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 Okay, it is nine o'clock and we have a forms are called to order the public utilities board

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 meeting for the city of Denton for July 12 2021.

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 The first item is presentations from the public is anyone in the audience that wishes to speak?

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 Okay, do we have anybody on the phone?

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 No, chair, there is nobody on the phone for this meeting.

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 Okay, thank you.

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 Then the next item is the consent agenda.

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 Does any board member wish to pull an item from A through I?

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 Okay, Barbara is pulling H and then you have your hand up.

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 Let's see a a C and D and D will be quick questions.

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 Okay.

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 Nothing from Devon.

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 Nothing from Billy.

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 Okay.

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 Is there a motion to approve items B, E, F, G, and I move approval and a second second

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 and been seconded.

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 All in favor.

18
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 Say aye.

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 Aye.

20
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 Negative.

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 That carries.

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 Okay.

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 Item A.

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 We have somebody for them.

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 Okay.

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 So I'm gonna ask Brad Watts, he's our superintendent to come up here and respond to you.

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 Morning.

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 So I guess I'm curious, so regarding all the replacement of poles and inspection of poles

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 and such, how often do they need to be inspected and how often might they have any kind of

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 issue?

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 The inspection process can vary from five years, six, seven years, and it's been quite

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 some time since we've actually done a pole inspection and so with my department in engineering,

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 we started a pole inspection process and we really wanted to get a start date.

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 And so we're gonna inspect the entire infrastructure of all our wood poles, concrete poles, and

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 even steel poles.

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 Some utilities might do it, you know, broken up in quarters or however, and that's what

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 our goal will be is after we get all the poles inspected, then we have a starting point and

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 then we will start doing them on a quarterly basis then.

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 What sort of issues might you encounter?

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 The main issues you're gonna find is gonna be ground rot and just the age of the pole.

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 And you know, we've still got some aging poles out there, but the main thing is below ground

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 level and then also you get like just mother nature of lightning strikes that we don't

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 know that's hit the pole and you know might have burned parts of the pole out or something

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 to that effect.

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 Okay.

46
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 All right.

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 Any other questions?

48
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 Do we have a motion to approve item A?

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 Move approval.

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 Second.

51
00:03:01,640 --> 00:03:02,640
 Second.

52
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 All in favor say aye.

53
00:03:03,640 --> 00:03:04,640
 Aye.

54
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 Carries.

55
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 Item C. That was you two right there.

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 Yes.

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 And Brad will handle this one as well.

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 Okay.

59
00:03:20,840 --> 00:03:23,880
 Okay so I might have missed it.

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 Maybe I wasn't just didn't understand.

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 So is this to do active maintenance now or is kind of planning for the future for replacing

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 lights on I-35?

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 It's gonna be a little bit of both.

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 The majority though is gonna be the maintenance side of it.

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 Poles getting knocked down, lights going out, and we've actually encountered some theft

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 where they've actually stole the wire out of there.

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 And then part of it, you know, TxDOT's fixing to do another project in Denton and so that

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 could involve some of that and then also we've got the LED light project because the lights

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 that are on 35 now are majority HPS lights and they'll be as we're moving forward, when

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 we have a light go out, we will change it out with an LED and over a process and then

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 get them all changed out.

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 Okay.

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 Thank you.

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 Any other questions?

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00:04:16,880 --> 00:04:17,880
 All right.

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 Do we have a motion to approve item C?

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 So moved.

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 And a second?

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 Second.

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 Or a seconded.

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 All in favor say aye.

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 Aye.

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 And that's moved.

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 Item D. Okay.

85
00:04:32,900 --> 00:04:36,280
 Good morning.

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00:04:36,280 --> 00:04:39,400
 It's the Ben show today, sorry.

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 So if I read that right, it looks like the current contract ended two days ago?

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 Is that correct?

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 On the 10th.

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 Yes.

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 So today is the 12th.

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 The 12th.

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 So what does that mean for us right now?

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 Right now it means that basically they're not to be doing any consulting work for us

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 as part of a new permit or a permit for expansion.

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 So how does that impact the city?

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 It does not do anything right now because the permit is in the executive director's

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 office waiting for his signature.

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 It has been remanded back from the SOA, administrative law judge, and we're just waiting for his

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 signature and then that could happen anywhere from two days to about two weeks and then

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 once that happens then there's some stuff on the back end that we're going to need them

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 to do.

103
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 Okay.

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 To help us along.

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 So right now, I mean, if it could have hit at any other time it might have impacted us

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 a little bit but it's really opportune time right now.

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 Good deal.

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 Thank you.

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 Okay.

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 Thank you.

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 Any other questions?

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 All right.

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 Do we have a motion to approve Item D?

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 So moved.

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 And a second?

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 Second.

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 Thank you, Billy.

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 All in favor say aye.

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 Aye.

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 Opposed?

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 It's approved.

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 Thank you, Brian.

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 Okay, and Item H, that was Barbara.

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 I just had a question, who is currently, who are we dealing with on the banks?

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 Here comes Cassie.

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 Cassie Ogden is coming up, she's the director of finance.

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 Good morning.

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 We're currently using Wells Fargo.

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 That has been our bank for several years now.

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 Okay.

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 It looks like it's a pretty good deal.

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 Yes, we have a good working relationship with Wells Fargo.

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 We haven't had any issues.

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 We did have two other bidders but just really came down to price and probable performance.

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 Right.

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00:06:33,800 --> 00:06:34,800
 Okay.

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 Thank you very much.

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 You're welcome.

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 Move approval.

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 And do we have a second?

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 Second.

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 All in favor say aye.

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 Aye.

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 Opposed?

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 That one carries.

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 Next item is consider approval of the June 28th, 2021 minutes.

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 Do we have any changes or corrections to those minutes?

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 No.

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 Do we have a motion to approve?

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 Move approval.

151
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 Thank you, Billy.

152
00:07:06,120 --> 00:07:07,120
 And a second?

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 Second.

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 All in favor say aye.

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 Aye.

156
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 And you weren't here?

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 Yeah.

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 Okay.

159
00:07:14,000 --> 00:07:15,000
 Thank you.

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 There is two.

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 Items for individual consideration.

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 Consider recommending the adoption of an ORNS for the City of Denton, a Texas Home Rule

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 Municipal Corporation authorizing the city manager or their designee to execute a contract

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 with USIC Locating Services LLC for locating and marking all existing and future installed

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 utility lines for Denton Municipal Electric and the fiber, water, and wastewater departments

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 providing for the expenditure of funds therefore and providing an effective date RFP 7672 awarded

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 to the USIC Locating Services LLC for three years with the option for two additional one-year

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 extensions and the total five-year not to exceed amount of $4,500,000.

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 Okay.

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 I have a little presentation to talk about the underground utility locating and when

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 we first started doing it with contractors it was the electric department only based

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 off of the needs from the electric department and how many and then did it share?

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 Sorry about that, I thought I had it.

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 But now we're involving fiber optics has also been located by a contractor and now water

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 and wastewater will start utilizing a contractor.

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 As you know, in the state of Texas, you know, everybody hears the term, you know, call before

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 you dig.

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 It used to be Dig Test and now it's Texas 811 and Denton County is one of the fastest

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 growing counties in the state of Texas and then many types of the utilities in Denton

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 are, you know, buried underground underneath the streets, roadways, or right-of-ways, sanitary

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 and storm sewers, water, natural gas, oil pipelines, telephone, fiber optic, cable television,

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 traffic signal, electric power, so there's quite a bit of stuff buried in the ground.

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 These things are all protected under federal laws to prevent people from just going out

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 and digging, you know, and damaging or doing a strike on an underground line.

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 Anytime there is a hit on our lines, whether it be water, electric, of an unmarked or improper

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 marked line can result in, you know, serious injury, loss of service to customers, cost

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 of repairs, and loss of revenue, and, you know, until the repairs are made for all utilities

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 affected by an excavation strike.

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 The cost for us to do the city staff to perform a locate is approximately, depending upon

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 the department, it could be $50 to $100 an hour, which includes the labor and the vehicle

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 cost.

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 Depending on the locate also is a factor, you know, when you're doing hourly, paying

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 an employee to do the locate, you know, based on the department performing the locate.

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 And then you've also got costs for the city staff to perform emergency locates after hours,

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 you know, in the event of a, you know, water line or gas line or electric line.

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 After hours we have to call a locate, so do the contractors that are coming out to fix

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 the lines.

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 And then a cost for, this can range anywhere from $100 to $200 an hour, based on the length

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 of the locate and things like that, after hours and over time.

200
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 Cost for a contractor on the current contract that we're on right now is $12.04 per locate.

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 And then for the fiber locate it's $10.20 per ticket for each locate.

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 And then the locate prices are the same.

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 Due to the high volume of daily locate requests, which it's indenting as we're growing, it's

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 just getting more and more and more.

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 It would require additional staff specifically designated to perform locates should a decision

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 made to revert back to in-house locate services.

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 And on this page, you know, the locate costs, and you'll see a difference in electric locate

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 cost and then a water locate cost.

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 And one of the main reasons is we go all the way up into the meter base in the yard.

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 So the locate has to also do in the street, the right of ways, but also up into the customer's

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 yard for the customer service.

212
00:12:04,480 --> 00:12:08,360
 Water, you know, they're mainly in the street.

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00:12:08,360 --> 00:12:13,800
 Once you leave the meter, then up in the yard, then that becomes the property owner's responsibility.

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00:12:13,800 --> 00:12:18,460
 So that's one of the areas that reduces some of the costs for water.

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00:12:18,460 --> 00:12:21,720
 And then fiber, they pretty much stay the same throughout there.

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 I mean, the fiber network is what it is.

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 It's not growing as much as the water and electric because, I mean, they have their

218
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 own little gridded area.

