 --> 00:00:22.800 any members of the public that would like to speak address the board or 00:00:22.800 --> 00:00:29.560 anyone online. Good morning chair we have no comments this morning online or on 00:00:29.560 --> 00:00:40.920 the phones. Where are you? Okay thank you. They said I'd see her when she came out. 00:00:40.920 --> 00:00:46.400 Since there are no presentations from members of the public we'll move on 00:00:46.400 --> 00:00:51.560 to items for individual consideration. First one being the approval of the June 00:00:51.560 --> 00:00:58.480 14 2021 minutes. Would anyone like to move to approve those minutes? Move 00:00:58.480 --> 00:01:05.160 approval. I have a motion. Do I have a second? Second. All those in favor please 00:01:05.160 --> 00:01:13.100 say aye. Aye. Any opposed sign the same. Passes with the quorum unanimously. 00:01:13.100 --> 00:01:18.320 Next we have item 2B which is receive nominations and elect a 00:01:18.320 --> 00:01:24.320 secretary. Does anybody have any nominations? I mean normally I think we 00:01:24.320 --> 00:01:33.200 should probably get someone that's not here right that didn't show today but the 00:01:33.200 --> 00:01:38.560 other. We're not showing up. That's right absolutely but the secretary's duties 00:01:38.560 --> 00:01:43.600 usually are just same as a second vice-chair. We really don't have any 00:01:43.600 --> 00:01:51.040 secretary duties other than that I believe so. Any nominations? 00:01:54.360 --> 00:01:59.480 Any thoughts? Anybody anyone want to volunteer that's here? I'm stepping down 00:01:59.480 --> 00:02:09.760 soon so I'm out of it. I'm not caring. I think that leaves Barbara. Okay I'll do 00:02:09.760 --> 00:02:14.160 it. Okay very good. Well you want to nominate Barbara Karen? Yes I'll nominate 00:02:14.160 --> 00:02:23.960 formally nominate Barbara. Russell? Do I hear a second? Second. Motion and a second 00:02:23.960 --> 00:02:31.320 all those in favor please say aye. Aye. Opposed sign the same. Passes unanimously. 00:02:31.320 --> 00:02:36.440 We're moving on to item 2C management reports. 00:02:36.440 --> 00:02:45.440 We have a couple of items for you. The first one is we have a report that was 00:02:45.440 --> 00:02:50.520 done by the by the internal auditor. She provided a memo to you on the water 00:02:50.520 --> 00:02:54.800 system rate structure. She's here and available if you have any questions on 00:02:54.800 --> 00:03:08.320 on on that memo. Okay there appear to be comments. All right so if there's no 00:03:08.320 --> 00:03:13.240 questions we'll move on to the future agenda items. Obviously starting today we 00:03:13.240 --> 00:03:18.680 do have preliminary discussions with you about the utility budgets. It is it is 00:03:18.680 --> 00:03:22.560 preliminary and Nick Vinson our director finances here and also Cassie Ogden our 00:03:22.560 --> 00:03:27.280 director of finance. They'll try to be introducing the item kind of let you know 00:03:27.280 --> 00:03:31.680 what the next steps are but that's really what what's on the agenda is to 00:03:31.680 --> 00:03:39.280 come back to you on July 2nd. Chairman, Mr. Chairman if I could interject and I 00:03:39.280 --> 00:03:48.480 apologize the memo in question you just referred to is actually quite long and I 00:03:48.480 --> 00:03:55.400 was wondering if the department had any response to the audit. Yeah we can get 00:03:55.400 --> 00:04:00.520 either Stephen Gay or Nick Vincent to address any any questions you may have. 00:04:00.520 --> 00:04:06.320 So so Lee at the very end there's the responses just very in very broad terms 00:04:06.320 --> 00:04:12.320 at the very end of the long document. Ah thank you. Yep. I did not realize that 00:04:12.320 --> 00:04:15.240 we got about page three or four I was like I don't think I'm gonna knock this 00:04:15.240 --> 00:04:20.240 out this morning. Yeah if you start at the back which is always a good idea. 00:04:20.240 --> 00:04:28.800 Well that's a good tip. So there's well Nick can handle this. Mr. Ryback can you 00:04:28.800 --> 00:04:36.860 hear me? Yes. Okay yes so we will be bringing back a conversation to the 00:04:36.860 --> 00:04:41.120 Public Utilities Board next month based on that audit and the recommendation 00:04:41.120 --> 00:04:45.960 to change the water rate structure. So we did receive guidance from City Council 00:04:45.960 --> 00:04:48.920 last week to look at the water rate structure and bring that conversation 00:04:48.920 --> 00:04:53.480 back to you mainly focused on the first tier within water which is currently 0 00:04:53.480 --> 00:04:57.040 to 15,000 gallons. So we're gonna bring back some options for the Public 00:04:57.040 --> 00:05:00.360 Utility Board and City Council but they will be in the next two to three weeks. 00:05:00.360 --> 00:05:04.480 So to answer your question we will have a presentation for you on that in the 00:05:04.480 --> 00:05:10.440 coming weeks. Is that okay with you? All righty then I'll look forward to the 00:05:10.440 --> 00:05:13.600 presentation. I apologize for the interruption but I just had realized the 00:05:13.600 --> 00:05:18.360 document was quite lengthy so I thought we were kind of going over it a bit too 00:05:18.360 --> 00:05:21.160 quickly but if we're gonna have a work session on it and go over it that's fine 00:05:21.160 --> 00:05:25.860 and I apologize for the interruption thank you. No worries thank you. Mr. Ryback 00:05:25.860 --> 00:05:29.640 really quick too if you would want to see a presentation today and the 00:05:29.640 --> 00:05:33.520 internal auditor Madison does have a presentation she can present to you 00:05:33.520 --> 00:05:41.640 otherwise it'll come back to you in a couple weeks. I'd prefer to see in a 00:05:41.640 --> 00:05:45.640 couple of weeks since we've got some pretty good budget presentations 00:05:45.640 --> 00:05:52.120 this morning if that's okay with you member Ryback. However it works out we 00:05:52.120 --> 00:05:56.840 can do it today fine if not the next meeting is fine as well thank you. Okay 00:05:56.840 --> 00:06:03.080 thank you thanks Nick. Okay the last item Mr. Chair is just the new business 00:06:03.080 --> 00:06:06.760 action item again we still have some some general items that we'll be 00:06:06.760 --> 00:06:12.160 addressing with the board you know during the budgetary discussions and then 00:06:12.160 --> 00:06:17.720 the final item is really the request about the legislative update you may or 00:06:17.720 --> 00:06:22.760 may not know that the governor did recently call a special session and so 00:06:22.760 --> 00:06:27.040 we're gonna kind of wait and see kind of what happens as we're here right now 00:06:27.040 --> 00:06:32.320 there's not there may not be any discussions about ERCOT or the grid but 00:06:32.320 --> 00:06:35.880 we're waiting to see what that agenda might look like and if there are going 00:06:35.880 --> 00:06:39.320 to be items we may wait until after the special session to come back to you and 00:06:39.320 --> 00:06:44.080 give you a legislative update so that way we can just do it all at once but 00:06:44.080 --> 00:06:49.200 with that happy to answer any questions you may have on on any of those action 00:06:49.200 --> 00:06:55.800 items or future agenda items. Does any member have any requests for future 00:06:55.800 --> 00:07:04.240 agenda items new business? Mr. Chairman I have a question. Yes sir. There was some 00:07:04.240 --> 00:07:12.760 discussion earlier by waste management about a pilot program I think for yard 00:07:12.760 --> 00:07:17.480 waste residential yard waste composting it I was wondering if there's been any 00:07:17.480 --> 00:07:24.400 progress on that you could give us an update. Good morning members of the 00:07:24.400 --> 00:07:28.000 board. Brian Burner director of solid waste for the city of Denton. As you're 00:07:28.000 --> 00:07:32.320 aware for about the last two years we have had a very successful yard waste 00:07:32.320 --> 00:07:38.120 program implemented here in the city of Denton. This is not new we you know 00:07:38.120 --> 00:07:45.480 you either opt in opt out we collect only paper craft bags or carts and we've 00:07:45.480 --> 00:07:51.360 always had the opportunity for residents to put what we call pre-consumer 00:07:51.360 --> 00:07:55.560 vegetative waste in there so the ends of your celery stalks you know apple cores 00:07:55.560 --> 00:08:00.200 things of that nature if it's been cooked prepared has oil grease salts you 00:08:00.200 --> 00:08:04.640 know anything of that nature that cannot go again cannot go into the cart but 00:08:04.640 --> 00:08:10.320 anything that's vegetative that is precooked or used in the preparation can 00:08:10.320 --> 00:08:16.560 be put in that material. A couple weeks ago I believe there was a grant proposal 00:08:16.560 --> 00:08:19.440 that was brought before you what we're wanting to do from a proposal 00:08:19.440 --> 00:08:23.580 standpoint is we've applied to the North Central Texas Council of Governments for 00:08:23.580 --> 00:08:29.440 a grant to expand this and work closely with our friends over at wastewater to 00:08:29.440 --> 00:08:37.280 collect post consumer food waste from the valet the downtown restaurant areas. 00:08:37.280 --> 00:08:41.520 What we want to do is be able to take that in grind it up actually put it in 00:08:41.520 --> 00:08:45.480 the wastewater digesters get methane off the top that we can purify put back in 00:08:45.480 --> 00:08:52.200 the pipeline the the back part is digested down it goes into the biosolids 00:08:52.200 --> 00:08:56.120 which we turn into the down order and sell so it's a wonderful closed loop 00:08:56.120 --> 00:09:00.480 system part of this process is to see how efficient we can be. Secondarily make 00:09:00.480 --> 00:09:05.280 sure we have capacity so that as we look to expanding this we have to we 00:09:05.280 --> 00:09:09.360 identify when we might need to build another digester or a digester 00:09:09.360 --> 00:09:14.400 specific to food waste management so it's a it's an opportunity that that I 00:09:14.400 --> 00:09:18.960 think that the time has come we just got to make sure all the parts are in the 00:09:18.960 --> 00:09:24.280 right right order. I would imagine you still and in the past I know you've had 00:09:24.280 --> 00:09:28.480 a lot of good conversations with the downtown folks. Yes they are wonderful 00:09:28.480 --> 00:09:32.500 partners I think if you you you compare what's happening in downtown now versus 00:09:32.500 --> 00:09:36.840 downtown about 18 months ago you know it's cleaner it's from an aesthetic 00:09:36.840 --> 00:09:41.400 standpoint it's much better to look at we've got about 20 25 more parking 00:09:41.400 --> 00:09:45.680 spaces which is most important they're around the square so you know and you 00:09:45.680 --> 00:09:48.920 know really our solid waste folks that are working that really sort of become 00:09:48.920 --> 00:09:52.320 the ambassadors they're they're always telling people where to go and what 00:09:52.320 --> 00:09:56.440 they're doing so you know it's it's a it's a good fit. Okay very good thank you 00:09:56.440 --> 00:10:00.640 Brian. Thank you. To answer your question member Ryback. Yes sir thank you very 00:10:00.640 --> 00:10:09.700 much. Thank you. Okay any other future agenda items for suggestions? There's no 00:10:09.700 --> 00:10:14.680 new business action items either? Then I guess we'll move on to concluding items. 00:10:14.680 --> 00:10:18.960 Is that the way you want to do this? I guess that's all that we got after that. 00:10:18.960 --> 00:10:28.280 Okay all right I need to read this whole thing don't I? Okay under section 551.042 00:10:28.280 --> 00:10:31.840 of the Texas Open Meetings Act respond to inquiries from the public utility 00:10:31.840 --> 00:10:35.800 boards or the public with specific factual information or recitation of 00:10:35.800 --> 00:10:39.560 policy or accept a proposal to place the matter on the agenda for an 00:10:39.560 --> 00:10:45.200 upcoming meeting and under section 551.0415 of the Texas Open 00:10:45.200 --> 00:10:49.560 Meetings Act provide reports about items of community interest regarding which 00:10:49.560 --> 00:10:55.520 no action will be taken to include expression of thanks, congratulations or 00:10:55.520 --> 00:11:00.480 condolence, information regarding holiday schedules, an honorary or salutary 00:11:00.480 --> 00:11:05.240 recognition of a public official, public employee or other citizen, a reminder 00:11:05.240 --> 00:11:08.520 about an upcoming event organized or sponsored by the governing body, 00:11:08.520 --> 00:11:12.880 information regarding a social ceremonial or community event organized 00:11:12.880 --> 00:11:16.280 or sponsored by an entity entity other than the governing body that was 00:11:16.280 --> 00:11:20.440 attended or is scheduled to be attended by a member of the governing body or an 00:11:20.440 --> 00:11:24.880 official employee or the municipality or an announcement involving an imminent 00:11:24.880 --> 00:11:28.640 threat to the public health and safety of people in the municipality that has 00:11:28.640 --> 00:11:34.720 arisen after the posting of the agenda. Following the completion of the regular 00:11:34.720 --> 00:11:37.640 meeting the public utility board would convene a work session at which the 00:11:37.640 --> 00:11:43.760 following items will be considered. This is to receive a report, this is work 00:11:43.760 --> 00:11:47.920 session A, PUB 21-114, receive a report, hold a discussion and give 00:11:47.920 --> 00:11:51.360 direction regarding the water, wastewater, drainage, solid waste, electric and 00:11:51.360 --> 00:11:57.600 environmental services, FOI 2021-2022, preliminary budget capital improvement 00:11:57.600 --> 00:12:03.340 program and five-year financial forecast. Good morning Chair, PV members, Nick 00:12:03.340 --> 00:12:07.080 Vinson, Assistant Director of Finance. It's my pleasure to be in front of you once 00:12:07.080 --> 00:12:11.520 again today. So I want to introduce this topic or these presentations and I'll 00:12:11.520 --> 00:12:15.440 turn it over to Stephen Gay to present water. So there's five presentations to 00:12:15.440 --> 00:12:19.840 be presented to you today, water, wastewater, solid waste, electric and 00:12:19.840 --> 00:12:24.160 environmental services. Each presentation is a joint presentation meaning that the 00:12:24.160 --> 00:12:27.640 director will present the first half of the presentation which is made up of 00:12:27.640 --> 00:12:30.660 operational information and then I'll return to the podium to present the 00:12:30.660 --> 00:12:34.720 financial information. Cassie Ogden will actually present the electric financial 00:12:34.720 --> 00:12:39.000 information and then I'll present the rest of them. With that I'll turn it over 00:12:39.000 --> 00:12:42.520 to Stephen. Please we encourage your questions, any comments that you have 00:12:42.520 --> 00:12:45.760 regarding the preliminary budget. We'll definitely take those back and build them 00:12:45.760 --> 00:12:50.120 into the future presentations to come back forward to you. 00:12:55.080 --> 00:13:14.800 Thank you Nick and good morning. Let me share my screen here. Good morning 00:13:14.800 --> 00:13:22.000 members of PUB, I'm Stephen Gay, the Director of Water Utilities. Before we 00:13:22.000 --> 00:13:25.520 get into the actual presentation I want to take this opportunity to introduce 00:13:25.520 --> 00:13:30.000 myself to you. I am new to the city of Denton but I'm not new to the water 00:13:30.000 --> 00:13:35.040 utilities. I started my career in 1993 working for the city of North Las Vegas 00:13:35.040 --> 00:13:40.520 as a water meter reader and I worked there until 2010 and when I left I was 00:13:40.520 --> 00:13:45.080 the supervisor over water system supervisor for all of our production 00:13:45.080 --> 00:13:49.080 storage and treatment facilities. Interesting thing about North Las Vegas 00:13:49.080 --> 00:13:53.640 when I started there we had a population of 64,000 and when I left in 2010 we 00:13:53.640 --> 00:13:58.400 served a population of over 360,000. From there my career took me to 00:13:58.400 --> 00:14:02.080 Long Beach to work for the Long Beach Water Department as their manager of 00:14:02.080 --> 00:14:06.680 security and emergency preparedness. In that role I really focused on the 00:14:06.680 --> 00:14:10.280 strategic planning, you know continuity of operations, continuity of business 00:14:10.280 --> 00:14:15.160 plans, emergency response recovery plans and doing risk and hazard and 00:14:15.160 --> 00:14:19.720 vulnerability assessments. From there I had an opportunity to transition 00:14:19.720 --> 00:14:24.640 back into a more operational centric role for the city of Westminster, Colorado 00:14:24.640 --> 00:14:30.280 as their manager of utilities operations where I ran my team and I ran a system 00:14:30.280 --> 00:14:34.880 very similar to the one that we have here in Denton and in 2021 I'm here now 00:14:34.880 --> 00:14:40.160 as your new Director of Water Utilities. Leadership, I am a servant leader, I'm 00:14:40.160 --> 00:14:45.440 very passionate about serving my community, my team and the organization. I 00:14:45.440 --> 00:14:51.560 build collaborative partnerships through open and honest communication and hold 00:14:51.560 --> 00:14:55.960 myself and others accountable for following up and following through and 00:14:55.960 --> 00:15:00.400 then I challenge myself and my team to look past the status quo and embrace 00:15:00.400 --> 00:15:05.160 emerging technologies where appropriate to better serve our community. I hold a 00:15:05.160 --> 00:15:08.560 Master of Science, Executive Master of Science in Crisis and Emergency 00:15:08.560 --> 00:15:13.480 Management, Bachelor of Science in Business Administration, I'm a certified 00:15:13.480 --> 00:15:17.680 water professional in the states of both Nevada and Colorado and I hold various 00:15:17.680 --> 00:15:22.880 certifications from the Federal Emergency Management Institute. I'm also 00:15:22.880 --> 00:15:27.600 associated with the American Water Works Association in California, Nevada. I was 00:15:27.600 --> 00:15:32.720 the chair of the Water Distribution Division, Rocky Mountain section in 00:15:32.720 --> 00:15:38.520 Colorado, I was the chair of the section. I sit on the National Committee, Standard 00:15:38.520 --> 00:15:42.000 Committee for Security and Emergency Preparedness Practices for the water 00:15:42.000 --> 00:15:48.920 sector and I have recently been elected as appointed to the board of the National 00:15:48.920 --> 00:15:52.200 Association for American Water Works Association. So that's a little bit about 00:15:52.200 --> 00:15:59.560 me. We'll move into the team. We have one vacancy which is our Director, Assistant 00:15:59.560 --> 00:16:04.300 Director of Operations, Preetem Dishmukh, I'm sure that you're familiar with him, 00:16:04.300 --> 00:16:08.480 he's probably been in front of you a time or two before. He is our Assistant 00:16:08.480 --> 00:16:12.800 Director of Asset Management and Infrastructure and then Kim Makin, I'm 00:16:12.800 --> 00:16:15.960 sure that you're all familiar with, she's that she's the glue that holds us all 00:16:15.960 --> 00:16:21.320 together. From an organizational structure that's pretty very traditional 00:16:21.320 --> 00:16:26.560 from my experience, Director of Utilities, administrative staff supporting 00:16:26.560 --> 00:16:30.960 the the Office of the Director and you have our Assistant Director over 00:16:30.960 --> 00:16:37.840 Operations which contains water production and that's Hector Ortiz, our 00:16:37.840 --> 00:16:41.800 field operations which is water field and wastewater field that's Casey Bowles 00:16:41.800 --> 00:16:49.440 and then water reclamation is Rusty Woolard. The Preetem's team, the Asset 00:16:49.440 --> 00:16:53.880 Management and Infrastructure is a focus on vertical assets. So vertical if you 00:16:53.880 --> 00:16:58.080 think about our structures like our treatment plants, our pump stations, our 00:16:58.080 --> 00:17:02.960 lift stations, so anything that exists in the vertical plane is a vertical asset. 