219
00:12:34,220 --> 00:12:39,480
 And then in locates, you see in 2018, they fluctuate up and down.

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 There's many things that can affect, you know, how many locates you're going to have in a

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 year.

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00:12:45,120 --> 00:12:52,940
 What the economy's doing, I'll give you an example as far as when, like, one of the telecommunication

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 companies want to come in, and for example, Viles, when they came in denting with Viles,

224
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 they were digging in everybody's yard.

225
00:13:00,680 --> 00:13:04,960
 So our locates just, you know, went through the roof, but then once we got past that,

226
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 then it went back down.

227
00:13:05,960 --> 00:13:09,720
 So it can fluctuate up and down.

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00:13:09,720 --> 00:13:14,120
 Water stays right there with us pretty close, and then fiber, you know, again, fiber is

229
00:13:14,120 --> 00:13:15,800
 what it is.

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 They don't have as much.

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00:13:19,860 --> 00:13:21,340
 And this is an example.

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 When somebody digs and they don't have locates, this was actually out in front of Bonnebrae

233
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 substation.

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00:13:26,160 --> 00:13:32,120
 This took out three circuits, and so -- and they didn't have proper locates.

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 They had locates, but then when they started excavating, they removed the locates in a

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 new company -- or the same company, I apologize -- the same company came back to work.

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 The lines were moved, or the marks were erased because of digging, and then they actually

238
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 hit three circuits, so we had a, you know, major outage of three circuits on that side

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 of town.

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 It can be very costly when somebody don't -- when they don't call for locates.

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00:14:00,920 --> 00:14:04,600
 And in our direction, you know, we're seeking approval for a contract of underground utility

242
00:14:04,600 --> 00:14:10,040
 electric -- utility electric and fiber line locating services for the city of Denton and

243
00:14:10,040 --> 00:14:19,160
 award USIC locating services LSE in a three-year, with the option two additional one-year extensions

244
00:14:19,160 --> 00:14:25,400
 and the total of a five-year contract not to exceed $4.5 million.

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00:14:25,400 --> 00:14:30,760
 And the main reason to try and put this much money on this contract is we don't know what's

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00:14:30,760 --> 00:14:31,760
 coming.

247
00:14:31,760 --> 00:14:35,960
 We know that we've got 100 coal ranches that's going to hit, and when that does, the locates

248
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 are just going to go crazy for water and electric.

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 And then whatever else is coming down, you know, Denton is the -- it's one of the fastest

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 growing counties in Texas, and we want to be prepared for it.

251
00:14:47,280 --> 00:14:51,360
 And I'll answer any questions.

252
00:14:51,360 --> 00:14:52,360
 >> Any questions?

253
00:14:52,360 --> 00:14:54,760
 Yes, Barbara, go ahead.

254
00:14:54,760 --> 00:14:58,720
 >> Are they going to go back and start from the beginning to log them?

255
00:14:58,720 --> 00:15:05,600
 You said some of them were marked properly, so will they be locating?

256
00:15:05,600 --> 00:15:09,160
 Will this be comprehensive for the city?

257
00:15:09,160 --> 00:15:12,520
 >> I guess I don't -- I'm not understanding your question.

258
00:15:12,520 --> 00:15:13,520
 >> Okay.

259
00:15:13,520 --> 00:15:18,520
 You commented that sometimes they've -- the lines have been improperly located.

260
00:15:18,520 --> 00:15:24,240
 Are they going to check, go back and check so that we will have, during the course of

261
00:15:24,240 --> 00:15:28,240
 this contract, all of these things located within our city?

262
00:15:28,240 --> 00:15:31,680
 >> Well, locates are only -- and I made an improper statement.

263
00:15:31,680 --> 00:15:33,560
 I think I misled you on that.

264
00:15:33,560 --> 00:15:35,680
 It wasn't that it was improperly marked.

265
00:15:35,680 --> 00:15:41,200
 They marked the lines, but then while they were digging with the big excavators, the

266
00:15:41,200 --> 00:15:46,160
 lines were moved when they took the dirt up, and then it's their responsibility to call

267
00:15:46,160 --> 00:15:52,640
 us to let us know that we've damaged our -- the locates, we can't see where the lines are,

268
00:15:52,640 --> 00:15:53,640
 we'll go out.

269
00:15:53,640 --> 00:15:58,520
 Our -- actually our service trucks and water department also will go out right then and

270
00:15:58,520 --> 00:16:04,520
 re-mark, if not the contractor, to make sure that the lines are identified and marked.

271
00:16:04,520 --> 00:16:09,920
 Was that -- I guess I misled -- I said the wrong thing, and I guess that you took that

272
00:16:09,920 --> 00:16:10,920
 from that.

273
00:16:10,920 --> 00:16:11,920
 >> Yeah.

274
00:16:11,920 --> 00:16:17,580
 Barbara, I think what Brad's saying is that when that second crew from that same company,

275
00:16:17,580 --> 00:16:22,520
 when they came back the next day, they should have called in a line locate, and they didn't.

276
00:16:22,520 --> 00:16:24,680
 And that's what he meant by not being properly marked.

277
00:16:24,680 --> 00:16:25,680
 >> Okay.

278
00:16:25,680 --> 00:16:26,680
 >> Yes, ma'am.

279
00:16:26,680 --> 00:16:27,680
 >> Okay.

280
00:16:27,680 --> 00:16:31,900
 So we can re-mark the lines immediately right then.

281
00:16:31,900 --> 00:16:34,480
 >> And this does not displace any employees.

282
00:16:34,480 --> 00:16:36,720
 This is because we can't handle the work.

283
00:16:36,720 --> 00:16:37,720
 >> Correct.

284
00:16:37,720 --> 00:16:38,720
 >> Okay.

285
00:16:38,720 --> 00:16:39,720
 Any other questions?

286
00:16:39,720 --> 00:16:46,280
 >> What liability does the line locate company have for correctly locating these -- any lines

287
00:16:46,280 --> 00:16:47,280
 that you say about to locate?

288
00:16:47,280 --> 00:16:51,560
 >> They can be 100% liable if they improperly mark, which, you know, there's clauses in

289
00:16:51,560 --> 00:16:55,200
 the contract where they can, you know, they can argue it and everything, but they are

290
00:16:55,200 --> 00:16:56,200
 100% liable.

291
00:16:56,200 --> 00:16:58,680
 So if they mismark or if they don't mark.

292
00:16:58,680 --> 00:17:04,320
 So we can't go back to them for, you know, for all costs, the damages and everything.

293
00:17:04,320 --> 00:17:05,320
 >> Okay.

294
00:17:05,320 --> 00:17:06,320
 >> Okay.

295
00:17:06,320 --> 00:17:07,320
 Oh, yes, go ahead, Desmond.

296
00:17:07,320 --> 00:17:13,520
 >> So I'm noticing in the presentation you had costs for 2020 and number of locates for

297
00:17:13,520 --> 00:17:14,520
 2020.

298
00:17:14,520 --> 00:17:22,080
 It looks like it was $460,000 total cost and then about 50 -- a little over 50,000 locates,

299
00:17:22,080 --> 00:17:23,080
 55,000 locates.

300
00:17:23,080 --> 00:17:27,080
 So that's like $9 a locate in cost.

301
00:17:27,080 --> 00:17:32,360
 >> The current contract, we're at $12 and I'm speaking for electric, it's $12.04 and

302
00:17:32,360 --> 00:17:35,360
 then fiber is $10.85.

303
00:17:35,360 --> 00:17:39,920
 On the current contract we're in right now, do you have the price for the new contracts?

304
00:17:39,920 --> 00:17:41,680
 If not, I can give them to you.

305
00:17:41,680 --> 00:17:47,520
 >> Yeah, they're in here, but I'm just doing that math, it seems like the 2020 actual costs

306
00:17:47,520 --> 00:17:51,200
 were lower than the proposed contract.

307
00:17:51,200 --> 00:17:55,280
 And they can fluctuate up and down depending on one of the things that affected some of

308
00:17:55,280 --> 00:18:00,400
 that would have been COVID because there were contractors that weren't working and then,

309
00:18:00,400 --> 00:18:09,840
 you know, based off call volume how many people need locates versus, you know, 19, 2020, 2021.

310
00:18:09,840 --> 00:18:21,160
 >> Yeah, so just looking at just the water, $134,000 for 23,000 locates.

311
00:18:21,160 --> 00:18:24,200
 So that's $6 a locate that we performed ourselves?

312
00:18:24,200 --> 00:18:27,920
 >> No, I see there's different parts of the line locate contract.

313
00:18:27,920 --> 00:18:33,600
 You've got your locate for just a normal locate that you go out and then you have an after

314
00:18:33,600 --> 00:18:40,400
 hours locate and so that's going to entail all that and then you also have another price

315
00:18:40,400 --> 00:18:45,600
 that's thrown in there as far as when a locator, they keep having to come back over and over

316
00:18:45,600 --> 00:18:51,240
 and over and over, they will call that a project rate.

317
00:18:51,240 --> 00:18:56,200
 Since they're coming back out there so many times, they've moved to a different rate because

318
00:18:56,200 --> 00:18:59,600
 they're going to spend, you know, three or four hours out there locating something so

319
00:18:59,600 --> 00:19:03,760
 then they charge us a locate so that it's not broken down but that, you know, that involves

320
00:19:03,760 --> 00:19:08,320
 all those prices.

321
00:19:08,320 --> 00:19:10,200
 >> Thank you.

322
00:19:10,200 --> 00:19:11,200
 >> Any other questions?

323
00:19:11,200 --> 00:19:17,040
 All right, do we have a motion to approve this item?

324
00:19:17,040 --> 00:19:19,040
 >> Moved.

325
00:19:19,040 --> 00:19:21,040
 >> Second.

326
00:19:21,040 --> 00:19:29,160
 >> Well, actually Ben moved first so Billy, you're the second.

327
00:19:29,160 --> 00:19:30,440
 All in favor say aye.

328
00:19:30,440 --> 00:19:31,440
 >> Aye.

329
00:19:31,440 --> 00:19:32,440
 >> Aye.

330
00:19:32,440 --> 00:19:33,440
 >> Opposed?

331
00:19:33,440 --> 00:19:34,440
 Thank you.

332
00:19:34,440 --> 00:19:35,440
 Thank you.

333
00:19:35,440 --> 00:19:36,440
 Management reports.

334
00:19:36,440 --> 00:19:37,440
 Mr. Palenty.

335
00:19:37,440 --> 00:19:39,720
 >> So Madam Chair, members of the PB.

336
00:19:39,720 --> 00:19:42,880
 So we have a couple of items here for you.

337
00:19:42,880 --> 00:19:49,240
 The first one is a memo from our finance department regarding the series 21 utility system revenue

338
00:19:49,240 --> 00:19:51,040
 refunding bonds.

339
00:19:51,040 --> 00:19:59,360
 Cassie Ogden is here with us if anyone has any questions on that particular memo.

340
00:19:59,360 --> 00:20:00,360
 >> Questions from the board?

341
00:20:00,360 --> 00:20:06,840
 Go ahead, Mr. Taylor.

342
00:20:06,840 --> 00:20:07,840
 >> So I'm new up here.

343
00:20:07,840 --> 00:20:09,640
 So I don't know if this has already been covered.

344
00:20:09,640 --> 00:20:15,400
 I was wondering if we had an idea of what the likely impact will be over the next-- over

345
00:20:15,400 --> 00:20:17,440
 the 30-year term to rate payers.

346
00:20:17,440 --> 00:20:19,440
 >> That's a good question.

347
00:20:19,440 --> 00:20:20,440
 >> Good morning.

348
00:20:20,440 --> 00:20:28,360
 So we did a presentation at the last PB meeting on the electric performa and the rate impact.

349
00:20:28,360 --> 00:20:31,520
 Right now we are not projecting to increase rates.

350
00:20:31,520 --> 00:20:36,880
 That's one of the reasons we wanted to do the refunding and spread that cost over 30

351
00:20:36,880 --> 00:20:42,000
 years so that it wasn't a one, you know, one hit in one year to the rate payers.

352
00:20:42,000 --> 00:20:45,240
 But we have a lot of uncertainties right now with the electric fund.

353
00:20:45,240 --> 00:20:53,540
 We have an outstanding full case rate filing for our transmission cost of revenue which

354
00:20:53,540 --> 00:20:58,740
 could impact the revenue that we receive on our transmission costs or assets.

355
00:20:58,740 --> 00:21:03,000
 And then we also have a cost of service study that's currently outstanding.

356
00:21:03,000 --> 00:21:07,640
 So we didn't want to bring a rate increase forward and then have a cost of service study

357
00:21:07,640 --> 00:21:11,320
 done that could potentially impact the rates.

358
00:21:11,320 --> 00:21:16,160
 So we're projecting to bring back rate discussions in December.

359
00:21:16,160 --> 00:21:17,160
 >> OK.

360
00:21:17,160 --> 00:21:18,160
 Thank you.

361
00:21:18,160 --> 00:21:19,160
 >> OK.

362
00:21:19,160 --> 00:21:25,840
 So the next item that we have here for you is I think it's a follow-up memo from our

363
00:21:25,840 --> 00:21:30,360
 purchasing compliance area for the north-south main project.

364
00:21:30,360 --> 00:21:36,220
 It was a tender agreement that Christine Taylor, our director over that area is here if anyone

365
00:21:36,220 --> 00:21:39,920
 has any questions.

366
00:21:39,920 --> 00:21:40,920
 >> Questions on the memo?

367
00:21:40,920 --> 00:21:41,920
 I see none.

368
00:21:41,920 --> 00:21:42,920
 >> OK.

369
00:21:42,920 --> 00:21:51,640
 And then the final two items are just our feature agenda items, you know, and Nick will be talking

370
00:21:51,640 --> 00:21:58,400
 a little bit more again with you about the schedule for the budget and in final approval

371
00:21:58,400 --> 00:22:04,360
 or recommendation to the council from the board, not just on the budgets for the utilities

372
00:22:04,360 --> 00:22:10,520
 but also on the individual rate ordinances, those will be coming to you as well.

373
00:22:10,520 --> 00:22:15,840
 And then the last item is on the new business action items, obviously we still have a couple

374
00:22:15,840 --> 00:22:21,040
 of items that are still on here, one for solid waste, one for DME.

375
00:22:21,040 --> 00:22:25,360
 And then as you know, the governor did call it a special session.

376
00:22:25,360 --> 00:22:30,440
 And even though there was no specific item on his agenda for electric, I can tell you

377
00:22:30,440 --> 00:22:31,440
 that there is a hearing.

378
00:22:31,440 --> 00:22:37,720
 I think the hearing is actually today that's being had on various electric-related issues.

379
00:22:37,720 --> 00:22:41,400
 And so we're going to wait until probably the end of the legislative session to come

380
00:22:41,400 --> 00:22:47,600
 back to you and kind of give you a synopsis of all the activities and any impacts that

381
00:22:47,600 --> 00:22:48,880
 we may have on the utilities.

382
00:22:48,880 --> 00:22:52,760
 But with that, if there's any questions on these items or if there's something else that

383
00:22:52,760 --> 00:22:55,720
 you'd like to be added on there, just let me know.

384
00:22:55,720 --> 00:22:56,720
 Okay.

385
00:22:56,720 --> 00:22:57,720
 Thank you.

386
00:22:57,720 --> 00:22:58,720
 Yes, Berman.

387
00:22:58,720 --> 00:23:03,400
 Do we have someone monitoring the bills that might potentially affect?

388
00:23:03,400 --> 00:23:04,400
 Yes, ma'am.

389
00:23:04,400 --> 00:23:09,480
 So we have, the city has a contract with two lobbyists, Jackson Walker on the general government

390
00:23:09,480 --> 00:23:14,280
 side that handles the majority of the city and then we have focus advocacy that handles

391
00:23:14,280 --> 00:23:16,840
 just DME-related items.

392
00:23:16,840 --> 00:23:22,640
 And so there's certainly the lobbyists that are keeping in touch with what's going

393
00:23:22,640 --> 00:23:27,480
 on, but we have a number of different staff members across the city for DME.

394
00:23:27,480 --> 00:23:33,320
 Terry Nolte has been very active in that area for us and will continue to do that, not just

395
00:23:33,320 --> 00:23:37,360
 with the legislature, but also with the PUCT and RCOT as well.

396
00:23:37,360 --> 00:23:38,360
 Thank you.

397
00:23:38,360 --> 00:23:39,360
 Yes, ma'am.

398
00:23:39,360 --> 00:23:40,360
 All right.

399
00:23:40,360 --> 00:23:42,700
 Then we're on to concluding items.

400
00:23:42,700 --> 00:23:47,880
 This is the opportunity to make any public comments or add something to a future agenda

401
00:23:47,880 --> 00:23:48,880
 item.

402
00:23:48,880 --> 00:23:51,920
 Does anybody have something?

403
00:23:51,920 --> 00:23:56,400
 I'd like to welcome Devin Taylor to the board and maybe just tell us a little bit about

404
00:23:56,400 --> 00:23:57,400
 yourself.

405
00:23:57,400 --> 00:23:58,400
 Sure.

406
00:23:58,400 --> 00:23:59,400
 Thank you.

407
00:23:59,400 --> 00:24:00,400
 And how you got into this.

408
00:24:00,400 --> 00:24:03,840
 So I'm Devin Taylor, newly appointed today to the board.

409
00:24:03,840 --> 00:24:08,120
 I grew up in Denton County and graduated from Ryan High School and raising a family here

410
00:24:08,120 --> 00:24:15,320
 in Denton and I look forward to serving our community and working with this board toward

411
00:24:15,320 --> 00:24:19,880
 long-term sustainability, reliability and quality of services as our city continues

412
00:24:19,880 --> 00:24:21,360
 to grow.

413
00:24:21,360 --> 00:24:23,920
 And I'm really excited to be here.

414
00:24:23,920 --> 00:24:24,920
 Welcome.

415
00:24:24,920 --> 00:24:25,920
 Okay.

416
00:24:25,920 --> 00:24:28,000
 The last item is our work session.

417
00:24:28,000 --> 00:24:32,160
 Receive a report and hold a discussion and give staff direction regarding the water,

418
00:24:32,160 --> 00:24:38,640
 wastewater, drainage, solid waste, electric and customer service fiscal year 2021-2022,

419
00:24:38,640 --> 00:24:43,400
 preliminary budget capital improvement program and five-year financial forecasts.

420
00:24:43,400 --> 00:24:46,440
 Good morning, Chair, PB members, Nick Vinson, Assistant Director of Finance.

421
00:24:46,440 --> 00:24:50,880
 Let me get the presentation pulled up really quick.

422
00:24:50,880 --> 00:24:51,880
 And welcome, Mr. Taylor.

423
00:24:51,880 --> 00:24:58,480
 We're definitely excited you're here to talk about the budget with us.

424
00:24:58,480 --> 00:25:08,640
 All right, before we get started, a brief introduction.

425
00:25:08,640 --> 00:25:11,360
 So I'm going to walk through the utility budget presentation.

426
00:25:11,360 --> 00:25:15,560
 After I get done, Crystal Foster, the customer service manager, can present her presentation.