00:17:02.960 --> 00:17:07.800 So they're really going to be focusing on that moving forward. The asset 00:17:07.800 --> 00:17:13.440 management team, Tyson Dawson is Tyler Dawson is focusing on both horizontal and 00:17:13.440 --> 00:17:17.520 vertical assets just you know making sure that we take keep good records of 00:17:17.520 --> 00:17:20.280 what we're repairing what we're replacing when we're doing that type of 00:17:20.280 --> 00:17:23.880 work and the condition of those assets. And then Stephen Moore, the Senior 00:17:23.880 --> 00:17:30.000 Engineer, is really focused on our development review. FTE summary in 00:17:30.000 --> 00:17:38.000 2019-20 there was 110.5 FTEs and 2020 to 2021 that number was reduced to 00:17:38.000 --> 00:17:45.360 104.5 and in 2020 moving forward in 2021-2022 that number goes up to 00:17:45.360 --> 00:17:50.640 106.5. Now those aren't new FTEs being added to the department. We're actually 00:17:50.640 --> 00:17:54.760 it's moving some movement around within the organization. Three positions were 00:17:54.760 --> 00:17:59.120 moved from solid waste over to sustainability. One position was moved 00:17:59.120 --> 00:18:03.680 from sustainability over to parks and then there was an internal move from our 00:18:03.680 --> 00:18:11.300 distribution HBU up into the administrative HBU. What's the situation 00:18:11.300 --> 00:18:16.400 with the utilities administration? I didn't understand that. We eliminated or at 00:18:16.400 --> 00:18:20.480 least they're out of your excuse me out of your budget. You've got utilities 00:18:20.480 --> 00:18:25.320 administration you had 9.5 in 19-20 and then after that you have nothing. Yeah 00:18:25.320 --> 00:18:29.480 there I believe there was a restructure that was it was a pre-stephen gay I'll 00:18:29.480 --> 00:18:36.440 turn that over sure sure yeah chair in fiscal year 2021 utility administration 00:18:36.440 --> 00:18:38.880 actually combined with water administration okay that's the reason 00:18:38.880 --> 00:18:43.480 you say going away just transfers okay member Ryback had a question I believe 00:18:43.480 --> 00:18:49.520 yes sir mr. chairman I am wondering I understand the functions of the other 00:18:49.520 --> 00:18:55.120 folks listed such as the administration and the meter reading what exactly do 00:18:55.120 --> 00:19:06.560 the sustainability folks do in the water department mr. burner good morning 00:19:06.560 --> 00:19:13.440 Brian burner director of solid waste apologize the our Katherine Barnett 00:19:13.440 --> 00:19:18.760 white is out of the office today due to a family funeral but to answer that 00:19:18.760 --> 00:19:23.320 question they are responsible for managing this city of didn't simply 00:19:23.320 --> 00:19:27.360 sustainable plans so they work closely with the community and interested groups 00:19:27.360 --> 00:19:33.520 on reducing water consumption conservation environmental protection 00:19:33.520 --> 00:19:39.520 things of that nature so it's important from the management of the upstream the 00:19:39.520 --> 00:19:43.440 watersheds ensuring that the right water quality and then downstream ensuring 00:19:43.440 --> 00:19:47.240 that consumption is minimized so that we can maximize the benefit to our growing 00:19:47.240 --> 00:19:53.720 city so may I presume that this full-time equivalents are for the 00:19:53.720 --> 00:19:59.840 entire utility apartment and not just for the water department there are as 00:19:59.840 --> 00:20:04.520 Stephen had pointed out city a solid waste department does have three public 00:20:04.520 --> 00:20:08.720 education and outreach that are assigned specifically to doing the outreach for 00:20:08.720 --> 00:20:13.360 sustained for our solid waste group but there was also within the 00:20:13.360 --> 00:20:19.240 sustainability piece there are folks that specifically do water outreach and 00:20:19.240 --> 00:20:25.000 water conservation type of work so even though that we each transfer funds into 00:20:25.000 --> 00:20:29.840 it to support their efforts it's almost a dotted line relationship to the work 00:20:29.840 --> 00:20:35.800 that they do between the departments okay so these these five point five 00:20:35.800 --> 00:20:40.040 full-time equivalents are assigned to the water department not to the utility 00:20:40.040 --> 00:20:45.480 department overall they're assigned to sustainability or environmental services 00:20:45.480 --> 00:20:51.200 through the sustainability group but they work it's they're not within the 00:20:51.200 --> 00:21:02.880 water but they help fund them okay so there's transfers that take care of the 00:21:02.880 --> 00:21:06.160 time they spend with the different utilities correct okay correct is that 00:21:06.160 --> 00:21:11.880 basically what you're looking for Lee I think so yeah these are not general 00:21:11.880 --> 00:21:16.160 funded positions they are funded through the enterprises in the utilities so so 00:21:16.160 --> 00:21:21.040 mr. chair so I guess try to answer the question here so traditionally 00:21:21.040 --> 00:21:24.560 sustainability has been in water because they reported to the director of water 00:21:24.560 --> 00:21:30.200 so rather than have a separate standalone internal service fund this is just 00:21:30.200 --> 00:21:34.200 traditionally the way that it's where it's been budgeted currently this group 00:21:34.200 --> 00:21:39.040 actually reports to Brian Borner the director of solid waste and I think we 00:21:39.040 --> 00:21:42.040 just made the decision just to leave it where it is just because traditionally 00:21:42.040 --> 00:21:46.080 that's where it's been but again the cost and the services they provide cut 00:21:46.080 --> 00:21:49.680 across the various utilities and there's funding sources that come into this fund 00:21:49.680 --> 00:21:53.080 to offset those costs so that the water fund and the rates don't necessarily 00:21:53.080 --> 00:22:00.320 bear the full burden of that particular division okay so if I can just boil it 00:22:00.320 --> 00:22:04.520 down for myself here in simplicity sake there are certain full-time equivalents 00:22:04.520 --> 00:22:10.200 assigned to each department for the sustainability function is that more 00:22:10.200 --> 00:22:15.440 or less correct more or less that is correct okay thank you that's all just 00:22:15.440 --> 00:22:21.120 it caught my eye there thank you no worries thank you 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 00:22:30.960 --> 00:22:33.400 where we were 00:22:46.440 --> 00:22:57.320 one second so moving forward talking about our areas focus areas and status 00:22:57.320 --> 00:23:01.400 updates major maintenance the focus areas are major maintenance if the 00:23:01.400 --> 00:23:05.320 structure improvements and new technology with regards to major 00:23:05.320 --> 00:23:08.520 maintenance upgrades to Lake Louisville water treatment plant they'll be 00:23:08.520 --> 00:23:12.680 completed this year and those are focused on some pump rehabilitations some yard 00:23:12.680 --> 00:23:17.680 piping and some electrical work raw water condition assessment that's a 27 00:23:17.680 --> 00:23:22.880 inch raw water line to Lake Louisville that's been completed and at this point 00:23:22.880 --> 00:23:28.160 there's been no no issues of concern identified but we're still waiting for 00:23:28.160 --> 00:23:32.960 the final report on the for the robotic inspection infrastructure 00:23:32.960 --> 00:23:36.920 improvements the Lake Ray Roberts and a water treatment plant capacity rerate 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 00:23:42.280 --> 00:23:45.880 26 million gallons a day that's under design you'll hear a little hear a 00:23:45.880 --> 00:23:49.920 little bit more about that later on in the presentation northwest booster pump 00:23:49.920 --> 00:23:54.680 station and transmission line the design has been complete and the north west 00:23:54.680 --> 00:23:59.480 north-south water pipeline I-35 to scripture is under construction with 00:23:59.480 --> 00:24:04.800 regards to technology we're currently evaluating there's assessment being 00:24:04.800 --> 00:24:09.760 conducted currently to evaluate the need to transition our metering platform from 00:24:09.760 --> 00:24:14.440 its current platform which is an automated meter reading system to an 00:24:14.440 --> 00:24:21.040 advanced meter reading infrastructure this man regarding the Lake Ray Roberts 00:24:21.040 --> 00:24:28.360 water treatment plant capacity what does rewrite mean rerate is to we have to 00:24:28.360 --> 00:24:32.960 apply to the states we make improvements at the plant that improve the capacity 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 00:24:37.320 --> 00:24:41.720 because it's so the state determines how much capacity the plant is allowed to 00:24:41.720 --> 00:24:47.960 produce so that's what the rerate means okay thank you thank you 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 00:25:18.920 --> 00:25:24.960 Ray Roberts treatment plant project again rerating it from 28 million gallons a 00:25:24.960 --> 00:25:28.880 day to 26 million gallons a day complete the construction of the northwest water 00:25:28.880 --> 00:25:35.960 pipeline I-35 to scripture relocate the water lines along I-35 as part of the 00:25:35.960 --> 00:25:40.640 tech stops project complete the construction of the northwest booster 00:25:40.640 --> 00:25:44.840 pump station and transmission line revise our emergency response plan 00:25:44.840 --> 00:25:49.200 response recovery plan based off of the most recent winter storm I believe house 00:25:49.200 --> 00:25:54.520 bill 2 required us to to look more closely at backup power generation and 00:25:54.520 --> 00:26:00.200 dual feeds to our facilities survey the distribution system to identify the lead 00:26:00.200 --> 00:26:04.160 service lines in compliance with the lead and copper rule implement the 00:26:04.160 --> 00:26:09.600 recommendations if any from the advanced metering infrastructure study and then 00:26:09.600 --> 00:26:14.320 develop an asset management program for our vertical infrastructure again the 00:26:14.320 --> 00:26:18.680 vertical infrastructure is that those plants booster pump stations lift 00:26:18.680 --> 00:26:27.920 stations so some some operational data this is the 2020 2021 production and so 00:26:27.920 --> 00:26:31.400 if you can see we got highlighted right there in February we had a slight uptick 00:26:31.400 --> 00:26:36.600 in demand on the system from the tropical storm you can see that it looks 00:26:36.600 --> 00:26:41.160 like you know demands are tapering off in May that's primarily due to wet 00:26:41.160 --> 00:26:45.360 weather I just checked with our superintendent over water treatment this 00:26:45.360 --> 00:26:52.400 morning and from the end of May to to current we're right about 630 million 00:26:52.400 --> 00:26:56.400 gallons of production so we're back up in alignment with what we should be so 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 00:27:03.160 --> 00:27:08.440 the max daily water demand in the system the light blue line represents the 00:27:08.440 --> 00:27:13.080 demand system wide and that's based off of it's a very conservative estimate 00:27:13.080 --> 00:27:19.560 looking at our demand plus the impacts of a drought without any conservation 00:27:19.560 --> 00:27:24.720 measures the dark blue line represents the growth and additional capacity 00:27:24.720 --> 00:27:29.540 needed the dashed black line shows our current capacity between both Ray 00:27:29.540 --> 00:27:32.960 Roberts and Lake Louisville and then remember we talked earlier about that 00:27:32.960 --> 00:27:38.880 rerate project over at Ray Roberts that one we looked at we're expecting to 00:27:38.880 --> 00:27:43.060 complete construction in 2022 which will increase that capacity and that's what 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 00:27:47.680 --> 00:27:54.760 expected growth so some other operation operational information regarding our 00:27:54.760 --> 00:27:58.520 major maintenance hydrant flushing and meter replacement or two matrix that we 00:27:58.520 --> 00:28:07.000 look at we in 2019 we flushed roughly 10,000 hydrants roughly 11,000 year to 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 00:28:13.680 --> 00:28:18.240 and that's more for water quality to remove sediments from the lines and our 00:28:18.240 --> 00:28:24.600 goal for 2021 is 9,000 hydrants meter replacement this again this is an effort 00:28:24.600 --> 00:28:29.200 to ensure meter accuracy to replace the ones that are failing in the system in 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 00:28:38.760 --> 00:28:43.560 about 1,500 meters the asterisk in our projections for next year is going to 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 00:28:47.560 --> 00:28:53.440 recommendation to replace the platform so that will influence those numbers 00:28:54.760 --> 00:28:59.920 another another matrix we look at is the replacement of our infrastructure so we 00:28:59.920 --> 00:29:04.680 have in-house crews that do water line replacement and we have capital projects 00:29:04.680 --> 00:29:09.200 that deliver projects for us for the horizontal infrastructure that sets the 00:29:09.200 --> 00:29:15.640 water lines and the valves in 2019 the organization made a very strategic move 00:29:15.640 --> 00:29:23.480 to align the replacement of the water infrastructure with our street 00:29:23.480 --> 00:29:28.240 rehabilitation bond program and the capital team has been leading that 00:29:28.240 --> 00:29:32.200 effort and if you can look at the numbers just across the bottom in 18 to 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 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 00:29:44.200 --> 00:29:48.240 next year is 41,000 linear feet and that's primarily due to that that 00:29:48.240 --> 00:29:54.000 realignment of efforts and I think with that piece I'm done with the operational 00:29:54.000 --> 00:29:57.480 pieces and all but I'll still be hanging around so we have the wastewater budget 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 00:30:06.760 --> 00:30:09.600 to say Steven and his team's been great putting this budget together so doing a 00:30:09.600 --> 00:30:14.360 great job there I definitely appreciate their work so the financial assumptions 00:30:14.360 --> 00:30:16.880 really quick want to review these to everybody before we get started looking 00:30:16.880 --> 00:30:21.120 at the pro forma and the revenue we do have a 2% growth forecasting out years 00:30:21.120 --> 00:30:25.680 for our volume forecast that Stephen had reviewed with you shortly ago and the 00:30:25.680 --> 00:30:30.720 hunter coal ranch rate revenue is included starting in fiscal year 2023 00:30:30.720 --> 00:30:35.920 there's a 2% again we are continuing to utilize impact fee funding to revenue 00:30:35.920 --> 00:30:39.440 fund eligible projects I realize a couple of the board members may not have 00:30:39.440 --> 00:30:42.440 been here last year and we talked about this so I'll definitely review it with 00:30:42.440 --> 00:30:46.640 you here shortly and the forecast does include the hunter coal ranch development 00:30:46.640 --> 00:30:50.480 starting in fiscal year 2023 this is consistent across each of the utilities 00:30:50.480 --> 00:30:54.920 but we did want to bring this to your attention and then a 3% growth and 00:30:54.920 --> 00:31:01.560 forecasted and expenses in the out years this is the detailed revenue by 00:31:01.560 --> 00:31:06.160 operational area so you can see residential water cells at the top line 00:31:06.160 --> 00:31:11.280 second commercial water cells and you see water for resale and so let me walk 00:31:11.280 --> 00:31:15.160 you through this really quick 2021 is the current fiscal year we're in this 00:31:15.160 --> 00:31:19.060 will run through September 30th of this year and you can see we had budgeted 00:31:19.060 --> 00:31:23.560 revenue of 49 million we are forecasting that to come in a little bit below 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 00:31:26.800 --> 00:31:31.200 utility or you know in rainfall so the water utility is forecast a little bit 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 00:31:35.120 --> 00:31:38.120 little bit more planned use of reserves that we're planning on this year than 00:31:38.120 --> 00:31:43.800 originally budgeted for in 2022 you can see we have planned revenues of 00:31:43.800 --> 00:31:51.640 52.2 million expenses by category so all the expenses within the utility there's 00:31:51.640 --> 00:31:55.640 a vast number of object codes we budget for object codes could be anything from 00:31:55.640 --> 00:32:01.600 public safety you know equipment PPE it could be office supplies we roll those 00:32:01.600 --> 00:32:05.640 up into those these categories as to starting at the top you can see we have 00:32:05.640 --> 00:32:09.600 personal services we go down to materials and supplies maintenance and 00:32:09.600 --> 00:32:13.240 repair insurance and miscellaneous a little bit of return on investment and 00:32:13.240 --> 00:32:17.080 franchise fees and then moving down the page you can see some supplemental 00:32:17.080 --> 00:32:21.480 packages that are being requested this year so in fiscal year 2022 the 00:32:21.480 --> 00:32:26.120 preliminary budget has 51.5 million expenses and supplemental packages are 00:32:26.120 --> 00:32:29.520 simply those new requests those new initiatives the department's looking to 00:32:29.520 --> 00:32:32.840 do this upcoming fiscal year we'll review those with you shortly if you've 00:32:32.840 --> 00:32:38.640 got detailed questions Stephen can definitely address those for you this is 00:32:38.640 --> 00:32:43.540 the expenses by operational area so you can see water administration and you 00:32:43.540 --> 00:32:47.040 can see utility administration to mr. Rodback's question of that one going 00:32:47.040 --> 00:32:51.720 away in fiscal year 2021 it was combined with admin and you can see 00:32:51.720 --> 00:32:55.620 sustainability and there were a few questions on that earlier production 00:32:55.620 --> 00:32:59.640 distribution metering lab and total expenses for the preliminary budget 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 00:33:06.480 --> 00:33:09.520 forecast I'm gonna spend a little bit of time on this slide just really walk 00:33:09.520 --> 00:33:13.320 through it and give you as much detail as possible and answer any questions that 00:33:13.320 --> 00:33:16.120 you may have once we get through the presentation if I need to pull this back 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 00:33:20.800 --> 00:33:25.040 here in this column and you can see that 49 million in revenues that I reviewed 00:33:25.040 --> 00:33:30.680 reviewed with you on the previous slide and expenses of 52.9 million so the 00:33:30.680 --> 00:33:36.000 adopted budget did have 3.9 million in reserve usage adopted by both the PDB and 00:33:36.000 --> 00:33:41.520 City Council this year we are forecasting about 48.7 million in 00:33:41.520 --> 00:33:45.760 revenues this coming year so a little bit less in revenue due to some of this 00:33:45.760 --> 00:33:49.000 recent wet weather that we're experiencing and you can see end of your 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 00:33:54.760 --> 00:33:58.160 fully intend to monitor this as we progress through the summer we 00:33:58.160 --> 00:34:02.840 definitely are bringing an update this fall or next spring for this utility so 00:34:02.840 --> 00:34:06.800 the preliminary fiscal year 2022 budget is in this column right here that I'm 00:34:06.800 --> 00:34:13.480 pointing to we have 52.2 million in revenue and 51.5 million in expenses and 00:34:13.480 --> 00:34:17.000 you can see five hundred thirty one thousand in supplemental packages that 00:34:17.000 --> 00:34:23.040 are included on this line for total expenses of 51.5 that I mentioned so we 00:34:23.040 --> 00:34:27.560 do have a surplus or a positive revenue of six hundred eighty six thousand this 00:34:27.560 --> 00:34:31.880 coming fiscal year in the preliminary budget moving down the page we talked 00:34:31.880 --> 00:34:35.200 about this in April a little bit but you can see the reserve requirement the 00:34:35.200 --> 00:34:40.600 current reserve both in this utility so in the blue is the current reserve that 00:34:40.600 --> 00:34:44.840 we have from an operating standpoint so you can see in the preliminary budget we 00:34:44.840 --> 00:34:49.640 have 20.2 million in reserves with that target that we're not recommended to 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 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 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 00:35:05.840 --> 00:35:11.400 do show some net income out here starting in fiscal year 24 through 2027 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 00:35:18.040 --> 00:35:22.680 us fund that debt service that new plan expansion coming on so many PB members 00:35:22.680 --> 00:35:26.200 know we do have a large capital expense about 90 million plugged into the 00:35:26.200 --> 00:35:30.720 pro forma starting in fiscal year 2026 that debt service will actually start 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 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 00:35:42.200 --> 00:35:46.600 and our full intention is to build that fund balance up to help offset that debt 00:35:46.600 --> 00:35:51.320 moving down the page a little bit more we do have an impact fee capital reserve 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 00:35:55.400 --> 00:36:00.920 2024 our intention is to take 9 million out of the impact fee reserve and cash 00:36:00.920 --> 00:36:05.360 fund the design of that lake facility so really trying to minimize that debt 00:36:05.360 --> 00:36:11.400 issuance for that plan expansion the plan development lines and the impact 00:36:11.400 --> 00:36:16.120 fee reserve those are just result revolving lines that we carry forward for 00:36:16.120 --> 00:36:21.040 different developments and may come in the community let me see if there's 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 00:36:25.840 --> 00:36:31.320 first questions would be happy to answer them in a little bit this is the 00:36:31.320 --> 00:36:35.240 preliminary five-year capital plan for the water utility so what we've done is 00:36:35.240 --> 00:36:38.640 we've summarized it by different debt issuance or revenue funding for this 00:36:38.640 --> 00:36:43.480 utility so in fiscal year 2022 we have 41 million planned in debt issuance you 00:36:43.480 --> 00:36:47.640 can see that number right here in this column revenue funding so this is funded 00:36:47.640 --> 00:36:52.500 by that rate revenue that we charge our customers for operating 9.9 million of 00:36:52.500 --> 00:36:56.640 revenue funding we had some aid in construction impact fee funding so at 00:36:56.640 --> 00:37:01.360 3.5 million that you see there that is revenue funding eligible projects and 00:37:01.360 --> 00:37:05.160 those projects were called out in a study that we completed in 2019 and 00:37:05.160 --> 00:37:09.480 their growth related and what that does is that allows us to minimize the amount 00:37:09.480 --> 00:37:12.280 of debt we're issuing for those projects we're really trying to focus on cash 00:37:12.280 --> 00:37:16.440 funding any projects that we possibly can and you've seen some vehicle 00:37:16.440 --> 00:37:21.240 replacement of 309,000 for a total capital plan of 55 million one thing I 00:37:21.240 --> 00:37:24.360 will say this year we are doing the capital plan a little bit differently to 00:37:24.360 --> 00:37:27.560 make sure that we are cohesive across the city that we are communicating we 00:37:27.560 --> 00:37:31.200 actually have an internal department meetings with engineering water 00:37:31.200 --> 00:37:34.740 wastewater electric to make sure for budgeting for a field service 00:37:34.740 --> 00:37:38.800 replacement job in the water utility the streets department knows about it just 00:37:38.800 --> 00:37:42.160 to make sure it's consistent across the city so those conversations are ongoing 00:37:42.160 --> 00:37:45.840 this budget could change slightly based on those conversations but I just want 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 00:37:52.880 --> 00:37:58.240 aid in construction it seems like it's a grant sort of aid in construction is 00:37:58.240 --> 00:38:01.840 simply contributions we get so from developments that come into the 00:38:01.840 --> 00:38:05.600 community that may install waterline we get that revenue this is gives us the 00:38:05.600 --> 00:38:09.740 mechanism to expense that so it's separate from the impact fees that is 00:38:09.740 --> 00:38:13.000 correct it is separate from the impact fees it's actually revenue funding 00:38:13.000 --> 00:38:20.320 revenue received from developments yeah what we want to do this is not an 00:38:20.320 --> 00:38:23.320 extensive list of all the projects that the public utility board like to see it 00:38:23.320 --> 00:38:26.760 will be happy to provide it this is the major projects these make up thirty eight 00:38:26.760 --> 00:38:30.600 point five million of the capital plan this coming fiscal year and you can see 00:38:30.600 --> 00:38:34.440 the Northwest transmission lines which is fourteen point nine million the 00:38:34.440 --> 00:38:37.280 Ray Roberts capacity rerate and performance upgrades at Stephen 00:38:37.280 --> 00:38:41.640 emission earlier of 11 million we have Elman Locust of four million and then 00:38:41.640 --> 00:38:45.280 the annual field service replacements of two point eight million these are the 00:38:45.280 --> 00:38:48.080 ones I mentioned earlier really important we do those cross-departmental 00:38:48.080 --> 00:38:53.560 meetings to make sure that we have a consistent capital plan across the city 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 00:39:00.840 --> 00:39:04.080 those cash flows one one other thing we did in the capital plan this year is 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 00:39:08.680 --> 00:39:12.360 of different projects the main reason for this exercise is to make sure we're 00:39:12.360 --> 00:39:17.800 not issuing debt early or earlier than it's needed so this is really a good 00:39:17.800 --> 00:39:22.120 exercise we did this year with the apartment so you can see for example you 00:39:22.120 --> 00:39:25.160 know fiscal year 2021 for the booster pump station they only needed a million 00:39:25.160 --> 00:39:28.760 dollars we could delay issuing that additional nine point four or five 00:39:28.760 --> 00:39:34.000 million till 2022 so really looking at those projects in time and amount from a 00:39:34.000 --> 00:39:39.480 cash flow perspective this gets into the budget request these are supplemental 00:39:39.480 --> 00:39:43.480 packages that I mentioned earlier serves four hundred thirteen thousand five 00:39:43.480 --> 00:39:46.960 hundred dollars worth of supplemental packages you can see anything from system 00:39:46.960 --> 00:39:52.240 repair materials of twenty five thousand the major ones being those line location 00:39:52.240 --> 00:39:55.960 for a hundred and fifty thousand and then the street rehab for two hundred 00:39:55.960 --> 00:39:59.240 thousand and when it says streets workload what that is that's to hire a 00:39:59.240 --> 00:40:03.600 contractor to come out and help us and do the street cuts repair the the street 00:40:03.600 --> 00:40:07.800 where we fix those water lines and the street department is extremely busy on 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 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 00:40:18.240 --> 00:40:24.200 top the pavement portion of the two to four foot of whatever your cut is right 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 00:40:29.560 --> 00:40:32.480 the field service replacements or the water line itself or budgeted for in the 00:40:32.480 --> 00:40:36.040 annual filter replacement this would go to our contract we help us repair those 00:40:36.040 --> 00:40:46.120 patches actually sure I think I got through here let me scroll the bottom of 00:40:46.120 --> 00:40:48.240 it 00:40:48.240 --> 00:40:54.600 the calendar so this is in each presentation we do not have to review 00:40:54.600 --> 00:40:59.000 the calendar in detail in each of them we definitely want to give you a glimpse 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 00:41:02.360 --> 00:41:09.280 budget so June 28th of course today we're doing the presentation July 12th we have 00:41:09.280 --> 00:41:13.040 a conversation coming up with a PB will also include a rate discussion so to 00:41:13.040 --> 00:41:16.600 mr. Rob backs question earlier regarding the rate structure that presentation 00:41:16.600 --> 00:41:21.440 will include some considerations for the PB to consider in this upcoming fiscal 00:41:21.440 --> 00:41:28.000 year on July 20th we have the DME City Council presentation July 27th water 00:41:28.000 --> 00:41:34.120 wastewater is always will go forward to City Council but then July 26 at the PB 00:41:34.120 --> 00:41:38.120 and rate approval and then we get into that proposed budget being presented 00:41:38.120 --> 00:41:42.280 it's actually August the 2nd not August the 3rd apologize that that error but 00:41:42.280 --> 00:41:47.120 it's actually August the 2nd is the City Council budget work session so budgeted 00:41:47.120 --> 00:41:53.360 option will be September 21st and then I'll take it down for questions for 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 00:42:01.600 --> 00:42:08.320 that City Council workshop you mentioned on the schedule mr. Robert currently 00:42:08.320 --> 00:42:13.600 and this the PB historically has not participated in the budget workshop 00:42:13.600 --> 00:42:17.760 annually you know if you'd like to have a joint meeting with City Council we 00:42:17.760 --> 00:42:20.680 could talk about that but the budget workshop itself at the beginning of 00:42:20.680 --> 00:42:24.640 August the Public Utility Board is historically not been included oh my 00:42:24.640 --> 00:42:27.920 question is purely informational since I'm one of the newer members of the 00:42:27.920 --> 00:42:35.080 board thank you I just had a quick question about the the bond debt can you 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 00:42:41.600 --> 00:42:45.160 City Council only adopts the first year of the budget so this year you'll adopt 00:42:45.160 --> 00:42:49.240 the fiscal year 2022 budget you'll give us authority for the operating budget 00:42:49.240 --> 00:42:54.920 the capital plan for this year okay not adopt future bond issuances those are 00:42:54.920 --> 00:43:00.760 just potential that's planned that's our planning purposes right to the plan we 00:43:00.760 --> 00:43:04.520 what we're looking to do is plan future rate increases if we need them looking 00:43:04.520 --> 00:43:08.320 at the holistic picture of ten years and looking at that capital plan it helps us 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 00:43:13.240 --> 00:43:21.520 really a ten-year I think I was surprised that in a lot of these 00:43:21.520 --> 00:43:27.640 presentations the bond debt was equal to the production expenses worse or so and 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 00:43:31.780 --> 00:43:37.200 future in which we're not depending so much on debt so absolutely yeah 00:43:37.200 --> 00:43:40.680 absolutely and we look at that every year and yeah and you bring up a great 00:43:40.680 --> 00:43:44.700 point that that is the focus of the utilities is to try to maximize the 00:43:44.700 --> 00:43:47.800 revenue funding as much as possible without putting an undue burden on the 00:43:47.800 --> 00:43:51.680 ratepayers and minimize that debt issuance and it helps us you know 00:43:51.680 --> 00:43:54.800 minimize that debt payment over a ten-year period in doing that and I 00:43:54.800 --> 00:43:58.880 think that was one of the main reasons for starting to use impact fees to 00:43:58.880 --> 00:44:03.720 revenue from projects was to delay that bond issue and so absolutely okay thank 00:44:03.720 --> 00:44:13.140 you any other questions for Nick this item then chair if I may if we could 00:44:13.140 --> 00:44:16.520 move environmental services up David Gaines the assistant city managers here 00:44:16.520 --> 00:44:19.720 to give that presentation and then maybe we'll flip to wastewater after that if 00:44:19.720 --> 00:44:25.520 that's okay with everybody okay any problem with that at all 00:44:25.520 --> 00:44:32.160 good morning David Gaines assistant city manager I know there was some 00:44:32.160 --> 00:44:36.120 discussion on environmental services as we went through the water presentation 00:44:36.120 --> 00:44:41.160 understandably so wanted to just pull this a brief presentation that we have 00:44:41.160 --> 00:44:46.000 regarding environmental services up and really from my perspective just talk a 00:44:46.000 --> 00:44:49.760 little bit about what the changes were making with environmental services so I'm 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 00:44:53.120 --> 00:44:56.560 and we obviously have staff here to answer any specific questions that you 00:44:56.560 --> 00:45:01.120 have so what what what we're doing with environmental services is fairly 00:45:01.120 --> 00:45:05.320 straightforward we are taking all the positions and the divisions that 00:45:05.320 --> 00:45:08.240 currently exist 00:45:08.240 --> 00:45:28.640 so we're taking all the oppositions in a vision that currently exists both in 00:45:28.640 --> 00:45:33.160 solid waste and water water houses