427
00:25:15,560 --> 00:25:19,760
 So we're definitely excited that she's here with us today to present her budget.

428
00:25:19,760 --> 00:25:20,760
 She's done a great job.

429
00:25:20,760 --> 00:25:22,640
 And our staff, this fiscal year, putting it together.

430
00:25:22,640 --> 00:25:28,960
 So we're excited about that.

431
00:25:28,960 --> 00:25:32,240
 A little bit of history for the PB members that may not have been here last week, and

432
00:25:32,240 --> 00:25:35,800
 we did, or I guess it was two weeks ago, we did walk through the preliminary budget for

433
00:25:35,800 --> 00:25:37,520
 each of the utilities.

434
00:25:37,520 --> 00:25:41,640
 We looked at the operational information forum, what the goals and accomplishments were for

435
00:25:41,640 --> 00:25:46,280
 this previous year and this upcoming year, what the forecast looks like from the operational

436
00:25:46,280 --> 00:25:57,720
 standpoint and the capital standpoint, and then what those future steps are.

437
00:25:57,720 --> 00:26:01,560
 So the water financial assumptions, what we do, we typically tell the PB and the city

438
00:26:01,560 --> 00:26:07,440
 council how we do the revenue forecast from a volume standpoint and an expense standpoint.

439
00:26:07,440 --> 00:26:11,200
 So the volume forecast for the water utility, we currently do have a 2% growth forecast

440
00:26:11,200 --> 00:26:12,680
 in the out years.

441
00:26:12,680 --> 00:26:18,240
 We are looking at that 100 coal ranch development that Mr. Watts had mentioned earlier, starting

442
00:26:18,240 --> 00:26:19,240
 the fiscal year 2023.

443
00:26:19,240 --> 00:26:25,400
 So these utility performance do include financials from the operating standpoint and revenue standpoint

444
00:26:25,400 --> 00:26:26,400
 for that development.

445
00:26:26,400 --> 00:26:32,600
 Revenue is the 2% growth in the forecasted years, consistent with that volume forecast.

446
00:26:32,600 --> 00:26:37,400
 On the expense side, we currently do have a 3% growth forecast in the out years for expenses.

447
00:26:37,400 --> 00:26:41,160
 And then supplemental requests, and for any PB members that may not know, supplemental

448
00:26:41,160 --> 00:26:44,080
 requests are new packages that the utility is requesting.

449
00:26:44,080 --> 00:26:47,720
 So these could be new people, new initiatives the department wants to accomplish this coming

450
00:26:47,720 --> 00:26:53,240
 fiscal year, that we do consider those supplemental packages, that we do consider those separately.

451
00:26:53,240 --> 00:26:58,120
 For the water utilities, these did total $413,000.

452
00:26:58,120 --> 00:27:04,520
 And then these requests are for increased materials costs, employee licenses, fire hydrant,

453
00:27:04,520 --> 00:27:10,580
 and line location services.

454
00:27:10,580 --> 00:27:14,160
 So the water tenure forecast, I know there's a lot of numbers on this page, so I'm going

455
00:27:14,160 --> 00:27:15,860
 to walk through it fairly slowly.

456
00:27:15,860 --> 00:27:18,800
 We did walk through it two weeks ago, but I want to make sure all the PB members are

457
00:27:18,800 --> 00:27:21,260
 familiar with what you're looking at.

458
00:27:21,260 --> 00:27:23,700
 So what we do is we group the revenues up here at the top.

459
00:27:23,700 --> 00:27:25,640
 You can see the water revenues.

460
00:27:25,640 --> 00:27:28,560
 We are currently in fiscal year 2021.

461
00:27:28,560 --> 00:27:32,920
 And the city's fiscal year does run from October 1st to September 30th of each year.

462
00:27:32,920 --> 00:27:35,760
 So we are about three quarters the way through the current fiscal year.

463
00:27:35,760 --> 00:27:39,000
 So we are currently in 2021's fiscal year.

464
00:27:39,000 --> 00:27:45,160
 You can see we had $49 million in revenues, $52.9 million in expenses.

465
00:27:45,160 --> 00:27:48,520
 So the adopted budget that was approved by both the PB and City Council this year had

466
00:27:48,520 --> 00:27:51,680
 use of reserves of $3.9 million.

467
00:27:51,680 --> 00:27:53,820
 We are forecasting coming a little bit better than that.

468
00:27:53,820 --> 00:27:59,600
 So you can see our planned revenues of $48.7, with the expenses coming in at $51.5.

469
00:27:59,600 --> 00:28:04,640
 So actually only using about $2.8 million in reserves.

470
00:28:04,640 --> 00:28:08,480
 The preliminary budget, or what we're here talking to you today about, is in this column

471
00:28:08,480 --> 00:28:09,480
 right here.

472
00:28:09,480 --> 00:28:13,540
 We currently have revenues forecasted at $52.2 million.

473
00:28:13,540 --> 00:28:14,840
 No planned use of reserves.

474
00:28:14,840 --> 00:28:20,520
 You can see the use of reserves in this pinkish tin column right here, or this row.

475
00:28:20,520 --> 00:28:25,840
 Expenses of $51.5, with a surplus or a net income of $686,000.

476
00:28:25,840 --> 00:28:29,580
 So I did want to walk you down to the bottom of the page a little bit and explain some

477
00:28:29,580 --> 00:28:31,280
 of these other numbers.

478
00:28:31,280 --> 00:28:33,920
 You can see the Indian Water Fund balance.

479
00:28:33,920 --> 00:28:37,340
 So what this fund balance simply is, this is the operating reserve that this fund has

480
00:28:37,340 --> 00:28:42,020
 on hand in case something was to happen from an operational standpoint or a rate standpoint

481
00:28:42,020 --> 00:28:44,560
 to help minimize that impact to the rate base.

482
00:28:44,560 --> 00:28:47,840
 So definitely want to point that out to the PEB members.

483
00:28:47,840 --> 00:28:52,960
 Ending this upcoming fiscal year, we'd have about $20.2 million in that reserve.

484
00:28:52,960 --> 00:28:57,680
 The targets, so we do have a target for this utility, the minimum of 120 days, with a maximum

485
00:28:57,680 --> 00:28:58,680
 of 180 days.

486
00:28:58,680 --> 00:29:04,600
 So that minimum equates to about $16.5 million, with that maximum being $24.8.

487
00:29:04,600 --> 00:29:08,720
 A couple other numbers on this page I want to point out to you, the impact fee capital

488
00:29:08,720 --> 00:29:09,720
 reserve.

489
00:29:09,720 --> 00:29:13,840
 We currently have $9 million segregated into that account, and we'll talk a little bit

490
00:29:13,840 --> 00:29:15,720
 about that here in just a second.

491
00:29:15,720 --> 00:29:19,320
 The impact fee reserve, this is the rest of the impact fee money that's available.

492
00:29:19,320 --> 00:29:23,480
 If something was to come up with growth and growth was to stop, we can mitigate some of

493
00:29:23,480 --> 00:29:25,800
 that impact to the rate base.

494
00:29:25,800 --> 00:29:29,040
 Development plan lines, these are from big developments coming into the community, and

495
00:29:29,040 --> 00:29:33,480
 we're currently looking at these funds and how we can use these moving forward.

496
00:29:33,480 --> 00:29:36,640
 So going back up the page here, a couple of things I want to point out to you is when

497
00:29:36,640 --> 00:29:41,600
 you get out here into the future year, starting in fiscal year 2024 through 2027, you can

498
00:29:41,600 --> 00:29:48,760
 see we do have the net income, so about $800,000 in 2024, $5.5 million in 2025, and $4 million

499
00:29:48,760 --> 00:29:52,480
 in '26, and then $1.3 million in '27.

500
00:29:52,480 --> 00:29:56,400
 So we are working to build up that fund balance as we get out there in the future years, and

501
00:29:56,400 --> 00:30:01,360
 really ramping up to help offset that cost of that lake expansion that's coming up in

502
00:30:01,360 --> 00:30:03,640
 2027, 2028.

503
00:30:03,640 --> 00:30:09,120
 So when you see the increase from 16.5 to 21.3, that is that lake expansion project

504
00:30:09,120 --> 00:30:11,320
 at Lake Ray Roberts, about $90 million.

505
00:30:11,320 --> 00:30:14,880
 So our thought process is to ramp up that operating reserve to help offset that debt

506
00:30:14,880 --> 00:30:17,120
 service.

507
00:30:17,120 --> 00:30:20,600
 Going back down here to the impact fee capital reserve, that $9 million I pointed out to

508
00:30:20,600 --> 00:30:23,960
 you earlier, it does go away in 2024.

509
00:30:23,960 --> 00:30:29,580
 The reason for that is we do plan to cash fund the design of that lake expansion project.

510
00:30:29,580 --> 00:30:39,400
 So $90 million for construction, about $9 billion for the design of that project.

511
00:30:39,400 --> 00:30:40,400
 Assumptions for wastewater.

512
00:30:40,400 --> 00:30:41,560
 I don't have to read each one of these to you.

513
00:30:41,560 --> 00:30:43,160
 This is basically the same as water.

514
00:30:43,160 --> 00:30:47,720
 We have the 2% growth forecast on the volume side, the 2% growth forecast on the revenues.

515
00:30:47,720 --> 00:30:52,840
 Expenses, we have the 3% growth forecast in the out years, and those supplemental packages,

516
00:30:52,840 --> 00:30:58,120
 those new initiatives this utility is looking to do is about $701,000.

517
00:30:58,120 --> 00:31:03,000
 Those initiatives do make up of material costs, employee licenses, fire hydrant maintenance,

518
00:31:03,000 --> 00:31:09,280
 and some line location and street cut dollars.