our environmental services team right now and 00:45:33.160 --> 00:45:38.200 solid waste houses our sustainability team and combining those into one group 00:45:38.200 --> 00:45:42.520 and then we're going to hire a an environmental services director so 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 00:45:46.320 --> 00:45:50.640 services assistant director and obviously our sustainability group 00:45:50.640 --> 00:45:55.040 really the purpose of doing this of combining the groups first those 00:45:55.040 --> 00:45:57.920 divisions have a lot of synergies they all work they work together very well 00:45:57.920 --> 00:46:02.800 but also having a position coming at the director level to to head our 00:46:02.800 --> 00:46:07.360 environmental services team is important for the city right now given where we 00:46:07.360 --> 00:46:11.320 are given the focus on environmental issues as we move forward so this has 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 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 00:46:19.220 --> 00:46:23.160 taking and placing that emphasis by getting a director level position I 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 00:46:27.600 --> 00:46:30.680 environmental services but also with water wastewater that he wore a lot of 00:46:30.680 --> 00:46:35.360 different hats this makes a lot of sense to create a separate division and it 00:46:35.360 --> 00:46:39.480 also gives some of that accountability to the water group I think it's worth 00:46:39.480 --> 00:46:43.520 great having environmental services in water from the pretreatment the 00:46:43.520 --> 00:46:49.160 laboratory and down to the the watershed as well but having that as a separate 00:46:49.160 --> 00:46:53.480 division does add something because a lot of what they're doing right is 00:46:53.480 --> 00:46:58.280 checking what water and wastewater do so that that works out very well but 00:46:58.280 --> 00:47:02.800 obviously there's going to be one of the priorities as we go forward and hiring 00:47:02.800 --> 00:47:06.440 that position is that they can work across the organization with all of our 00:47:06.440 --> 00:47:11.000 utilities and throughout the city so that's the purpose of making that change 00:47:11.000 --> 00:47:16.240 as far as from a fund perspective these will be housed in the water fund similar 00:47:16.240 --> 00:47:20.040 to how drainage is housed in the wastewater fund it'll just be a section 00:47:20.040 --> 00:47:24.600 of the water fund from a funding perspective but be a separate HBU but it 00:47:24.600 --> 00:47:28.640 does mean those positions are moving from solid waste over to those in the 00:47:28.640 --> 00:47:33.240 solid waste fund over to the water fund and there'll be appropriate transfers to 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 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 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 00:47:45.080 --> 00:47:51.400 questions on the detail so here you can see all those positions that I mentioned 00:47:51.400 --> 00:47:56.360 grouped together it's total of 33 positions we are moving and you kind of 00:47:56.360 --> 00:48:00.080 see the asterisk there in sustainability there's one position that works with 00:48:00.080 --> 00:48:03.680 parks that's been in the sustainability group or we're just simply moving that 00:48:03.680 --> 00:48:12.120 FTE out of parks as that's the appropriate placement of the FTE and I 00:48:12.120 --> 00:48:16.580 high level some of those accomplishments from each of those groups sustainability 00:48:16.580 --> 00:48:20.640 some very significant accomplishments a lot of work over the past year and 00:48:20.640 --> 00:48:25.200 adopting the simply sustainability framework and then establishing that new 00:48:25.200 --> 00:48:29.960 committee for implementation and then you see the last bullet point there just 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 00:48:34.320 --> 00:48:39.920 the comprehensive solid waste management plan environmental services again some 00:48:39.920 --> 00:48:45.680 big ticket items over the past year with the TCEQ industrial pretreatment 00:48:45.680 --> 00:48:49.920 streamlining and then obviously we've had a number of conversations on the 00:48:49.920 --> 00:48:53.760 mosquito surveillance response plan as well so a lot that's been done over the 00:48:53.760 --> 00:49:00.400 past year some of the goals for the groups heading into the next year 00:49:00.400 --> 00:49:04.480 implementation of that frame of the sustainability framework for sure will 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 00:49:10.960 --> 00:49:15.760 reduce recycling contamination to the community assessing the community 00:49:15.760 --> 00:49:20.160 hazards and vulnerabilities on environmental services we're continuing 00:49:20.160 --> 00:49:24.440 to expand those programs and cross-chain training with our watershed 00:49:24.440 --> 00:49:29.900 protection gas well inspection staff and pretreatment obviously as we look to 00:49:29.900 --> 00:49:33.440 bring in a director over all these groups these will be priorities as we 00:49:33.440 --> 00:49:44.240 move into the next fiscal year budget highlights fairly straightforward here 00:49:44.240 --> 00:49:48.080 you can really the only change you see as we look into preliminary budget just 00:49:48.080 --> 00:49:54.080 from a financial standpoint is the sustainability group as we've lost that 00:49:54.080 --> 00:49:58.360 position though that positions moved over to parts I will also point out that 00:49:58.360 --> 00:50:02.840 the director position was able we were able to move positions around and use 00:50:02.840 --> 00:50:06.920 vacancy to create the director level position and that is reflected in those 00:50:06.920 --> 00:50:09.840 preliminary numbers 00:50:09.840 --> 00:50:17.480 budget requests there's only one budget request and that's for an additional FTE 00:50:17.480 --> 00:50:22.040 with our watershed group the stormwater inspector and this is really to meet our 00:50:22.040 --> 00:50:27.720 goal of the three-week inspections right now our time frame is more in the five 00:50:27.720 --> 00:50:32.480 week range of when those inspections get done so adding this FTE is with a pure 00:50:32.480 --> 00:50:37.040 intention of meeting the goal of three weeks that we have set out for stormwater 00:50:37.040 --> 00:50:42.600 inspections and that's it for the presentation I'll take the screen down 00:50:42.600 --> 00:50:46.800 and happy to answer any questions about the the change that we've made from a 00:50:46.800 --> 00:50:49.760 organizational structure and obviously we have staff available to answer any 00:50:49.760 --> 00:51:00.320 detailed questions on those goals or moving forward any questions no thank 00:51:00.320 --> 00:51:02.960 you all right thank you 00:51:30.320 --> 00:51:33.320 [Applause] 00:52:00.320 --> 00:52:18.080 it just proves you can be taught so for the wastewater business unit of water 00:52:18.080 --> 00:52:24.640 utilities department the budget overview this is the organizational chart we went 00:52:24.640 --> 00:52:30.280 through earlier with regards to the FTE summary David mentioned that new 00:52:30.280 --> 00:52:37.760 stormwater FTE for the inspections looking back at 2019 and 20 we had 21.5 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 00:52:47.680 --> 00:53:00.240 21 22 represents the two new positions moved in from from from solid waste major 00:53:00.240 --> 00:53:04.480 maintenance or our focus areas and status updates again major maintenance 00:53:04.480 --> 00:53:09.680 infrastructure improvements and improvements to planning with regards to 00:53:09.680 --> 00:53:13.840 major maintenance Hickory Creek old Alton lift station replacement is to be 00:53:13.840 --> 00:53:20.560 completed in 2021 Lakeview interceptor project is currently under design with 00:53:20.560 --> 00:53:24.320 regards to infrastructure improvements to the concrete water reclamation 00:53:24.320 --> 00:53:29.520 facility solids handling project phase one is under design Hickory Creek 00:53:29.520 --> 00:53:34.640 detention facility is under construction the Hickory Creek interceptor sewer phase 00:53:34.640 --> 00:53:38.600 one and phase two are currently under construction and with regards to 00:53:38.600 --> 00:53:42.760 improvements to planning I believe last week or the week before you approved the 00:53:42.760 --> 00:53:48.720 us moving forward with the wastewater master plan and that is in in progress 00:53:48.720 --> 00:53:54.240 for our goals for 21 22 we want to bid and mobilize the construction of the 00:53:54.240 --> 00:53:58.840 concrete plan expansion phase one complete construction of the Hickory 00:53:58.840 --> 00:54:02.760 Creek detention facility complete construction of the Hickory Creek 00:54:02.760 --> 00:54:08.320 interceptor sewer pipe phase one to bid and mobilize on the construction of 00:54:08.320 --> 00:54:12.920 Hickory Creek interceptor phase three and the dry fork interceptor project 00:54:12.920 --> 00:54:17.720 complete construction of ropes and ranch water main connection projects 00:54:17.720 --> 00:54:21.200 initiate the decommissioning of the ropes and ranch water treatment 00:54:21.200 --> 00:54:25.160 wastewater treatment facility and complete an update to the impact fee 00:54:25.160 --> 00:54:31.400 study like the this is very similar to that demand chart that I showed you on 00:54:31.400 --> 00:54:35.920 the water side but this is really driven by TCEQ so that's the Texas Commission 00:54:35.920 --> 00:54:41.840 on environmental quality the regulations clearly state that when a facility 00:54:41.840 --> 00:54:47.440 reaches 75% of its design capacity so the capacity that that facility was 00:54:47.440 --> 00:54:52.480 designed to treat we have to be we have to start designing a new our expansion 00:54:52.480 --> 00:54:57.920 the regulations also state that when we hit that 90% of design capacity the 00:54:57.920 --> 00:55:03.320 utility must be under construction of that expansion and so if you look in at 00:55:03.320 --> 00:55:08.960 this chart in 2021 we get that 75% capacity mark we're currently under 00:55:08.960 --> 00:55:14.960 design of the concrete improvements and we should we are on track to have will 00:55:14.960 --> 00:55:18.680 be under construction next year on those improvements so we're well ahead of 00:55:18.680 --> 00:55:25.240 schedule wastewater operational data major maintenance and linear feet so 00:55:25.240 --> 00:55:32.000 with the collection system we clean and inspect the system annually and quite an 00:55:32.000 --> 00:55:37.040 aggressive amount of linear footage 19 and 20 we got over a five hundred and 00:55:37.040 --> 00:55:42.880 almost six hundred thousand linear feet of collection system cleaned 131,000 00:55:42.880 --> 00:55:49.640 linear feet inspected we're on track for 2020 21 to complete the year with 120 00:55:49.640 --> 00:55:56.360 linear feet 120,000 linear feet of inspection and 675,000 linear feet of 00:55:56.360 --> 00:56:04.400 cleaning the goal for 21 22 is 120,000 linear feet of inspections and 675 linear 00:56:04.400 --> 00:56:11.280 feet of cleaning like on the water side that alignment with the capital team and 00:56:11.280 --> 00:56:16.200 the street rehabilitation program you can see the value in that that 00:56:16.200 --> 00:56:22.840 adjustment in these figures right here 19 we were only able to install roughly 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 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 00:56:37.540 --> 00:56:43.040 was really quickly and I'll turn it over to Nick thank you 00:56:43.040 --> 00:56:50.240 thank you Steve all right I'll walk us through the financials for wastewater so 00:56:50.240 --> 00:56:52.960 the financial assumptions I want to review each one of these with you but 00:56:52.960 --> 00:56:56.560 this is consistent between the water and wastewater utilities we do the two 00:56:56.560 --> 00:57:00.440 percent growth forecast in the out years for the volume forecast and that 100 00:57:00.440 --> 00:57:04.640 coal ranch development being included in fiscal year 2023 or starting in fiscal 00:57:04.640 --> 00:57:11.040 year 2023 and these are revenues by different operational areas so you can 00:57:11.040 --> 00:57:14.440 see very similar to water you have wastewater residential wastewater 00:57:14.440 --> 00:57:20.160 commercial wastewater wholesale and we have other wastewater revenue and then 00:57:20.160 --> 00:57:25.360 you have your cost of service transfers into this fund to recoup any charges or 00:57:25.360 --> 00:57:29.480 a cost associated with doing activities for other operational areas around the 00:57:29.480 --> 00:57:34.200 city we do have an impact fee transfer in a 4.2 million this upcoming fiscal 00:57:34.200 --> 00:57:37.720 year and very similar to water we are using a portion of that to revenue fund 00:57:37.720 --> 00:57:45.000 eligible projects these are expenses by categories and so as explained in water 00:57:45.000 --> 00:57:48.760 these are grouped based on the type of purchases they may be so you can see 00:57:48.760 --> 00:57:52.160 personnel expenses materials and supplies maintenance and repairs 00:57:52.160 --> 00:57:56.760 insurance miscellaneous and skipping out to the bottom you can see that some cost 00:57:56.760 --> 00:58:00.720 allocation transfers I'm going to the general fund other departments about the 00:58:00.720 --> 00:58:05.080 city and then the capital outlays that revenue funding of projects and this 00:58:05.080 --> 00:58:09.000 utility does have seven hundred eighty six thousand in supplemental packages or 00:58:09.000 --> 00:58:15.280 review those with you here shortly and then expenses by operational area so you 00:58:15.280 --> 00:58:18.640 can't see administration is going to zero it is important to note that this 00:58:18.640 --> 00:58:21.980 group was combined with water administration that we visited about 00:58:21.980 --> 00:58:28.120 earlier we have water reclamation horse collections filled services the drainage 00:58:28.120 --> 00:58:32.800 utility is included down here so for several public utility boards it may be 00:58:32.800 --> 00:58:37.240 new we do show drainage separately but ultimately it does roll up into the 00:58:37.240 --> 00:58:42.520 wastewater fund so we'll show you perform on drainage here shortly okay 00:58:42.520 --> 00:58:46.000 then total expenses of thirty seven point nine million in the wastewater 00:58:46.000 --> 00:58:51.320 utility you can see that number right down here so very similar to water this 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 00:58:55.120 --> 00:58:59.360 possible as slowly then we can take any questions that you have so fiscal year 00:58:59.360 --> 00:59:02.680 twenty twenty one you can see here we had thirty seven point two million or 00:59:02.680 --> 00:59:06.760 thirty seven point one in revenue we had thirty six point nine million in 00:59:06.760 --> 00:59:10.760 expenses so we didn't have a budget basically a balanced budget in fiscal 00:59:10.760 --> 00:59:13.880 year twenty twenty one finished near about two hundred ninety two thousand 00:59:13.880 --> 00:59:18.480 dollars positive we are forecasting to come in a little bit better this fiscal 00:59:18.480 --> 00:59:21.840 year based on our volume forecast our flows within the wastewater fund 00:59:21.840 --> 00:59:26.200 revenues about thirty seven point one million but those expenses coming in at 00:59:26.200 --> 00:59:31.080 thirty six point four so total revenue about seven hundred thousand with an 00:59:31.080 --> 00:59:36.860 ending fund balance you can see right in here fifteen point oh six the targets 00:59:36.860 --> 00:59:40.640 that we discussed in April the minimum being nine point nine and the maximum 00:59:40.640 --> 00:59:45.480 being thirteen point nine so actually above the higher end target for this 00:59:45.480 --> 00:59:49.760 upcoming or ending this fiscal year so great news for the wastewater department 00:59:49.760 --> 00:59:53.560 the preliminary twenty twenty two budget and you can see here in this column we 00:59:53.560 --> 00:59:57.920 have thirty eight point six million in revenues moving down to the expenses you 00:59:57.920 --> 01:00:02.200 saw on the previous slide the thirty seven point nine million finish in the 01:00:02.200 --> 01:00:07.080 year about six hundred fifty thousand dollars positive so about fifteen point seven million ending 01:00:07.080 --> 01:00:11.720 fund balance which is well within that reserve target that you see down here no 01:00:11.720 --> 01:00:15.760 forecasted rate increases very similar to water we're not forecasting rate 01:00:15.760 --> 01:00:19.880 increases this upcoming fiscal year I do want to point out in the future years you 01:00:19.880 --> 01:00:23.380 can see we do have some one percent rate increases plugged in starting in fiscal 01:00:23.380 --> 01:00:27.520 year twenty twenty nine in twenty thirty and the reason for that is to keep that 01:00:27.520 --> 01:00:33.520 reserve target above that minimum that minimum target in the future years as 01:00:33.520 --> 01:00:36.760 some of those planned expansion projects come on board that Stephen was talking 01:00:36.760 --> 01:00:41.240 about moving down the page a little bit more you can see we do have an 01:00:41.240 --> 01:00:45.840 impact fee reserve about nine point five million currently in that reserve for the 01:00:45.840 --> 01:00:50.400 wastewater utility and then we have a drainage reserve we do dedicate one 01:00:50.400 --> 01:00:55.440 million dollars to the drainage reserve you'll see that on the next pro forma 01:00:57.560 --> 01:01:01.420 so this is drainage broken out of the pro forma that you just saw so in 01:01:01.420 --> 01:01:04.520 fiscal year twenty twenty one the adopted budget that we're currently in 01:01:04.520 --> 01:01:08.640 total revenues of five point nine million with total expenses of five point 01:01:08.640 --> 01:01:12.520 nine the biggest majority of their budget has been on what we call channel 01:01:12.520 --> 01:01:17.120 rehab so maintaining those drainage ways around the city makes up the biggest 01:01:17.120 --> 01:01:20.920 portion of this budget so you can see they do plan their expenses to come in 01:01:20.920 --> 01:01:25.400 about five point three but the revenues being equal to the expenses of five point 01:01:25.400 --> 01:01:29.080 three what are you moving into the polymer do you think that number right 01:01:29.080 --> 01:01:35.000 there went down what what is it the inability to get construction projects 01:01:35.000 --> 01:01:39.920 going you think or yeah housing I don't think Daniel's here today or Danny 01:01:39.920 --> 01:01:43.720 Kramer but the majority of it is I think what with covid with some of the 01:01:43.720 --> 01:01:47.040 weather we've been having and getting some of those projects executed the 01:01:47.040 --> 01:01:52.000 numbers is coming in below budget it's trending below budget so you know there 01:01:52.000 --> 01:01:55.360 are future conversations to come with drainage in the capital plan when we do 01:01:55.360 --> 01:01:58.640 the citywide budget discussion for the the capital initiative I was talking 01:01:58.640 --> 01:02:02.600 about earlier part of that will be some drainage projects included and we can 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 01:02:06.760 --> 01:02:09.880 brief conversations I have with Danny that is the majority it's not a huge 01:02:09.880 --> 01:02:15.200 difference it just raise an eyebrow almost ten percent so yeah so if I can 01:02:15.200 --> 01:02:23.280 get this my presentation here okay so preliminary but we do have budgeted 01:02:23.280 --> 01:02:29.000 revenues of 5.6 million and then budgeted expenses of 5.6 for any PB 01:02:29.000 --> 01:02:32.600 members that may not know these drainage revenues are part of the 01:02:32.600 --> 01:02:36.240 wastewater fee schedule they're charged for impervious surfaces of different 01:02:36.240 --> 01:02:40.960 businesses in different properties around the city so just want to point 01:02:40.960 --> 01:02:44.000 that out that's how the drainage fund or the drainage department gets their 01:02:44.000 --> 01:02:55.960 revenues so the five-year capital plan very similar to water we do summarize 01:02:55.960 --> 01:02:59.880 it by different debt issuance or revenue funding so this upcoming fiscal year we 01:02:59.880 --> 01:03:04.560 got forty point one million in debt funded capital revenue funded projects 01:03:04.560 --> 01:03:10.880 about five million 80 construction 82,000 an impact fee funding of 250,000 01:03:10.880 --> 01:03:14.720 we don't have quite a few eligible projects is coming fiscal year in the 01:03:14.720 --> 01:03:19.520 wastewater utility as water is the reason that number is 250,000 instead of 01:03:19.520 --> 01:03:23.280 more so wanted to point that out for the public utility board and we did some 01:03:23.280 --> 01:03:27.880 vehicle replacements about 1.4 million so preliminary capital plan for fiscal 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 01:03:37.600 --> 01:03:43.600 yes sir what is the term aid in construction what that is that is 01:03:43.600 --> 01:03:47.200 contributions from different developments in the community to fund 01:03:47.200 --> 01:03:50.880 their part of a development or an infrastructure within wastewater what 01:03:50.880 --> 01:03:55.520 that mechanism does in the capital budget that gives us the tool from a 01:03:55.520 --> 01:03:59.720 budgeting standpoint to expense those funds for us to perform that work on 01:03:59.720 --> 01:04:03.600 their behalf that's that's what that represents understood thank you very 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 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 01:04:12.320 --> 01:04:15.960 in usually each fiscal year some fiscal year is not as much as others but 01:04:15.960 --> 01:04:29.360 typically it's pretty consistent major wastewater projects so these are 01:04:29.360 --> 01:04:32.920 included and in the pro forma and Stephen had mentioned several of these earlier 01:04:32.920 --> 01:04:37.640 the solids the solids handling project of 14 million the Hickory Creek wastewater 01:04:37.640 --> 01:04:42.480 treatment plant land acquisition of 5.8 million to name a few other large ones 01:04:42.480 --> 01:04:46.500 here we have the Hickory Creek interceptor 3 or phase 3 project of 4 01:04:46.500 --> 01:04:51.200 million and then we have the 2019 bond election to support those projects are 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 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 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 01:05:04.180 --> 01:05:07.240 glimpse of the major ones 01:05:07.240 --> 01:05:15.480 same thing here this table is just simply to mint the tele staff took an 01:05:15.480 --> 01:05:18.720 extra step this year in the last couple years for that matter from looking at a 01:05:18.720 --> 01:05:22.920 cash flow perspective of how much money we need and really not issuing that debt 01:05:22.920 --> 01:05:30.740 before it is needed so really lessening that burden to the ratepayers this is 01:05:30.740 --> 01:05:35.240 the supplemental package summary so in total that I mentioned earlier 701,000 01:05:35.240 --> 01:05:40.640 and the first one being the system repair materials for 250,000 is just 01:05:40.640 --> 01:05:44.200 simply material costs have gone up of last several months I'm sure people on 01:05:44.200 --> 01:05:49.320 this board are familiar with that the streets cut of 215,000 very similar to 01:05:49.320 --> 01:05:53.560 water this is the wastewater component of that and then we have the other line 01:05:53.560 --> 01:05:58.080 the other big one being here the line location just reallocating resources of 01:05:58.080 --> 01:06:03.040 150,000 if detailed questions on these Stevens here to address them but that's 01:06:03.040 --> 01:06:06.280 the summary of the supplemental package is being requested and all these are 01:06:06.280 --> 01:06:11.360 included in the pro forma with no no proposed rate increases this fiscal year 01:06:11.360 --> 01:06:15.720 the calendar again next conversation will come back forward to the public 01:06:15.720 --> 01:06:19.160 utility board the 1st of July or July the 12th which will include that rate 01:06:19.160 --> 01:06:24.040 discussion in response to that memo that you saw earlier from internal audit and 01:06:24.040 --> 01:06:30.960 I'll pull the presentation down for questions questions doesn't appear to 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 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 01:06:39.000 --> 01:06:49.640 minutes okay with everybody okay we're gonna reconvene it's 1016 I believe 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 01:06:57.480 --> 01:07:02.120 exciting budget budget presentations you will see all day so we'll go ahead and 01:07:02.120 --> 01:07:05.320 get started here 01:07:05.320 --> 01:07:14.520 let's start off by sharing a little bit about the department this is our 01:07:14.520 --> 01:07:18.480 leadership team I've got Eugene McKinney who is my deputy director Tammy 01:07:18.480 --> 01:07:23.000 Klausing who's with me today she is our business services manager James tip 01:07:23.000 --> 01:07:28.040 that's our administration manager I put Katherine Barnett on this she is not 01:07:28.040 --> 01:07:31.360 technically a member of our salt of the solid waste group she is in the 01:07:31.360 --> 01:07:35.840 environmental services team but she is really our right arm being outreach 01:07:35.840 --> 01:07:39.960 sustainability we support each other so closely from a functional standpoint 01:07:39.960 --> 01:07:43.880 it's important that we represent them in their contributions to the city and to 01:07:43.880 --> 01:07:48.600 the organization from a functional standpoint we we rely on each other 01:07:48.600 --> 01:07:52.720 organizationally administration site operations it supports collections 01:07:52.720 --> 01:07:56.200 business services we're all working together to ensure that we have the 01:07:56.200 --> 01:08:00.360 highest quality of service to the city of Denton's residents and business 01:08:00.360 --> 01:08:09.600 community from a personnel standpoint we started in 1920 with 123 folks mid-year 01:08:09.600 --> 01:08:15.080 this last year we actually added three positions a wellfield technicians to 01:08:15.080 --> 01:08:19.080 help us manage our landfill gas systems one that were in the process of 01:08:19.080 --> 01:08:29.000 converting from our DTE program into our high BTU landfill gas energy system in 01:08:29.000 --> 01:08:34.000 what you see in the in the 2021 is actually the loss of the three public 01:08:34.000 --> 01:08:37.480 service or public outreach folks in sustainability actually going to the 01:08:37.480 --> 01:08:42.040 sustainability department excuse me the environmental services department so 01:08:42.040 --> 01:08:46.680 again it's really a net zero across the board from a a carry forward 01:08:46.680 --> 01:08:50.840 standpoint as proposed from an operational standpoint want to share a 01:08:50.840 --> 01:08:54.880 few metrics about things that are happening within the department first and 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 01:08:57.960 --> 01:09:01.560 talking about safety safety is key in the solid waste industry we are the 01:09:01.560 --> 01:09:08.080 fifth most dangerous service sector to either work in or be related to I mean 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 01:09:10.920 --> 01:09:15.240 police and firefighter across America to be a solid waste worker so again it's 01:09:15.240 --> 01:09:21.360 important for us to put in programs and policies that help reduce our incidents 01:09:21.360 --> 01:09:25.920 of accidents and injuries and you'll see that in this year the first six months 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 01:09:31.800 --> 01:09:37.000 percent reduction in injuries what's interesting is that that reduction in 01:09:37.000 --> 01:09:42.600 industry in injuries is directly tied to are changing from the plastic bags that 01:09:42.600 --> 01:09:46.800 we were collecting yard waste into and having to tear open to a going to the 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 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 01:09:58.160 --> 01:10:02.960 that we look forward to expanding and carrying forward in the future when we 01:10:02.960 --> 01:10:06.880 look at growth growth is a four-letter word right now City of Denton sitting on 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 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 01:10:16.440 --> 01:10:20.440 COVID and that's with the shutdowns and everything else we're anticipating 01:10:20.440 --> 01:10:23.880 really about a two-and-a-half in reality anywhere between of about three and five 01:10:23.880 --> 01:10:28.960 percent home count growth in this year alone just people moving in and that's 01:10:28.960 --> 01:10:33.800 not counting the commercial sector that comes into support of these folks too so 01:10:33.800 --> 01:10:36.880 again growth is coming and we've got to get ready for it 01:10:36.880 --> 01:10:40.960 temporary students exactly you know this this doesn't really take into account 01:10:40.960 --> 01:10:45.600 all the renters moving in and out also because those are really net-zero because 01:10:45.600 --> 01:10:50.360 those homes turn but again all the new apartments that we have coming in that 01:10:50.360 --> 01:10:55.400 that is an impact from that we have to have to prepare for we talked about 01:10:55.400 --> 01:11:00.260 commercial service that's not only the business the multifamily sector is in 01:11:00.260 --> 01:11:07.380 that commercial service opportunity we started this graph actually with the 01:11:07.380 --> 01:11:11.520 start of COVID because as businesses were closing they were reducing the 01:11:11.520 --> 01:11:15.740 amount of service they had we and we we kept this chart going to really show 01:11:15.740 --> 01:11:23.080 what of our increases are and since the beginning of this year we've had 419 01:11:23.080 --> 01:11:29.640 yards per week added to our system now what does that mean basically that's 01:11:29.640 --> 01:11:35.280 418 yards of garbage that we have to collect in a can somewhere that is a 01:11:35.280 --> 01:11:41.080 route that is a person in a new piece of equipment so out there servicing so 01:11:41.080 --> 01:11:44.960 again it is again is that is that four-letter word of growth that we have 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 01:11:48.880 --> 01:11:52.920 vibrant it is growing another sector that we look at is roll-off this is 01:11:52.920 --> 01:12:00.320 directly related to the construction industry you'll notice back in October 01:12:00.320 --> 01:12:04.920 and again these percentages are year over year so it's last year presented to 01:12:04.920 --> 01:12:08.240 what we're seeing in this year and again in October November December cooler 01:12:08.240 --> 01:12:12.360 months but again we saw a significant some significant increases even though 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 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 01:12:22.320 --> 01:12:26.640 percent jump year over year right now we're trending at about 16 01:12:26.640 --> 01:12:31.600 percent growth in our roll-off business we actually excuse me we're realizing a 01:12:31.600 --> 01:12:36.240 16 percent growth but we're trending at about 35 percent again it is a tremendous 01:12:36.240 --> 01:12:40.760 growth sector that we're constantly having to chase and as the business as 01:12:40.760 --> 01:12:46.060 the building boom keeps keeps ramping up construction keeps going on this service 01:12:46.060 --> 01:12:51.600 sector will only increase over the next few years one of our things that we like 01:12:51.600 --> 01:12:55.360 to talk about is waste diversion a lot of people caught talk about recycling 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 01:12:59.000 --> 01:13:03.120 diversion it's everything that we collect that we don't send to a landfill 01:13:03.120 --> 01:13:06.200 so everything that's you know whether it's our yard waste whether it's our 01:13:06.200 --> 01:13:09.880 recycling whether it's appliances that are brought to the landfill that we end 01:13:09.880 --> 01:13:14.480 up sending out to metal recyclers 18 percent of everything that's brought to 01:13:14.480 --> 01:13:19.240 us either from residential commercial we collect at the HCC we actually turn 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 01:13:24.360 --> 01:13:28.960 dyno dirt whether it's y'all sending it off to our third-party processors again 01:13:28.960 --> 01:13:32.680 sending it for metal recycling a tremendous amount and this is consistent 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 01:13:36.520 --> 01:13:42.400 really improve that over the next years the next few years this next slide is a 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 01:13:48.560 --> 01:13:54.100 that that we see right now is in our residential and commercial recycling we 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 01:14:00.640 --> 01:14:04.800 COVID and people being home a lot of that has to do with the change in 01:14:04.800 --> 01:14:10.440 recycling market three years ago Asian countries basically said no more so 01:14:10.440 --> 01:14:14.760 the amount of material that we're able to recycle just actually get into the 01:14:14.760 --> 01:14:18.720 market and have processed has dropped the quality requirements of these 01:14:18.720 --> 01:14:23.600 third-party processors has gone through the roof city of Denton has aspirational 01:14:23.600 --> 01:14:27.080 recyclers we want to recycle as much stuff as we can but unfortunately it's 01:14:27.080 --> 01:14:31.480 not in our program so again that is considered contamination one of the 01:14:31.480 --> 01:14:36.600 biggest things right now with the very very poor resale prices that we have is 01:14:36.600 --> 01:14:43.580 wet material either wet material wet stuff is put into the cans itself or you 01:14:43.580 --> 01:14:47.560 know the last eight months have been extremely wet here in the city of Denton 01:14:47.560 --> 01:14:53.160 it get rain it gets rained on water is very very heavy eight pounds to the 01:14:53.160 --> 01:14:58.120 gallon so you know when you're trying to rate separate what is water what is 01:14:58.120 --> 01:15:02.560 actually recycled material you know discretion be to be in the better part 01:15:02.560 --> 01:15:06.440 of valor you put that you throw that wet material away so again it 01:15:06.440 --> 01:15:11.240 significantly compresses the ability that we have to get high quality material 01:15:11.240 --> 01:15:16.520 back up to the third-party processors the shining star in this though is back 01:15:16.520 --> 01:15:20.160 in November we actually implemented what we call the Rubicon system it's our 01:15:20.160 --> 01:15:24.000 smart routing system what that's been allowed us to do is not only you know 01:15:24.000 --> 01:15:27.780 right size our routes but it also gives the driver the ability to help us 01:15:27.780 --> 01:15:31.920 identify where this contamination is occurring they see a contaminated card 01:15:31.920 --> 01:15:36.680 at a residential they punch a button we capture that address specifically we 01:15:36.680 --> 01:15:41.120 know from our routes you know commercial routes if they see something 01:15:41.120 --> 01:15:44.480 heavily contaminated they can push a button because a lot of times when you 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 01:15:47.400 --> 01:15:53.200 so they can tap it there and that gives us sustainability our account 01:15:53.200 --> 01:15:57.240 coordinators the opportunity to go out and one-on-one and individually make a 01:15:57.240 --> 01:16:01.520 difference in reducing this if I was giving this presentation back in October 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 01:16:06.000 --> 01:16:10.480 made a significant contribution and ability to drive that number down and we 01:16:10.480 --> 01:16:14.080 hope that by the end of this year this number will be significantly lower yes 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 01:16:18.160 --> 01:16:22.480 successful in educating people is putting what you can put in the bins on 01:16:22.480 --> 01:16:28.800 top of the bins yes but you probably cannot advertise or communicate enough 01:16:28.800 --> 01:16:35.320 about what you can recycle I I think people are getting it more than they used 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 01:16:41.000 --> 01:16:44.400 know with the high number of rental units so we have single-family rent 01:16:44.400 --> 01:16:48.440 rental use that we have here students moving in students students moving out 01:16:48.440 --> 01:16:52.520 we're constantly chasing our tail having to educate and re-educate and re-educate 01:16:52.520 --> 01:16:56.960 and you know we're currently toying with sort of a welcome wagon program for lack 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 01:17:01.280 --> 01:17:04.920 information from the city of Denton and solid waste that really what it does it 01:17:04.920 --> 01:17:08.560 opens up the opportunity to say okay you know this is what the program is not 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 01:17:12.560 --> 01:17:16.880 used to live because we you know we've got a significant different set of 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 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 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 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 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 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 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 01:17:46.800 --> 01:17:51.040 oh I just wanted to say you need to advertise the waste wizard yes I mean 01:17:51.040 --> 01:17:54.840 that would be something to really push because I found that very useful and for 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 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 01:18:02.480 --> 01:18:07.960 or can't be recycled go into city of Denton recycling page type in what you 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 01:18:12.600 --> 01:18:16.160 it says we'll try this opportunity or this opportunity so again it gives you 01:18:16.160 --> 01:18:21.160 it just doesn't say yes or no but it does give you significant direction on 01:18:21.160 --> 01:18:28.520 how to divert that material places to donate or ways to reuse it correct okay 01:18:28.520 --> 01:18:39.440 all right so we will continue here so again moving into the budget 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 01:18:49.640 --> 01:18:53.720 of the hardest-working people here at the city of Denton you know there are 01:18:53.720 --> 01:18:59.600 certain folks who did a yeoman's work from their house you know they moved 01:18:59.600 --> 01:19:03.360 basically their office to their their living room their kitchen to the home 01:19:03.360 --> 01:19:08.720 office and and kept this city running but city of Denton solid waste folks day 01:19:08.720 --> 01:19:13.540 in day out day after day they were showing up for work they were picking up 01:19:13.540 --> 01:19:18.160 garbage at the curb they were picking up recycling at the curb they were picking 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 01:19:23.080 --> 01:19:27.640 had crew leaders and supervisors and managers jumping into trucks making sure 01:19:27.640 --> 01:19:34.640 that that garbage was collected and we had a safe and clean and sustainable 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 01:19:40.120 --> 01:19:45.440 enough credit you know we do 350,000 service stops a month for our 01:19:45.440 --> 01:19:50.400 residential standpoint and again they do it and we appreciate the fact that that 01:19:50.400 --> 01:19:54.840 they're out there doing it so again we continued with this with the slowdown 01:19:54.840 --> 01:20:00.600 and then the shutdown I talked a little bit about a Rubicon smart routing system 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 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 01:20:10.560 --> 01:20:14.840 improvements as we're going along we've talked a lot about our scale house 01:20:14.840 --> 01:20:19.960 system it's at the end of life so we finalized the acquisition of what we 01:20:19.960 --> 01:20:24.320 call what's called the strong data scale house software system so within this 01:20:24.320 --> 01:20:28.080 next year the implementation of that will occur and we continue working on 01:20:28.080 --> 01:20:33.600 the landfill expansion through our permit 1590 B at the state we're getting 01:20:33.600 --> 01:20:39.600 very close to having that awarded as we look forward to 21 22 again landfill 01:20:39.600 --> 01:20:43.360 expansions first and foremost we want to tie that up make sure that that we've 01:20:43.360 --> 01:20:48.560 got the capacity that you know looking forward secondly David brought this up 01:20:48.560 --> 01:20:52.040 but again our comprehensive solid waste management strategy we're looking 01:20:52.040 --> 01:20:55.920 forward to that completion so we can plan in the implementation of what we're 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 01:21:01.800 --> 01:21:05.040 you always do what you always done you always get what you always got well you 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 01:21:07.520 --> 01:21:10.200 you always got and I think what this opportunity is going to allow us to do 01:21:10.200 --> 01:21:14.120 is look at it differently so we can affect it differently so we can make the 01:21:14.120 --> 01:21:18.320 changes that need to be made to ensure not only that we're fiscally responsible 01:21:18.320 --> 01:21:24.480 but protecting diverting being as safe as we possibly can again reducing 01:21:24.480 --> 01:21:28.920 contamination fleet performance uptime and downtime we talk about our drivers 01:21:28.920 --> 01:21:33.320 our fleet is really the key to making sure that we can deliver those services 01:21:33.320 --> 01:21:37.000 so you know working with our fleet services so we can keep the trucks on 01:21:37.000 --> 01:21:41.160 the road you know and not having them sitting in shops that's probably the 01:21:41.160 --> 01:21:47.640 one thing that really hurts us and is downtime and with the chip shortage that 01:21:47.640 --> 01:21:53.320 everybody's talking about you know new vehicles really are not not available so 01:21:53.320 --> 01:21:57.280 we've got to maximize use of our existing fleet one of our old landfills 01:21:57.280 --> 01:22:00.480 out on Mosley Road there's some long-term maintenance issues that we're 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 01:22:05.840 --> 01:22:11.040 continuous improvements to cost safety and service delivery turn it over here 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 01:22:18.600 --> 01:22:21.520 thing Brian and Tammy and all the staff has always been great putting this 01:22:21.520 --> 01:22:26.240 budget together so just want to give them definitely credit so really quick 01:22:26.240 --> 01:22:29.920 revenue projections that we do have the 2% forecasting out years so very 01:22:29.920 --> 01:22:33.880 consistent across the utilities we are forecasting the hunter coal ranch 01:22:33.880 --> 01:22:38.360 development in 2023 and then the cell construction actually took place this 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 01:22:42.800 --> 01:22:45.960 members that were continuing to focus on revenue funding as many projects as 01:22:45.960 --> 01:22:51.200 possible so definitely wanted to point that out to you these are the revenues 01:22:51.200 --> 01:22:55.680 by different operational areas so you can see the adopted 2021 budget which 01:22:55.680 --> 01:22:59.240 we're currently in right here you can see residential revenue residential 01:22:59.240 --> 01:23:03.680 recycling front load side low which is typically commercial could also be a 01:23:03.680 --> 01:23:07.840 little bit residential mixed in there we have some roll-off open top revenue and 01:23:07.840 --> 01:23:11.520 then moving down the page another big category is a landfill gate revenue so 01:23:11.520 --> 01:23:16.200 total revenues for the adopted budget is a 39.8 million you see here we are 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 01:23:20.560 --> 01:23:25.320 the preliminary budget for fiscal year 2022 is 39.8 so really getting us back to 01:23:25.320 --> 01:23:32.880 where we were in 2021 solid waste expense by category so these are those 01:23:32.880 --> 01:23:36.360 different expense items within the operating budget grouped into different 01:23:36.360 --> 01:23:40.520 categories so you can see materials and supplies maintenance and repair 01:23:40.520 --> 01:23:45.600 operations transfer franchise fee administrative cost revenue funded 01:23:45.600 --> 01:23:50.360 capital and vehicle replacement so in 2021 you can see adopted expenses of the 01:23:50.360 --> 01:23:56.520 44.1 estimated a 43.4 so a little bit below budget and then the 01:23:56.520 --> 01:24:00.760 preliminary budget of 37 million and I will point out that the majority of this 01:24:00.760 --> 01:24:04.520 decrease is for the cell development cost so on that first bullet point or 01:24:04.520 --> 01:24:08.520 that first slide that we had we had the revenue funding capital you can see here 01:24:08.520 --> 01:24:13.160 was 6.4 million we have expense that money from the operating budget this 01:24:13.160 --> 01:24:17.640 fiscal year to revenue fund that cell development so it will go away next year 01:24:17.640 --> 01:24:22.640 so the majority that decrease is associated with that this is the expenses 01:24:22.640 --> 01:24:26.720 by operational area or division so the solid waste administration division 01:24:26.720 --> 01:24:32.400 residential commercial solid waste disposal which is also the landfill your 01:24:32.400 --> 01:24:36.240 home chemical collection division side operations miscellaneous and any 01:24:36.240 --> 01:24:41.160 supplemental request so in 2021 the adopted budget had a 44.1 million in 01:24:41.160 --> 01:24:47.840 expenses and the 43.4 we talked about and 37 million we do have 282,000 01:24:47.840 --> 01:24:51.400 supplemental packages for this utility and we'll talk about those shortly and 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 01:24:57.600 --> 01:25:01.040 outlook I'm going to walk you through this very similar to water and waste 01:25:01.040 --> 01:25:06.480 water and give you as much detail as possible so in 2021 we had adopted 01:25:06.480 --> 01:25:12.860 revenues of 39.8 million we had the adopted expenses we discussed 44.1 so 01:25:12.860 --> 01:25:18.280 the adopted budget had 4.3 million in reserve usage we are forecasting and in 01:25:18.280 --> 01:25:21.720 this fiscal year ending September 30th to use a little bit more in reserves 01:25:21.720 --> 01:25:26.280 about 4.8 million you can see that number right here with the expenses of 01:25:26.280 --> 01:25:29.960 43.4 that we talked about on the previous slide one thing I did want to 01:25:29.960 --> 01:25:33.400 point out is it's fiscal year 2021 budget did include a five percent rate 01:25:33.400 --> 01:25:36.760 decrease for residential customers that equated to about a dollar and eight 01:25:36.760 --> 01:25:40.280 cents a month for the average residential customer with a standard 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 01:25:45.360 --> 01:25:51.060 here in this dotted line you can see we had preliminary revenues of 39.8 with 01:25:51.060 --> 01:25:55.160 expenses of 37 so we're actually forecasting the finish the year 2.8 01:25:55.160 --> 01:26:00.080 million moving down the page what I wanted to point out is the ending fund 01:26:00.080 --> 01:26:05.600 balance is 9 million with the reserve targets down here in this pink color of 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 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 01:26:16.880 --> 01:26:20.480 million so I wanted to point that out for everybody we're not forecasting rate 01:26:20.480 --> 01:26:25.120 changes in this pro forma and the reserve requirement is above that 01:26:25.120 --> 01:26:30.380 reserve minimum in each of the years so good news one thing I definitely need to 01:26:30.380 --> 01:26:34.000 bring to your attention that we separated out this year so up in your 01:26:34.000 --> 01:26:38.480 revenues we have our wholesale waste agreements those will be in place through 01:26:38.480 --> 01:26:45.160 fiscal year 2022 but starting in fiscal year 2023 they're currently forecasted 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 01:26:49.760 --> 01:26:53.400 council if you make the decision to renew those contracts we would build them 01:26:53.400 --> 01:26:57.600 into this pro forma but this pro forma currently does not include those going 01:26:57.600 --> 01:27:02.600 forward past fiscal year 2022 so that's we want to bring that to your your 01:27:02.600 --> 01:27:05.840 attention today that no decision has been made on that but we definitely want 01:27:05.840 --> 01:27:11.340 to bring it to your attention this is the five-year capital plan so this is 01:27:11.340 --> 01:27:14.880 the preliminary capital budget is upcoming fiscal year a couple different 01:27:14.880 --> 01:27:18.200 tables on the solid waste fund we wanted to break it out by different funding 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 01:27:23.240 --> 01:27:27.400 have 6.7 million in capital funded projects is coming fiscal year that does 01:27:27.400 --> 01:27:32.120 include vehicle replacements we do sell different types of bonds for those 01:27:32.120 --> 01:27:36.840 capital projects 20-year bonds of two millions five-year bonds of 480,000 a 01:27:36.840 --> 01:27:40.680 little bit of revenue funding and you can see here for 40,000 coming from the 01:27:40.680 --> 01:27:45.400 operating fund and then those vehicle replacements of 4.2 and down here at the 01:27:45.400 --> 01:27:48.400 bottom we just grouped them into different categories you can see street 01:27:48.400 --> 01:27:53.600 structural vehicles and building construction for that total of 6.7 01:27:53.600 --> 01:27:57.000 million also so just giving you a couple different looks at it and how it groups 01:27:57.000 --> 01:28:01.520 together and how we're paying for it for this coming fiscal year so 01:28:01.520 --> 01:28:09.560 everybody's touched on it but just the vehicle replacement fund you buy off the 01:28:09.560 --> 01:28:13.960 buy board right yeah let me pull this down really good yeah Brian probably 01:28:13.960 --> 01:28:17.440 talked to that better about the buy board and your truck purchases out do 01:28:17.440 --> 01:28:22.000 you buy them off the buy board or it depends on what type of vehicle that 01:28:22.000 --> 01:28:26.160 we're looking for where we can take the opportunities to to purchase off some 01:28:26.160 --> 01:28:30.360 sort of cooperative we do because we get exceptionally good prices and it speeds 01:28:30.360 --> 01:28:34.720 up the price but there are other trucks that marrying the chassis with the body 01:28:34.720 --> 01:28:39.360 those are special fleet orders that are specific to the city of Denton so we have 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 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 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 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 01:28:54.920 --> 01:28:58.440 what's on the ground you know because there are some people who due to COVID 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 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 01:29:04.880 --> 01:29:09.360 purchase that others were being extremely aggressive and trying to get 01:29:09.360 --> 01:29:14.800 letters of intent out there saying that you know go ahead get us in your build 01:29:14.800 --> 01:29:19.200 cycle you know October 1 comes we have the funding but you know don't because 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 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 01:29:25.640 --> 01:29:28.360 budget ahead so far ahead of time you ought to be in pretty good shape we 01:29:28.360 --> 01:29:32.960 should be in decent shape and fortunately also this past year from a 01:29:32.960 --> 01:29:36.960 landfill standpoint we've been able to get all of our you know big equipment 01:29:36.960 --> 01:29:40.920 yellow iron that we've needed and delivered so we're not having we're not 01:29:40.920 --> 01:29:45.480 as subject to that the speculation in that market as we are to the the front 01:29:45.480 --> 01:29:49.760 line fleet thank you 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 01:30:02.920 --> 01:30:08.680 previous slides on the budget there was franchise fees and administrative and 01:30:08.680 --> 01:30:14.360 I'm curious what the franchise fees refers to so mr. Ryback that's a great 01:30:14.360 --> 01:30:19.720 question those are fees paid to the general fund that ultimately get 01:30:19.720 --> 01:30:22.840 transferred over to the street fund for street improvements that was guidance we 01:30:22.840 --> 01:30:28.160 received from City Council several years ago so those are five percent five 01:30:28.160 --> 01:30:34.000 percent of revenues they go to the general fund all right so that's 01:30:34.000 --> 01:30:37.760 something that's being set aside per council mandate is that correct that's 01:30:37.760 --> 01:30:41.400 correct yeah several years ago the council gave staff direction to 01:30:41.400 --> 01:30:45.320 establish a franchise fee the franchise fees would ultimately