519
00:31:09,280 --> 00:31:11,360
 So 10-year forecast for wastewater is very similar.

520
00:31:11,360 --> 00:31:14,920
 The only differences is mostly just the numbers and the color on the page.

521
00:31:14,920 --> 00:31:18,660
 So this one is in orange just to make it stand out from water.

522
00:31:18,660 --> 00:31:23,360
 So in fiscal year 2021, this is the adopted budget that we're currently in right now.

523
00:31:23,360 --> 00:31:33,120
 You can see 31.2 million or 31.1, 37.1 in revenues, and then 36.9 in expenses, so 292,000

524
00:31:33,120 --> 00:31:34,120
 positive.

525
00:31:34,120 --> 00:31:37,920
 So basically, we did have a balanced budget this current fiscal year that we're in.

526
00:31:37,920 --> 00:31:46,080
 Ending this year, you can see we have 37.1 in revenues, 36.4 in expenses, about $700,000

527
00:31:46,080 --> 00:31:47,760
 positive in net income.

528
00:31:47,760 --> 00:31:52,200
 So this reserve, this fund is definitely looking good this fiscal year.

529
00:31:52,200 --> 00:31:56,200
 The preliminary 2022, moving into this year's column that we're talking about now, and ultimately

530
00:31:56,200 --> 00:31:58,480
 we'll seek your approval for next month.

531
00:31:58,480 --> 00:32:04,800
 We have revenue of $38.6 million, that makes that number right here, and then $37.9 million

532
00:32:04,800 --> 00:32:11,840
 in expenses, about $653,000 in net income, with the ending fund balance by $15.7 million.

533
00:32:11,840 --> 00:32:13,480
 And then the targets are right here below.

534
00:32:13,480 --> 00:32:18,640
 So you can see the minimum is 100 days, with the maximum being 140 days, so that minimum

535
00:32:18,640 --> 00:32:25,200
 equates to about 11.5 as a value, and then $16.2 million on the maximum.

536
00:32:25,200 --> 00:32:29,400
 We do have an impact fee reserve in the wastewater fund, similar to water, and it's currently

537
00:32:29,400 --> 00:32:30,400
 $9.5 million.

538
00:32:30,400 --> 00:32:34,360
 And then we have a drainage reserve we call out separate, and we'll talk about drainage

539
00:32:34,360 --> 00:32:38,640
 here shortly, and a development plan line just for those large developments coming into

540
00:32:38,640 --> 00:32:39,640
 the community.

541
00:32:39,640 --> 00:32:44,080
 So we are looking at that million dollars, and how can we best utilize it in this utility.

542
00:32:44,080 --> 00:32:46,680
 In the future years, I do want to point out a couple of things, a little bit different

543
00:32:46,680 --> 00:32:51,360
 than the other utilities on water in the 10-year forecast, we were not showing any rate increases

544
00:32:51,360 --> 00:32:56,480
 for the entire 10-year period in wastewater, starting in fiscal year 2029, so it is several

545
00:32:56,480 --> 00:32:58,020
 years out still.

546
00:32:58,020 --> 00:33:02,280
 We do have some 1% rate increases plugged in in 2029 and 2030.

547
00:33:02,280 --> 00:33:06,320
 So we do anticipate within the 10-year period that this utility will be some rate increases

548
00:33:06,320 --> 00:33:07,320
 in the future.

549
00:33:07,320 --> 00:33:12,320
 So I just want to make sure we pointed that out to the PVB, and put that on your radar.

550
00:33:12,320 --> 00:33:17,080
 So this is a drainage 10-year forecast.

551
00:33:17,080 --> 00:33:21,320
 Drainage is ultimately a department, or an HBU, is what we call an HBU in the finance

552
00:33:21,320 --> 00:33:23,120
 department of wastewater.

553
00:33:23,120 --> 00:33:27,280
 This also rolls up into the proforma that you just saw a minute ago, but drainage is

554
00:33:27,280 --> 00:33:31,800
 supported, or the drainage operation within wastewater is supported by drainage revenue

555
00:33:31,800 --> 00:33:33,080
 in the community.

556
00:33:33,080 --> 00:33:37,800
 So residents and commercial businesses pay those drainage fees, those impervious services

557
00:33:37,800 --> 00:33:39,200
 into this fund.

558
00:33:39,200 --> 00:33:44,360
 So fiscal year 2021 is the current budget that we're in, about $5.9 million in revenues,

559
00:33:44,360 --> 00:33:46,260
 $5.9 million in expenses.

560
00:33:46,260 --> 00:33:51,080
 The majority of their budget is made up of channel rehab maintenance, and what that is,

561
00:33:51,080 --> 00:33:55,200
 the drainage channels that you see around the community is maintaining those, erosion,

562
00:33:55,200 --> 00:33:56,560
 mowing those, and so forth.

563
00:33:56,560 --> 00:33:59,840
 So the majority of the activity in this fund is for that purpose.

564
00:33:59,840 --> 00:34:06,840
 So preliminary budget, about $5.6 million in expenses.

565
00:34:06,840 --> 00:34:11,120
 Solid waste financial assumptions, very similar to the other utilities, we try to keep it

566
00:34:11,120 --> 00:34:14,280
 as consistent as possible when looking at the growth in the community.

567
00:34:14,280 --> 00:34:17,560
 Usually a resident or business comes in, they need water, wastewater, and solid waste service,

568
00:34:17,560 --> 00:34:19,680
 so the growth is pretty much the same.

569
00:34:19,680 --> 00:34:23,160
 On the revenue side, we have the 2% growth forecast in the out years.

570
00:34:23,160 --> 00:34:26,120
 We do have some anticipated wholesale agreements that are going to end in fiscal year 2023.

571
00:34:26,120 --> 00:34:30,040
 I'll talk about those shortly for some of the new PEB members that you'll know.

572
00:34:30,040 --> 00:34:34,480
 The Hunter Cole Ranch development does start showing up in 2023, and then we did put a

573
00:34:34,480 --> 00:34:38,600
 note on here for any PEB members that may not remember, or maybe you did, and the sale

574
00:34:38,600 --> 00:34:41,760
 construction in the current fiscal year, we did cash fund that development.

575
00:34:41,760 --> 00:34:48,160
 So it was moved from 2022 to 2021, we actually cash funded $6.5 million of that sale.

576
00:34:48,160 --> 00:34:51,520
 So great accomplishment with this fund, just want to make sure we pointed that out to the

577
00:34:51,520 --> 00:34:52,520
 board.

578
00:34:52,520 --> 00:34:57,000
 Supplemental request, currently this fund has 282,000 supplemental requests, made up

579
00:34:57,000 --> 00:35:03,080
 of 4.5 FTEs, was a field service worker too, heavy equipment operator, roll-off truck driver,

580
00:35:03,080 --> 00:35:10,500
 field services supervisor, and an intern, making up that .5.

581
00:35:10,500 --> 00:35:15,360
 So we showed a five-year forecast for the solid waste fund, very similar to water and

582
00:35:15,360 --> 00:35:18,160
 wastewater, and I apologize, it's a little bit blurry, but we'll try to see it the best

583
00:35:18,160 --> 00:35:19,160
 we can here.

584
00:35:19,160 --> 00:35:24,760
 So in 2021, the current adopted budget that we're in, you can see revenues of $39.8 million,

585
00:35:24,760 --> 00:35:32,440
 numbers right here, with expenses of $44.1, so we did have an adopted budget of $4.3 million

586
00:35:32,440 --> 00:35:34,480
 in reserve usage.

587
00:35:34,480 --> 00:35:38,760
 The council and the PBB both did approve a 5% rate decrease in the current fiscal year

588
00:35:38,760 --> 00:35:43,520
 for residential customers, equated about a dollar, I believe six cents a month was the

589
00:35:43,520 --> 00:35:44,520
 decrease.

590
00:35:44,520 --> 00:35:48,920
 You can see the estimate we were planning to come in, about $38.5 million in revenues,

591
00:35:48,920 --> 00:35:52,720
 $43.4 million in expenses, about $4.8 million in reserve usage.

592
00:35:52,720 --> 00:35:59,920
 So really close to the budget, just a little bit more than what we originally adopted.

593
00:35:59,920 --> 00:36:04,200
 Moving into the preliminary budget, you can see their revenues of $39.8, with expenses

594
00:36:04,200 --> 00:36:09,800
 of $37.1 or $2, positive income of $2.7 million.

595
00:36:09,800 --> 00:36:14,640
 The majority of this swing of not using reserves is that sale development that I mentioned

596
00:36:14,640 --> 00:36:15,640
 earlier.

597
00:36:15,640 --> 00:36:19,080
 We're not building that sale this upcoming year, so we're maintaining that revenue within

598
00:36:19,080 --> 00:36:21,840
 the fund to offset expenses.

599
00:36:21,840 --> 00:36:25,960
 Moving down the pages, we're not forecasting rate increases or decreases for this utility.

600
00:36:25,960 --> 00:36:30,840
 We do have an operating fund balance about $8.9 million finishing this upcoming year

601
00:36:30,840 --> 00:36:34,440
 of 2022, adopted by PB and city council.

602
00:36:34,440 --> 00:36:38,360
 The targets are down here in this pink, you can see the minimum of 5.2 with the maximum

603
00:36:38,360 --> 00:36:40,200
 of 6.7 million.

604
00:36:40,200 --> 00:36:44,800
 So we are well within that target and actually stay within that target in each of the five

605
00:36:44,800 --> 00:36:46,960
 year period.

606
00:36:46,960 --> 00:36:49,640
 Moving back up to the front of the top of the page here, I want to point this out to

607
00:36:49,640 --> 00:36:50,820
 the board really quick.