make their way to 01:30:45.320 --> 01:30:49.000 the street fund to do street improvements in the city so each utility 01:30:49.000 --> 01:30:56.560 pays in a franchise fee of five percent so okay thank you their taxes yeah well 01:30:56.560 --> 01:31:02.400 and you know in cities that that have you know private third-party companies 01:31:02.400 --> 01:31:06.840 that are out perching doing it it's basically it would be a fee that they 01:31:06.840 --> 01:31:10.000 would pay also for the use of the city infrastructure to perform their 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 01:31:14.400 --> 01:31:19.380 value standpoint of determining you know and appraising how well we're doing with 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 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 01:31:27.320 --> 01:31:36.720 infrastructure thank you all right I think I only got a couple more slides to 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 01:31:41.920 --> 01:31:50.800 you may have okay so supplemental packages for full-time positions so you 01:31:50.800 --> 01:31:55.000 can see here a field service worker to is being requested HEO to a heavy 01:31:55.000 --> 01:32:00.080 equipment operator to a roll-off truck driver of one and then a field service 01:32:00.080 --> 01:32:05.280 supervisor of one we do have a part-time intern there at the bottom so total 01:32:05.280 --> 01:32:09.040 supplemental requests are 282,000 you want to point out all these are 01:32:09.040 --> 01:32:12.640 included in the pro forma so no rate increases being proposed this future 01:32:12.640 --> 01:32:16.520 year and they are funded to get questions regarding the positions of 01:32:16.520 --> 01:32:23.240 course Brian could speak to them but then that future calendar so we will 01:32:23.240 --> 01:32:27.400 talk to you again of course on July the 12th with a budget and rate discussion 01:32:27.400 --> 01:32:37.120 then I will pull this down for questions any questions I just wanted to 01:32:37.120 --> 01:32:42.680 compliment you on the number of times I get to hear no rate increases yeah 01:32:42.680 --> 01:32:49.520 congratulations very good point that's all thank you then chair we have electric 01:32:49.520 --> 01:32:52.480 so Tony point they will come up and present the operational information for 01:32:52.480 --> 01:32:55.560 electric thank you 01:33:12.680 --> 01:33:22.160 so mr. chair members of the board Tony point the DMV general manager thank you 01:33:22.160 --> 01:33:25.600 for the opportunity to come and present this budget to you first of all before I 01:33:25.600 --> 01:33:30.640 began I wanted to first of all again acknowledge our customers and the 01:33:30.640 --> 01:33:34.200 difficult time and the challenges that they experienced during winter storm 01:33:34.200 --> 01:33:39.200 yuri that certainly was not something that that we wanted and certainly we did 01:33:39.200 --> 01:33:42.680 our best to try to provide the best service that we could and the power that 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 01:33:47.080 --> 01:33:51.080 yeoman work that they did fantastic work many cases left their own families to 01:33:51.080 --> 01:33:56.720 come and serve our customers I proud to serve with them I tell people all the 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 01:34:00.560 --> 01:34:05.480 Marine Corps they're just fantastic people they continue to amaze me and 01:34:05.480 --> 01:34:09.280 surprise me every single day including this weekend you know we had a couple 01:34:09.280 --> 01:34:14.240 folks really do some fantastic work this weekend protecting our assets and that's 01:34:14.240 --> 01:34:17.360 just something that that they do just because they love what they do and they 01:34:17.360 --> 01:34:22.160 love our customers I will tell you that since winter storm yuri we fielded a 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 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 01:34:32.760 --> 01:34:37.760 own provider it's amazing how many people are thankful that during winter 01:34:37.760 --> 01:34:42.960 storm yuri they were they actually had DME because they could see friends and 01:34:42.960 --> 01:34:47.080 family members across the state of Texas and they were without power for for days 01:34:47.080 --> 01:34:51.200 in some cases and so we're certainly thankful for our customers and certainly 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 01:34:55.400 --> 01:35:01.200 telling me that they want to switch away from DME so again really just credit our 01:35:01.200 --> 01:35:06.800 staff and really this community for for what we do in a single every single day 01:35:06.800 --> 01:35:12.720 so again I'll be presenting the piece of this presentation at Chris Lutrick our 01:35:12.720 --> 01:35:15.840 executive manager of operations and I know you guys would prefer to listen to 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 01:35:19.880 --> 01:35:24.560 operating presentation and of course our director of finance Cassie Ogden will be 01:35:24.560 --> 01:35:30.320 here to present the financial pieces this is just a brief organizational chart of 01:35:30.320 --> 01:35:35.000 what we look like you know certainly Terry Nolte our assistant general 01:35:35.000 --> 01:35:38.960 manager who's actually on should be on the phone case there are some questions 01:35:38.960 --> 01:35:43.960 that that he may need to come in and answer Bill Shepard's our executive 01:35:43.960 --> 01:35:47.880 manager of business services Bill started with us the week of a winter 01:35:47.880 --> 01:35:52.400 storm yuri and got to experience that along with his family in an RV park you 01:35:52.400 --> 01:35:55.240 know because he was just temporarily housing and so we're fortunate to have 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 01:35:59.480 --> 01:36:03.320 day is our executive manager of risk and compliance and you know he really keeps 01:36:03.320 --> 01:36:06.720 us in a straight and narrow when it comes to regulatory issues and and risk 01:36:06.720 --> 01:36:12.000 and compliance issues in their utility of course Chris Lutrick who's been you 01:36:12.000 --> 01:36:16.640 know he's done a great job for us running our operations and our field 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 01:36:21.840 --> 01:36:25.760 role so we're thankful for him and in here today we also have Jerry Fildler 01:36:25.760 --> 01:36:31.440 who's our division manager for for engineering and you know I tell Jerry 01:36:31.440 --> 01:36:36.000 that that groups really the brains of DME and certainly does a great job him 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 01:36:41.040 --> 01:36:44.840 capital projects as well which his team really kind of is at the forefront of 01:36:44.840 --> 01:36:51.520 leading so just a little bit about DME obviously the those are you that been on 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 01:36:54.880 --> 01:36:59.280 quite some time about a hundred and sixteen years 1905 I was doing a little 01:36:59.280 --> 01:37:03.600 bit of research over the weekend and so 39 years after the city of Denton was 01:37:03.600 --> 01:37:08.600 incorporated DME was formed and so we we certainly share a long history with with 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 01:37:14.200 --> 01:37:18.400 largest municipality I'm usually only to electric utility in the state of Texas 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 01:37:24.280 --> 01:37:29.240 state organization of all these utilities obviously the council is the 01:37:29.240 --> 01:37:33.040 governing body and adopts the budget and rates but certainly the public utility 01:37:33.040 --> 01:37:37.000 board serves a very important role in advising not just the utilities but 01:37:37.000 --> 01:37:40.320 certainly the City Council and making recommendations which this is part of 01:37:40.320 --> 01:37:43.400 the process is going through the budget and making recommendations to the 01:37:43.400 --> 01:37:49.000 council as they deliberate you know going forward after after August 1st one 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 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 01:37:56.600 --> 01:37:59.780 is not a separate organization we are a department of the city and it's 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 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 01:38:10.320 --> 01:38:14.640 a defined service territory we certainly serve the majority of the core of the 01:38:14.640 --> 01:38:19.800 city but there are dually and triply certified areas in which we do compete 01:38:19.800 --> 01:38:24.640 primarily on the initial stages of development and and I'll tell you I'm 01:38:24.640 --> 01:38:31.640 proud that the majority of developments choose to have DME serve those areas and 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 01:38:35.680 --> 01:38:39.480 we provide and Chris will be talking a little bit about those metrics I just 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 01:38:44.440 --> 01:38:49.400 core and what we are singly certified for we are the sole provider of 01:38:49.400 --> 01:38:53.880 electricity in in that area but out in the fringes you can see where we are 01:38:53.880 --> 01:38:58.640 singly and dually certified just an example we'll talk a little bit about 01:38:58.640 --> 01:39:03.200 Hunter and coal ranch was an area that was dually and triply certified in some 01:39:03.200 --> 01:39:09.880 areas and we are going to be serving the majority of that development so a couple 01:39:09.880 --> 01:39:13.000 of goals over the last two years a couple accomplishments over the last two 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 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 01:39:22.840 --> 01:39:27.160 see why we're making the recommendations that we're making but one of the first 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 01:39:31.720 --> 01:39:35.840 analysis and certainly in conjunction with the voluntary separation program we 01:39:35.840 --> 01:39:40.180 were able to eliminate 20 FTEs that's about two million dollars an annual 01:39:40.180 --> 01:39:44.080 basis that came out of our operating budget ten million dollars over a five 01:39:44.080 --> 01:39:48.560 year period so substantial amount of savings that really has has helped us 01:39:48.560 --> 01:39:52.760 not only organizationally to work more efficiently but also I think from a 01:39:52.760 --> 01:39:56.480 financial standpoint has put us in the position that we're in today and the 01:39:56.480 --> 01:39:59.920 recommendation that that you'll see coming forward I already mentioned 01:39:59.920 --> 01:40:05.040 hunter coal ranch those are pretty large developments we'll we're gonna serve 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 01:40:11.640 --> 01:40:15.300 hunter coal ranch that will be served by coaster of electric and they are only 01:40:15.300 --> 01:40:18.800 certified for coaster of electric so that was the only piece that we could 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 01:40:24.600 --> 01:40:29.800 those will be served by by DME about 3,000 multifamily unions are projected 01:40:29.800 --> 01:40:34.560 and 350 commercial industrial properties that will develop throughout that entire 01:40:34.560 --> 01:40:39.600 development this is a net positive cash flow for for DME over that 30 year 01:40:39.600 --> 01:40:46.160 period about 183 million dollars worth of positive income that will that will 01:40:46.160 --> 01:40:50.840 come to the benefit of DME and certainly as we spread and grow that base will 01:40:50.840 --> 01:40:54.680 certainly be able to spread those costs and and and this will certainly help us 01:40:54.680 --> 01:41:01.440 keep our rates stable going forward into the future the next item we had about 01:41:01.440 --> 01:41:08.260 18 and a half million dollars worth of savings by basically postponing the Eagle 01:41:08.260 --> 01:41:14.240 Drive substation we as you may recall we are making some improvements about the 01:41:14.240 --> 01:41:20.200 local substation and then the new Hickory GIS substation to serve DME that 01:41:20.200 --> 01:41:23.800 property that is there on Eagle Drive we will retain ownership for that property 01:41:23.800 --> 01:41:27.840 we're gonna land bank it because eventually we will need a substation and 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 01:41:31.920 --> 01:41:36.680 half million dollars of savings to our ratepayers and then finally the last 01:41:36.680 --> 01:41:39.160 item that I'll just kind of just talk about certainly if you have any 01:41:39.160 --> 01:41:42.280 questions about the other items I'm happy to respond to those but we did 01:41:42.280 --> 01:41:45.880 reduce our bond sale for the current year by 20 million dollars that's 01:41:45.880 --> 01:41:50.560 something that you know even though you approve a CIP budget this year for for 01:41:50.560 --> 01:41:54.680 the next five years and certainly for fiscal year 21-22 before we go to issue 01:41:54.680 --> 01:41:58.880 those bonds we will go back and we'll reevaluate those projects see where they 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 01:42:03.520 --> 01:42:06.640 cash flows with some other financing opportunities we'll certainly be 01:42:06.640 --> 01:42:11.080 looking at that just like we did this year and certainly what that translates 01:42:11.080 --> 01:42:16.920 to is a reduced projected annual debt service going forward that again helps 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 01:42:22.640 --> 01:42:29.880 to mr. Lutrik and he'll take the rest of the presentation good morning board 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 01:42:36.040 --> 01:42:39.720 you have any questions on any of the information that I don't directly speak 01:42:39.720 --> 01:42:44.920 to just let me know one thing we'd like to highlight is our accomplishments last 01:42:44.920 --> 01:42:49.360 year or the current fiscal year was again our reliability so other than 01:42:49.360 --> 01:42:53.640 winter storm URI those were controlled outages so that those do not count in 01:42:53.640 --> 01:43:02.000 our metrics but again we were we were awarded an APPA certification for our 01:43:02.000 --> 01:43:06.480 reliability so that's the American Public Power Association is kind of our the 01:43:06.480 --> 01:43:12.160 national trade organization for municipalities so again that's our third 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 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 01:43:23.160 --> 01:43:28.600 month-long application how we operate our business our reliability metrics our 01:43:28.600 --> 01:43:35.120 staffing our staff training and just it's just honor for us to get that to 01:43:35.120 --> 01:43:40.040 get that award and finally on here we energized Brinker substation so that 01:43:40.040 --> 01:43:44.880 that's a substation that's located over by the DME campus a pretty large project 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 01:43:50.440 --> 01:43:57.800 base for our t-cost looking forward to the upcoming year the one at the top 01:43:57.800 --> 01:44:03.160 here is probably the most the most relevant to the utility that is our our 01:44:03.160 --> 01:44:07.400 full rate case that we have to submit to the Public Utility Commission of Texas 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 01:44:12.640 --> 01:44:17.880 case a full rate case was in the early 2000s that's right after deregulation so 01:44:17.880 --> 01:44:21.880 that's something that that Cassie will speak to that they could have some 01:44:21.880 --> 01:44:26.880 serious consequences to our finances some other stuff on here that we have 01:44:26.880 --> 01:44:31.140 planned a complete a cost of service study as you know you'll be looking at 01:44:31.140 --> 01:44:37.680 the rates going forward our current cost of service study is outdated so when it 01:44:37.680 --> 01:44:43.680 was done in 2017 we still had Givens Creek online so we're actually buying 01:44:43.680 --> 01:44:48.360 that power our portion of the power that and our t-cost revenue have gone up 01:44:48.360 --> 01:44:53.760 substantially so the new cost of service will take those into account and a new 01:44:53.760 --> 01:44:58.920 thing we're excited about this year is as a tree line USA utility designation so 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 01:45:05.420 --> 01:45:11.080 Day a program that acknowledges that our tree trimming program meets all that 01:45:11.080 --> 01:45:15.280 that meets all of their guidelines for responsible vegetation management and 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 01:45:19.480 --> 01:45:24.400 major construction project is getting ready to kick off and that's the Hickory 01:45:24.400 --> 01:45:29.640 GIS substation and the associated transmission line that will connect 01:45:29.640 --> 01:45:35.440 locus to Hickory through the UNT campus when we complete this project we'll have 01:45:35.440 --> 01:45:41.720 our inner loop a ring back up and projects going forward should be for 01:45:41.720 --> 01:45:46.520 expansion which would be the underwood substation for the Hunter coal ranch and 01:45:46.520 --> 01:45:52.120 again and another hot topic item is our LED retrofit program we're continuing on 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 01:45:56.240 --> 01:46:02.640 wrap that up not this fiscal year but the following fiscal year here's a graph 01:46:02.640 --> 01:46:07.460 that we bring every year during the budget and it's a rate comparison so the 01:46:07.460 --> 01:46:13.360 the graph on the left is how our rates compare to comparably sized I mean other 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 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 01:46:26.720 --> 01:46:32.640 that we are 100% renewable we added a graph where we compare our rates which 01:46:32.640 --> 01:46:37.120 we only have one rates it's 100% renewable with some competitive packages 01:46:37.120 --> 01:46:42.080 out there that are a 12-month term they're also 100% renewable so these are 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 01:46:45.800 --> 01:46:51.080 have access to these to these programs so as you can see our hundred twenty four 01:46:51.080 --> 01:46:56.640 eighty is just a dollar or two more than the average for those plans so any 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 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 01:47:04.680 --> 01:47:06.960 rates 01:47:06.960 --> 01:47:14.960 doesn't appear to be our key metric that we have that probably most people came 01:47:14.960 --> 01:47:20.560 to understand during winter storm URI is what we call system average interruption 01:47:20.560 --> 01:47:25.620 duration index or Sadie so what this is is basically when that when the lights 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 01:47:30.360 --> 01:47:37.440 the the 2020 national average was about 139 minutes our average came in at a 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 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 01:47:48.520 --> 01:47:52.920 you remember was a bad storm year we had those straight-line winds and the small 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 01:48:00.720 --> 01:48:05.000 Tony mentioned and in his part of the presentation we were down 20 FTE's 01:48:05.000 --> 01:48:12.880 through the VSP program so that dropped us from 189 to 169 and that was probably 01:48:12.880 --> 01:48:18.200 very very lean for our organization as the other utilities I think Brian had a 01:48:18.200 --> 01:48:23.600 very good graph the growth we realized that in the last 10 years we've added 01:48:23.600 --> 01:48:30.680 about 65 miles of distribution lines so we have more system to maintain yet we 01:48:30.680 --> 01:48:34.520 were doing it with significantly less people so I think what you will see we 01:48:34.520 --> 01:48:39.800 did add two positions mid-year one of those was in operations and one of them 01:48:39.800 --> 01:48:43.840 was in engineering but as you'll see we're really evaluating how do we 01:48:43.840 --> 01:48:49.520 right-size our organization so with that we're proposing two additional FTE's for 01:48:49.520 --> 01:48:54.880 the upcoming budget the first I'll start with is the line designer for engineering 01:48:54.880 --> 01:49:00.320 so again the common thing is growth so this is our it's an engineering staff 01:49:00.320 --> 01:49:04.640 member that does our review our plan reviews so we right now we have one 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 01:49:10.440 --> 01:49:14.100 he can manage so that this is another position that will work in the 01:49:14.100 --> 01:49:19.560 engineering department and support that plan review the second is our senior 01:49:19.560 --> 01:49:24.920 business intelligence analyst I can't apply for it because I can't even say it 01:49:24.920 --> 01:49:29.880 what this is in our EMO our EMO handles massive amounts of data so they have 01:49:29.880 --> 01:49:34.600 data coming from ERCOT from weather forecasts from all their sources of 01:49:34.600 --> 01:49:40.080 information that they use so it's overwhelming so this person's duties is 01:49:40.080 --> 01:49:45.080 managing that data flow and getting it into a form that these guys can use 01:49:45.080 --> 01:49:52.360 every day to make to make smart business decisions where's your 01:49:52.360 --> 01:49:58.680 meteorologist he's coming okay and Terry is listening right now and he's 01:49:58.680 --> 01:50:05.160 cringing so we do have three supplemental they all have to do with 01:50:05.160 --> 01:50:09.920 either a service or an FTE so as I mentioned the the senior business 01:50:09.920 --> 01:50:15.160 intelligence analyst and the line designer those will be two new FTEs and 01:50:15.160 --> 01:50:20.000 much to Mr. Naltjes Chagrin he's not getting a full-time meteorologist 01:50:20.000 --> 01:50:24.960 meteorologist on his staff so what we have elected instead is to put forth 01:50:24.960 --> 01:50:32.040 that money into a service so the basis of this service is as you know everybody 01:50:32.040 --> 01:50:36.360 knew the winter storm URI was coming but what happened was the models kept 01:50:36.360 --> 01:50:41.040 sliding so if you remember they had a hitting earlier in the week and it ended 01:50:41.040 --> 01:50:45.560 up sliding into a holiday Monday which you know if we would have known 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 01:50:48.720 --> 01:50:53.000 have been they could have taken some more steps to mitigate that so with that 01:50:53.000 --> 01:50:58.400 would be instead of Terry getting his wish is is what we will procure those 01:50:58.400 --> 01:51:07.800 services on just on contract basis so here's our capital improvement plan so 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 01:51:12.440 --> 01:51:17.560 looked at everything we could do to to offset or help mitigate those those 01:51:17.560 --> 01:51:21.560 effects to our to our performer so as you will see here is our capital 01:51:21.560 --> 01:51:25.400 improvement plan and I know mr. Cheeks been here for a while you do notice the 01:51:25.400 --> 01:51:29.760 numbers are getting smaller so we're about to get all of our expensive stuff 01:51:29.760 --> 01:51:35.360 completed it's still heavily loaded in 22 and 23 that is the hickory GIS 01:51:35.360 --> 01:51:41.160 substation and the associated transmission line and the other cost you 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 01:51:47.720 --> 01:51:51.720 wrap up these projects that that number is falling off significant significantly 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 01:51:59.880 --> 01:52:07.920 year by about 20 million dollars our major projects that we have going on is 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 01:52:14.080 --> 01:52:17.680 you imagine you drive around we have a lot of wooden poles in the city of 01:52:17.680 --> 01:52:24.320 various ages right at about 10,000 of them so we kicked off an inspection just 01:52:24.320 --> 01:52:29.400 to start with scratch we're inspecting inspecting every pole on our system and 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 01:52:35.560 --> 01:52:40.320 through about half the poles so about five thousand fifty five hundred we have 01:52:40.320 --> 01:52:44.440 a thousand that we need to replace so this is a preventative maintenance for 01:52:44.440 --> 01:52:48.920 us they are identifying some critical poles we try to get those switched out 01:52:48.920 --> 01:52:52.680 in a week but generally what they're finding that our poles are out of spec 01:52:52.680 --> 01:52:56.760 so meaning that at some point in the near future they need to be replaced so 01:52:56.760 --> 01:53:03.640 that's a reliability project for us secondly is the streetlight program the 01:53:03.640 --> 01:53:09.000 three million dollars so as you know our new subdivisions their design lighting 01:53:09.000 --> 01:53:12.600 they have lighting plans they're properly lit so but our older 01:53:12.600 --> 01:53:17.400 neighborhoods was kind of put one every 300 feet and and see what happens so we 01:53:17.400 --> 01:53:23.240 actually have a study going on to determine what is the an adequate light 01:53:23.240 --> 01:53:27.920 level in neighborhoods so with that the results of that study and this money we 01:53:27.920 --> 01:53:32.240 will then go into these to these darker neighborhoods and get them properly 01:53:32.240 --> 01:53:37.000 illuminated and finally the last one on here is our big ticket item that's the 01:53:37.000 --> 01:53:43.960 hickory GIS substation so as Tony noted in the past well we had the option so 01:53:43.960 --> 01:53:47.920 the deck was was very expensive we had to issue all the bonds up front even 01:53:47.920 --> 01:53:52.240 though it took us three years to build it so with this commercial paper program 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 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 01:54:05.040 --> 01:54:09.660 half million of that is transmission related so it will be put into our rate 01:54:09.660 --> 01:54:13.840 base it will be able to recover those costs through our transmission cost to 01:54:13.840 --> 01:54:18.240 service and finally just another note that that bottom note is about the 01:54:18.240 --> 01:54:22.600 commercial paper so we'll better match our debt issuance with our with our cash 01:54:22.600 --> 01:54:27.360 flow needs so with that I'll answer any questions on the operations and before I 01:54:27.360 --> 01:54:36.140 turn it over to Cassie any questions not at this point thank you all right thank 01:54:36.140 --> 01:54:46.960 you good morning board Cassie Ogden director of finance so I wanted to go 01:54:46.960 --> 01:54:52.320 back through I know you've heard a lot about winter storm Uri today when when 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 01:54:57.160 --> 01:55:01.760 made several presentations regarding that impact and what we expected it to do 01:55:01.760 --> 01:55:06.460 to our budget next year so as you may recall our net expenses of the storm 01:55:06.460 --> 01:55:11.800 originally we expected it to be about 140 million due to that outstanding 01:55:11.800 --> 01:55:18.840 uplift charge of 9 million it's it's come to approximately 150 million we did 01:55:18.840 --> 01:55:23.980 receive direction to issue commercial paper notes to pay for that with the 01:55:23.980 --> 01:55:27.480 idea that we would refund those short-term commercial paper notes to 01:55:27.480 --> 01:55:32.720 long-term bonds to mitigate the the impact to the fund instead of all of 01:55:32.720 --> 01:55:35.720 that hundred and forty or hundred and fifty million hitting the electric fund 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 01:55:43.480 --> 01:55:47.960 pro forma in just a couple of slides and then previously we discussed with you 01:55:47.960 --> 01:55:54.920 and counsel the possibility of how do we pay make that that debt payment so we 01:55:54.920 --> 01:56:00.360 were discussing possibly five percent increase to electric rates for for this 01:56:00.360 --> 01:56:06.520 upcoming fiscal year however due to some uncertainties in the budget and just 01:56:06.520 --> 01:56:12.240 some outlying things that we we don't have great forecasts for yet we'd like 01:56:12.240 --> 01:56:17.080 to reevaluate the need for a rate increase mid-year so coming back 01:56:17.080 --> 01:56:22.000 possibly in December next year because Tony and Chris already talked about 01:56:22.000 --> 01:56:26.360 that that full rate filing that we were under that transmission cost of service 01:56:26.360 --> 01:56:31.520 revenue we're forecasting to decrease substantially but we we don't have the 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 01:56:36.160 --> 01:56:39.580 current factors that are known but there's still a lot of outstanding 01:56:39.580 --> 01:56:45.120 factors and then we do have a couple other items that could that will impact 01:56:45.120 --> 01:56:50.160 our financial situation so the TMPA mine sale the some potential data center 01:56:50.160 --> 01:56:53.960 projects and then also our cost of service study we are in the middle of 01:56:53.960 --> 01:56:57.880 that cost of service study we didn't want to make any rate changes without 01:56:57.880 --> 01:57:03.320 having that cost of service to justify the rate structure changes or impact or 01:57:03.320 --> 01:57:09.960 changes to the overall rate increase so some financial assumptions that are built 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 01:57:14.200 --> 01:57:20.580 half percent over the next five years I talked about that t-cost revenue so we 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 01:57:26.720 --> 01:57:30.840 a half percent which is substantial on our revenues and I'll show you that in 01:57:30.840 --> 01:57:36.400 the performer again that ROI because of COVID we did increase the ROI transfer 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 01:57:42.320 --> 01:57:45.880 half percent so that's tentatively scheduled right now in the performer and 01:57:45.880 --> 01:57:51.400 then again some uncertainties obviously we're right now in the middle of summer 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 01:57:54.720 --> 01:57:59.400 expecting the deck revenue to come in higher than we forecasted which will 01:57:59.400 --> 01:58:04.000 change our financial picture by the end of the fiscal year we've already talked 01:58:04.000 --> 01:58:08.040 about the transmission cost of service revenue and that rate filing impact as 01:58:08.040 --> 01:58:14.560 well as the cost of service study you may recall the reserve levels some of 01:58:14.560 --> 01:58:20.720 those changes so we did bring reserve targets to you to discuss kind of 01:58:20.720 --> 01:58:25.120 changing that reserve levels for electric we're keeping them the same for 01:58:25.120 --> 01:58:29.200 water wastewater but we did propose increasing those based on the winter 01:58:29.200 --> 01:58:33.600 storm impact for electric we discussed that with council and did get direction 01:58:33.600 --> 01:58:39.240 but they have not approved a formal policy of that change so I have the 01:58:39.240 --> 01:58:42.480 performer built up to where it shows you the current reserve level and then that 01:58:42.480 --> 01:58:51.400 proposed reserve level so we are not proposing at this time a rate increase 01:58:51.400 --> 01:58:56.240 for electric based on all of those uncertainties that I mentioned just a 01:58:56.240 --> 01:59:01.760 moment ago we felt like it would be premature to increase the electric rates 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 01:59:06.480 --> 01:59:11.880 and nineteen million dollars for our fund balance which would be right in the 01:59:11.880 --> 01:59:17.880 middle of that proposed reserve target range which is good news but 2023 is 01:59:17.880 --> 01:59:22.440 really where you start seeing that impact to the t-cost revenue that non 01:59:22.440 --> 01:59:26.800 rate revenue line you can see it going from 60 million to 45 million that's 01:59:26.800 --> 01:59:32.760 that thirteen and a half percent reduction or thirteen and a half percent rate of the 01:59:32.760 --> 01:59:38.160 t-cost revenue so it was previously 28 percent dipping down to thirteen and a 01:59:38.160 --> 01:59:42.880 half percent and that's still just a projection so a couple other things to 01:59:42.880 --> 01:59:49.880 point out obviously the estimate 2021 deck revenue a lot higher as well as the 01:59:49.880 --> 01:59:55.600 purchase power but we have shown the debt service starting for winter storm 01:59:55.600 --> 02:00:00.400 you're restarting in 2022 you can see that six point two million dollars as 02:00:00.400 --> 02:00:05.920 well as your supplemental packages that Chris just reviewed and because a couple 02:00:05.920 --> 02:00:10.360 of those are positions they're reoccurring in the future years I'm just 02:00:10.360 --> 02:00:14.680 wanted to point out again the reserve targets are not have not been formally 02:00:14.680 --> 02:00:19.320 adopted by council but we are we are tentatively showing them and we don't 02:00:19.320 --> 02:00:24.120 dip below those reserve targets until 2024 but again with so many 02:00:24.120 --> 02:00:29.240 uncertainties don't want to don't want to plan for rate increases yet based on 02:00:29.240 --> 02:00:34.480 just those outstanding items that will have a have a financial impact but we 02:00:34.480 --> 02:00:42.720 just don't know what that will look like yet and so Nick has already mentioned 02:00:42.720 --> 02:00:46.880 the next steps we will be bringing more budget and rate discussion back to you 02:00:46.880 --> 02:00:51.840 in July and then City Council will have their budget workshop in August with 02:00:51.840 --> 02:00:55.720 formal adoption in September and I'm happy to answer any questions you have 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 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 02:01:10.480 --> 02:01:15.720 point two million roughly you show starting next year on those payments for 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 02:01:22.480 --> 02:01:28.840 the same as what our other bonds are electric sells 30-year bond the other 02:01:28.840 --> 02:01:37.120 utilities usually sell 20-year 20-year bond thank you very much questions on 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 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 02:01:55.640 --> 02:02:01.400 that if many of the board members have any questions after today please feel 02:02:01.400 --> 02:02:05.480 feel feel free to direct them to Cassie and and Nick and they can certainly work 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 02:02:09.920 --> 02:02:16.760 month of June and ultimately before the end of July we'll be asking you to 02:02:16.760 --> 02:02:22.280 recommend to give us a recommendation on on these budgets and turning the rates 02:02:22.280 --> 02:02:27.480 as well that will be then discussing with the City Council during their their 02:02:27.480 --> 02:02:31.760 budget workshop and again that's just part of the role of the process that we 02:02:31.760 --> 02:02:36.400 follow through you know with with the PUB and and the council will know that 02:02:36.400 --> 02:02:40.920 you've made a recommendation either for or against against that budget so if 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 02:02:45.800 --> 02:02:50.160 as usual thank you staff for making this so we can understand it and I really 02:02:50.160 --> 02:02:54.480 appreciate you bringing it to us like in that form and having the detail there so 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 02:03:00.020 --> 02:03:03.040 We stand adjourned.