608
00:36:50,820 --> 00:36:55,420
 The wholesale agreements that I pointed out earlier, this forecast does not contemplate

609
00:36:55,420 --> 00:36:56,420
 those being renewed.

610
00:36:56,420 --> 00:37:01,160
 If the PB or city council gives us direction or gives, you know, Brian or Soloway's direction

611
00:37:01,160 --> 00:37:05,200
 to renew those contracts, this financial picture will change when we bring it back to you for

612
00:37:05,200 --> 00:37:06,920
 the 2023 budget discussion.

613
00:37:06,920 --> 00:37:11,320
 So just keep that in mind if those agreements are renewed, this entire financial picture

614
00:37:11,320 --> 00:37:19,840
 changes because you can't see that 6.2 million going away in 2023.

615
00:37:19,840 --> 00:37:23,680
 The electric financial assumptions, so I'll walk through these a little bit different

616
00:37:23,680 --> 00:37:28,800
 than water, wastewater, revenue and expenses, the average load growth of 1.5 million, looking

617
00:37:28,800 --> 00:37:30,480
 at the load within the community.

618
00:37:30,480 --> 00:37:35,200
 The T cost, allowable rate of return on investment, this is what Cassie had mentioned earlier,

619
00:37:35,200 --> 00:37:39,680
 this is still pending, so we have made some preliminary assumptions within the financial

620
00:37:39,680 --> 00:37:40,680
 forecast.

621
00:37:40,680 --> 00:37:47,160
 In fiscal year 2022, we're currently projecting 28.04% return on those transmission assets.

622
00:37:47,160 --> 00:37:52,760
 We do decrease this to 13.5% starting in fiscal year 2023, it's really to be proactive and

623
00:37:52,760 --> 00:37:54,480
 be conservative within this utility.

624
00:37:54,480 --> 00:37:58,480
 So we are making an assumption it's going to go down.

625
00:37:58,480 --> 00:38:02,800
 The return on investment of 6%, so this utility does pay a return on investment to the general

626
00:38:02,800 --> 00:38:06,280
 fund that ultimately makes its way to the streets fund that was increased a few years

627
00:38:06,280 --> 00:38:12,440
 ago when COVID hit I guess about a year and a half ago, it increased from 3.5% to 6%.

628
00:38:12,440 --> 00:38:16,280
 It is scheduled to decrease to 3.5% starting in fiscal year 2023.

629
00:38:16,280 --> 00:38:20,680
 So it will not stay at 6% unless we're directed for it to stay there.

630
00:38:20,680 --> 00:38:23,720
 Some more of the uncertainties that Cassie had mentioned earlier, the summer revenue

631
00:38:23,720 --> 00:38:27,080
 forecast, we'll bring this back to you in December once we get through the hot period

632
00:38:27,080 --> 00:38:31,800
 of July and August and really see how this fund performs and how the debt performs.

633
00:38:31,800 --> 00:38:35,480
 The transmission cost or T cost revenue that I mentioned earlier, that cost of service

634
00:38:35,480 --> 00:38:41,880
 study that was mentioned earlier, and then the potential TMP mine sales also noted here.

635
00:38:41,880 --> 00:38:47,480
 The reserve levels, so our currently policy is 60 to 75 days, which is 16 to 21%.

636
00:38:47,480 --> 00:38:50,880
 We did bring a conversation forward to the PBN City Council.

637
00:38:50,880 --> 00:38:54,160
 When the winter storm had hit a couple months ago talking about this reserve requirement

638
00:38:54,160 --> 00:38:58,880
 for each of the utilities, the financial recommendation was to leave it alone for water, wastewater,

639
00:38:58,880 --> 00:39:00,840
 and solid waste, but to increase it for electric.

640
00:39:00,840 --> 00:39:05,760
 So that was the guidance we've gotten so far from the PBN City Council and if that continues

641
00:39:05,760 --> 00:39:08,640
 to be the guidance, we'll bring that back forward to you as part of the budget adoption

642
00:39:08,640 --> 00:39:09,640
 process.

643
00:39:09,640 --> 00:39:13,280
 So look forward to that coming forward here in the next couple of months.

644
00:39:13,280 --> 00:39:18,160
 Supplemental request, so the DME or electric fund includes about $400,000 in supplemental

645
00:39:18,160 --> 00:39:19,160
 request.

646
00:39:19,160 --> 00:39:24,000
 The major items is a senior business intelligent analyst, a line designer, and meteorologist

647
00:39:24,000 --> 00:39:25,000
 services.

648
00:39:25,000 --> 00:39:27,600
 If you have a question of those, Tony can speak to it or Terry Nolte or anybody that's

649
00:39:27,600 --> 00:39:31,240
 here if you have questions regarding the supplemental packages.

650
00:39:31,240 --> 00:39:33,720
 The five-year forecast for the electric utility.

651
00:39:33,720 --> 00:39:40,920
 So in 2021, you can see adopted revenues is $231.4 million in revenues, about $231.1 million

652
00:39:40,920 --> 00:39:41,920
 in expenses.

653
00:39:41,920 --> 00:39:45,040
 So we basically had a break-even budget in the current budget year.

654
00:39:45,040 --> 00:39:47,160
 We didn't use any reserves or anything.

655
00:39:47,160 --> 00:39:48,160
 You can see the estimate.

656
00:39:48,160 --> 00:39:51,720
 We have estimated revenue of $344.8 million.

657
00:39:51,720 --> 00:39:55,960
 That is above what we are budgeted, mainly due to the deck running during the winter

658
00:39:55,960 --> 00:40:00,600
 storm and the revenue that it brought in to offset that purchase power expense.

659
00:40:00,600 --> 00:40:04,080
 Expenses of $337 million, which is above the budget.

660
00:40:04,080 --> 00:40:07,060
 We did bring a budget amendment forward for the electric utility earlier this year to

661
00:40:07,060 --> 00:40:10,080
 offset those purchase power expenses of the winter storm also.

662
00:40:10,080 --> 00:40:13,880
 So that is the reason it's above the budget, just want to make sure we pointed that out.

663
00:40:13,880 --> 00:40:18,520
 So we showed net income, about $7.8 million is what we're forecasting, and that does anticipate

664
00:40:18,520 --> 00:40:20,240
 the rest of the summer months.

665
00:40:20,240 --> 00:40:27,120
 In 2022, the preliminary budget, you can see we have $227.5 million in revenues, about

666
00:40:27,120 --> 00:40:32,200
 $226.6 million in expenses, so just about $940,000 in net income.

667
00:40:32,200 --> 00:40:35,920
 No rate increases are currently being proposed, as Cassie had mentioned.

668
00:40:35,920 --> 00:40:40,440
 Once we get through these hotter months in the summer, we'll bring it back to discussion

669
00:40:40,440 --> 00:40:44,380
 to you in December and talk about future rate increases if they're needed.

670
00:40:44,380 --> 00:40:49,440
 So the current reserve target is $119.2 million, or $119.2 million is currently what we have

671
00:40:49,440 --> 00:40:51,720
 in the operating reserve and electric.

672
00:40:51,720 --> 00:40:55,120
 What we did is we broke out the current reserve and the proposed.

673
00:40:55,120 --> 00:40:58,440
 So under the proposed reserve targets, we'll bring back forward to you or continue to bring

674
00:40:58,440 --> 00:41:00,480
 back forward to you in the budget discussions.

675
00:41:00,480 --> 00:41:06,080
 The minimum would be $104.2 million, with the maximum being $156.3 million.

676
00:41:06,080 --> 00:41:09,040
 So we are within that target in the current year.

677
00:41:09,040 --> 00:41:14,320
 As we go in the future years, and you can see we do dip below that target to $72.5 million.

678
00:41:14,320 --> 00:41:18,040
 So that would really feed into that conversation regarding future rate increases as we come

679
00:41:18,040 --> 00:41:19,840
 back to PAB.

680
00:41:19,840 --> 00:41:24,680
 The current reserve target, what was currently in place is the minimum is $36.2, but the

681
00:41:24,680 --> 00:41:26,400
 maximum $47.5.

682
00:41:26,400 --> 00:41:31,200
 So simply the current operating reserve is within the target that's currently in place.

683
00:41:31,200 --> 00:41:37,840
 But if we were to change that target in the future years, we would be below it.

684
00:41:37,840 --> 00:41:40,120
 The capital budgets, we'll go through these quickly.

685
00:41:40,120 --> 00:41:43,960
 And then definitely if you need more detail, in your backup today, there was what we consider

686
00:41:43,960 --> 00:41:45,480
 a mini budget book.

687
00:41:45,480 --> 00:41:49,720
 What that is, it's just an operational line item budget for each of the departments within

688
00:41:49,720 --> 00:41:50,720
 each of the utilities.

689
00:41:50,720 --> 00:41:56,280
 So for water, wastewater, solid waste, and electric, and also included their capital projects.

690
00:41:56,280 --> 00:41:57,880
 Definitely let us know if you have questions on that.

691
00:41:57,880 --> 00:42:01,080
 So this is the water five-year capital plan.

692
00:42:01,080 --> 00:42:03,800
 We do summarize it by different debt issuances.

693
00:42:03,800 --> 00:42:09,840
 So in fiscal year 2022, for example, you can see we have $41 million in debt issuance plan

694
00:42:09,840 --> 00:42:11,380
 for this utility.

695
00:42:11,380 --> 00:42:15,240
 Revenue funding, so it's funded by that rate revenue of the operating fund, about $9.9

696
00:42:15,240 --> 00:42:16,240
 million.

697
00:42:16,240 --> 00:42:19,440
 Aiding construction, $265,000.

698
00:42:19,440 --> 00:42:24,720
 Impact fee funding, so revenue funding of impact fee eligible projects, about $3.5 million.

699
00:42:24,720 --> 00:42:28,760
 Also some vehicle replacement, a cash fund in those vehicles within this utility of $300,000.

700
00:42:28,760 --> 00:42:39,680
 So total capital program in 2022 is about $55.1 million in the upcoming year.

701
00:42:39,680 --> 00:42:42,400
 These are some of the major projects within water.

702
00:42:42,400 --> 00:42:45,600
 This is not an exhaustive list, but we did want to provide you the major projects that

703
00:42:45,600 --> 00:42:46,600
 are coming up.

704
00:42:46,600 --> 00:42:50,640
 So you can see the north missed transmission lines of $14.9 million.

705
00:42:50,640 --> 00:42:52,840
 The Ray Roberts capacity rerate of 11.

706
00:42:52,840 --> 00:42:56,880
 You can see 2019 bond election projects of $3.2 million.

707
00:42:56,880 --> 00:43:00,280
 That's to support those bond elections or the street segments that were approved by

708
00:43:00,280 --> 00:43:02,320
 voters a couple of years ago.

709
00:43:02,320 --> 00:43:05,720
 Annual field service replacements, so existing line replacements.

710
00:43:05,720 --> 00:43:10,400
 And Lake Lizzle treatment plan expansion of $2.5 million.

711
00:43:10,400 --> 00:43:14,360
 So total of these projects is about $38.5 million, so making up about three quarters

712
00:43:14,360 --> 00:43:18,840
 or 80% of that total capital plan.

713
00:43:18,840 --> 00:43:21,200
 Wastewater five-year capital projects, same thing here.

714
00:43:21,200 --> 00:43:25,880
 You can see debt funded projects for the wastewater utility, very similar to water, $40.1 million

715
00:43:25,880 --> 00:43:28,380
 in projects for the debt side.

716
00:43:28,380 --> 00:43:32,520
 Revenue funding about $5 million, aid in construction of $82,000.

717
00:43:32,520 --> 00:43:34,480
 Impact fee funding a little bit less.

718
00:43:34,480 --> 00:43:38,560
 Eligible projects are not as many on the wastewater side, so about $250,000 in impact fee eligible

719
00:43:38,560 --> 00:43:39,560
 projects.

720
00:43:39,560 --> 00:43:43,560
 And the vehicle replacement, they have a few more vehicles being replaced, about $1.4 million.

721
00:43:43,560 --> 00:43:51,960
 So $46.9 million in total capital projects in fiscal year 2022.

722
00:43:51,960 --> 00:43:56,760
 And if I need to slow down or go back, just let me know, as fast as I can, get through

723
00:43:56,760 --> 00:43:57,760
 the presentation here.

724
00:43:57,760 --> 00:44:02,320
 Solid waste handling, so for the wastewater utility, they have a $14 million project coming

725
00:44:02,320 --> 00:44:03,320
 up this year.

726
00:44:03,320 --> 00:44:04,320
 It's phase one.

727
00:44:04,320 --> 00:44:06,760
 The design completion is July 2021.

728
00:44:06,760 --> 00:44:10,640
 Hickory Creek, the wastewater treatment plant land acquisition of $5.8 million, something

729
00:44:10,640 --> 00:44:12,480
 that's currently being worked on now.

730
00:44:12,480 --> 00:44:18,000
 Hickory Creek Interceptor 3 of $4 million, 2019 bond elections of being consistent across

731
00:44:18,000 --> 00:44:21,760
 the city with those projects, and then the field service replacements.

732
00:44:21,760 --> 00:44:23,760
 And then you can see the wastewater master plan.

733
00:44:23,760 --> 00:44:28,280
 One note I will make on the 2019 bond election program, one thing staff is doing differently

734
00:44:28,280 --> 00:44:32,120
 this year than we have in the past, is we're having cross-departmental meetings just to

735
00:44:32,120 --> 00:44:36,280
 ensure that what's in the wastewater and water utility is consistent with what engineering

736
00:44:36,280 --> 00:44:37,280
 is budgeting.

737
00:44:37,280 --> 00:44:40,160
 So if engineering's planning to replace the street, we're also on the water wastewater

738
00:44:40,160 --> 00:44:41,720
 side anticipating the same thing.

739
00:44:41,720 --> 00:44:46,880
 So we just want to make sure we're consistent across the city.

740
00:44:46,880 --> 00:44:47,880
 This is CIP budget.

741
00:44:47,880 --> 00:44:49,160
 I'm sorry, this one is not labeled.

742
00:44:49,160 --> 00:44:51,320
 This is for the solid waste utility.

743
00:44:51,320 --> 00:44:54,880
 You can see they do issue different types of debt issuances.

744
00:44:54,880 --> 00:44:59,820
 So 20-year debt, about $2 million, five-year debt, about $483,000.

745
00:44:59,820 --> 00:45:04,080
 Revenue funding, about $40,000, and vehicle replacement, by far, is their largest usual

746
00:45:04,080 --> 00:45:07,360
 capital project of the year, unless there's cell development, about $4.2 million.

747
00:45:07,360 --> 00:45:12,120
 And then you can see how it breaks down by different, just different type of projects.

748
00:45:12,120 --> 00:45:16,840
 You can see street, structural, vehicles, and then building construction, about a million.

749
00:45:16,840 --> 00:45:21,080
 So total, 6.7.

750
00:45:21,080 --> 00:45:26,040
 The electric utility, so you can see where the projects fit into the different categories.

751
00:45:26,040 --> 00:45:28,180
 You can see fiscal year 2022 in this column.

752
00:45:28,180 --> 00:45:33,400
 Some of the major categories that you see is distribution substations, distribution transformers,

753
00:45:33,400 --> 00:45:37,640
 feeder extensions and improvements, new residential and commercial.

754
00:45:37,640 --> 00:45:40,120
 And then, of course, we've got the street lighting, and it's been talked about the last

755
00:45:40,120 --> 00:45:44,120
 couple of fiscal years, and then the electric relocations.

756
00:45:44,120 --> 00:45:46,120
 So distribution total, $34.4 million.

757
00:45:46,120 --> 00:45:51,440
 Then you can see some transmission lines and transmission substations for $24.5.

758
00:45:51,440 --> 00:45:55,920
 So total capital projects, and all this added up is $58.9 million.

759
00:45:55,920 --> 00:45:59,040
 We then take that number and divide how it's going to be funded through the utility.

760
00:45:59,040 --> 00:46:05,840
 It's about $4.4 million in aid and construction, $52.9 million in CO issuances, and then $1.7

761
00:46:05,840 --> 00:46:09,680
 million in revenue funding from the rate revenue within the utility.

762
00:46:09,680 --> 00:46:14,120
 So the five-year capital total is $215.9 million.

763
00:46:14,120 --> 00:46:18,080
 I think the question was asked last time we were at PUB about, you know, does the PUB

764
00:46:18,080 --> 00:46:20,120
 adopt each one of these five-year capital plans?

765
00:46:20,120 --> 00:46:21,120
 The answer is no.

766
00:46:21,120 --> 00:46:25,400
 The only thing we're looking for your adoption in August or your approval for is 2022.

767
00:46:25,400 --> 00:46:27,320
 So just keep that in mind when you look at this five-year plan.

768
00:46:27,320 --> 00:46:33,320
 It's for planning purposes, but you will only adopt the 2022 budget.

769
00:46:33,320 --> 00:46:38,180
 So next steps, the DME presentation is scheduled to go to City Council on July the 20th.

770
00:46:38,180 --> 00:46:41,280
 Water and wastewater will be at the end of this month on July the 27th, along with solid

771
00:46:41,280 --> 00:46:42,280
 waste.

772
00:46:42,280 --> 00:46:47,240
 July 26th, probably should have put that before the 27th, but PUB will be looking for your

773
00:46:47,240 --> 00:46:51,100
 approval for the budget and start the rate conversation.

774
00:46:51,100 --> 00:46:56,360
 So the next meeting that PUB has will bring back the budgets for your approval to take

775
00:46:56,360 --> 00:46:59,880
 at the City Council, and then we'll start those rate conversations and start talking

776
00:46:59,880 --> 00:47:02,120
 about the rate structure itself.

777
00:47:02,120 --> 00:47:06,280
 August 2nd is the big City Council budget workshop where all the budgets in the city

778
00:47:06,280 --> 00:47:07,680
 will be talked about.

779
00:47:07,680 --> 00:47:12,200
 And then August 23rd, we'll come back to the PUB for that final rate approval.

780
00:47:12,200 --> 00:47:18,240
 And then September 21st, the City Council will adopt the budget, the tax rate, the utility

781
00:47:18,240 --> 00:47:24,120
 rates, and the capital plan for the utilities and the general fund.

782
00:47:24,120 --> 00:47:27,880
 And I'll take this presentation down and address any questions, and if there's operational

783
00:47:27,880 --> 00:47:29,440
 questions, the directors are here, too.

784
00:47:29,440 --> 00:47:32,560
 Just feel free to ask us anything you have for us today.

785
00:47:32,560 --> 00:47:33,560
 Questions?

786
00:47:33,560 --> 00:47:42,880
 You must have done a very good job.

787
00:47:42,880 --> 00:47:50,760
 Thank you.

788
00:47:50,760 --> 00:48:09,880
 Madam Chair, Board Members, Krista Foster, Customer Service Manager, and I'm here today

789
00:48:09,880 --> 00:48:17,920
 to present the customer service budget for FY21-22.

790
00:48:17,920 --> 00:48:21,400
 So first, I'm going to give you an overview of our division.

791
00:48:21,400 --> 00:48:27,480
 We have 46 wonderful, dedicated members of our team, and this is just a quick layout

792
00:48:27,480 --> 00:48:31,280
 of that group.

793
00:48:31,280 --> 00:48:34,800
 As we move into talking about our budget, the first thing we're going to look at is

794
00:48:34,800 --> 00:48:35,800
 accomplishments.

795
00:48:35,800 --> 00:48:37,280
 I'm not going to read every one of these to you.

796
00:48:37,280 --> 00:48:39,200
 I believe that each of you can read.

797
00:48:39,200 --> 00:48:42,620
 But I do want to capitalize at least a couple of items off of each slide.

798
00:48:42,620 --> 00:48:46,400
 The first thing that we're very proud of in customer service over the last year is we

799
00:48:46,400 --> 00:48:51,320
 have taken on agency assistance referrals for customers who have trouble paying their

800
00:48:51,320 --> 00:48:52,640
 utility bills.

801
00:48:52,640 --> 00:48:58,200
 So at this point in time, staff will identify that need and ask the customer if they would

802
00:48:58,200 --> 00:49:04,960
 like to have a referral to the agency, we'll fill out the basic screening intake paperwork,

803
00:49:04,960 --> 00:49:09,920
 provide that to the agency, we do a follow-up email to the customer with all of the requirements

804
00:49:09,920 --> 00:49:14,940
 that they're going to need to meet, and we give them a protected time window that their

805
00:49:14,940 --> 00:49:19,080
 services will not see an eruption because they're in that process.

806
00:49:19,080 --> 00:49:20,800
 And we're working closely with the agency.

807
00:49:20,800 --> 00:49:24,560
 So if the agency is saying, "Hey, it's going to take a little longer," they're giving

808
00:49:24,560 --> 00:49:28,400
 us a contact to say, "Please continue to take care of this customer."

809
00:49:28,400 --> 00:49:30,620
 So we're very proud of that process.

810
00:49:30,620 --> 00:49:35,560
 We actually have incorporated this so that the follow-up emails can be sent either in

811
00:49:35,560 --> 00:49:37,480
 English or in Spanish.

812
00:49:37,480 --> 00:49:40,700
 Additionally, we've offered translation services.

813
00:49:40,700 --> 00:49:45,080
 I was very surprised that that was something with as diverse a community as Denton is with

814
00:49:45,080 --> 00:49:48,880
 the universities and things that we didn't offer.

815
00:49:48,880 --> 00:49:51,400
 Translation services by phone, so we now do.

816
00:49:51,400 --> 00:49:56,560
 So if someone calls in and English is not their first language, we can identify that,

817
00:49:56,560 --> 00:50:02,960
 call a translator, and process a three-way call so that we can provide better assistance.

818
00:50:02,960 --> 00:50:06,320
 This is just a slide just because I wanted to brag on my guys.

819
00:50:06,320 --> 00:50:10,800
 We have in our Microsoft Teams group, we have a superstar channel, and that's where we do

820
00:50:10,800 --> 00:50:11,800
 shout-outs.

821
00:50:11,800 --> 00:50:16,440
 If customers say something great about people, the reps will go back in and say, "Hey, shout-out

822
00:50:16,440 --> 00:50:17,440
 to so-and-so.

823
00:50:17,440 --> 00:50:20,020
 This is what the customers are saying about you."

824
00:50:20,020 --> 00:50:27,760
 And I know that as board members, you get to hear sometimes the less productive conversations,

825
00:50:27,760 --> 00:50:33,560
 but we want you to know that there are plenty of positives out there.

826
00:50:33,560 --> 00:50:39,840
 So again, we have accomplishments, nope, I went wrong way, our goals for next year.

827
00:50:39,840 --> 00:50:44,240
 Customer service has some pretty lofty goals coming up over the next year.

828
00:50:44,240 --> 00:50:49,680
 The first of those is we are now actively working on the 311 implementation.

829
00:50:49,680 --> 00:50:51,880
 We are in the discovery process.

830
00:50:51,880 --> 00:50:59,480
 We are in the contract negotiation phase for a customer service software, customer relationship

831
00:50:59,480 --> 00:51:05,440
 management software, and we'll be implementing that over the next year.

832
00:51:05,440 --> 00:51:11,040
 Additionally, we will be coming back to you soon and talking about changing a payment

833
00:51:11,040 --> 00:51:12,040
 vendor.

834
00:51:12,040 --> 00:51:16,040
 We've had some problems with one of our payment vendors, and we've identified, we're putting

835
00:51:16,040 --> 00:51:22,320
 out an RFP to see if we can provide better services there, and we are in contract negotiations

836
00:51:22,320 --> 00:51:27,080
 for a new customer portal that will allow greater functionality.

837
00:51:27,080 --> 00:51:32,280
 Customers will be able to do things like truly set up and terminate services online.

838
00:51:32,280 --> 00:51:36,680
 Currently we offer terminations and moves, but they're self-service for the customer,

839
00:51:36,680 --> 00:51:39,840
 but they come in as an email and we have to process them manually.

840
00:51:39,840 --> 00:51:44,080
 So we'll be moving into things that will provide better automation and better efficiencies

841
00:51:44,080 --> 00:51:50,580
 and much greater scope of service for our customers.

842
00:51:50,580 --> 00:51:56,060
 Process improvements, clearly we've got a lot of them, but the one that we're this year

843
00:51:56,060 --> 00:52:01,740
 most proud of is that we implemented remote reconnections.

844
00:52:01,740 --> 00:52:05,840
 So when a customer's service is interrupted and they call and take care of that payment,

845
00:52:05,840 --> 00:52:11,300
 we can actually go into the system and process it to have them turned on in 30 minutes or

846
00:52:11,300 --> 00:52:12,760
 less.

847
00:52:12,760 --> 00:52:17,240
 That is for 90 plus percent probably of our customers at this point.

848
00:52:17,240 --> 00:52:21,000
 Occasionally electronics have their issues and we have to actually send someone to a

849
00:52:21,000 --> 00:52:26,640
 site, but by and large we're getting those customers turned on faster than ever.

850
00:52:26,640 --> 00:52:31,120
 Next year we're going to be working, just like I mentioned before, on more automation

851
00:52:31,120 --> 00:52:37,160
 of our self-service and better efficiencies for customers and staff.

852
00:52:37,160 --> 00:52:38,380
 These are a few of our metrics.

853
00:52:38,380 --> 00:52:42,720
 These are some metrics that we use to gauge how effective are we fiscally.

854
00:52:42,720 --> 00:52:47,260
 So you can see that's what's our overhead cost versus the revenue that we're collecting

855
00:52:47,260 --> 00:52:54,040
 for the organization, our collection rate versus what becomes uncollectible debt, self-service

856
00:52:54,040 --> 00:52:58,560
 adoption, because if we can get customers to be able to do some of the simpler things

857
00:52:58,560 --> 00:53:03,420
 on their own, it frees staff to dedicate the time that's necessary for those customers

858
00:53:03,420 --> 00:53:08,400
 who really have those complex problems, and then first contact resolution.

859
00:53:08,400 --> 00:53:12,520
 We'll talk about that in just another moment going forward, because these are some of the

860
00:53:12,520 --> 00:53:16,800
 metrics that we use to gauge where are we and where are we going.

861
00:53:16,800 --> 00:53:21,020
 So the first thing you'll notice is we're seeing almost a 10% change over the last four

862
00:53:21,020 --> 00:53:23,920
 years just in the number of accounts.

863
00:53:23,920 --> 00:53:28,100
 Over the last ten years, you know, it seems like it's a small amount, and I think it was

864
00:53:28,100 --> 00:53:34,260
 only maybe 54,000 ten years ago, but that small change because we produce monthly bills

865
00:53:34,260 --> 00:53:40,200
 means that billing staff is currently producing 170,000 more bills than they were ten years

866
00:53:40,200 --> 00:53:41,200
 ago.

867
00:53:41,200 --> 00:53:45,060
 So it's a lot of change even though it seems like a small number.

868
00:53:45,060 --> 00:53:50,260
 The other is you can see that our call center volume has gone up dramatically.

869
00:53:50,260 --> 00:53:58,020
 We're currently at the end of May, over 180,000 calls already this year with the busiest months

870
00:53:58,020 --> 00:53:59,260
 left to go.

871
00:53:59,260 --> 00:54:05,200
 We're anticipating reaching or exceeding 250,000 calls this year.

872
00:54:05,200 --> 00:54:07,900
 So we've seen a lot of change there.

873
00:54:07,900 --> 00:54:13,340
 Again, first call resolution, and we also track our very satisfied and very dissatisfied

874
00:54:13,340 --> 00:54:16,820
 customer bases for telling us how effective we are.

875
00:54:16,820 --> 00:54:21,340
 First call resolution is obviously we don't want someone to have to call us 100 times,

876
00:54:21,340 --> 00:54:27,460
 but the very satisfied, very dissatisfied, these are the people who drive our image in

877
00:54:27,460 --> 00:54:28,740
 the community.

878
00:54:28,740 --> 00:54:32,140
 And these numbers, all three of these are customer reported.

879
00:54:32,140 --> 00:54:35,860
 At the end of every contact, the customer is given the opportunity to participate in

880
00:54:35,860 --> 00:54:37,500
 a three-question survey.

881
00:54:37,500 --> 00:54:44,060
 So this is what our customers are saying about our effectiveness.

882
00:54:44,060 --> 00:54:45,060
 All right.

883
00:54:45,060 --> 00:54:49,180
 So as we move into the budget highlights, first we are an internal service fund.

884
00:54:49,180 --> 00:54:55,620
 So this is just a breakout of where is the money coming from within the organization

885
00:54:55,620 --> 00:54:57,620
 to fund our budget.

886
00:54:57,620 --> 00:55:00,580
 And I'll give you just a moment.

887
00:55:00,580 --> 00:55:06,220
 I don't want to go through all of them, but give you a second to be able to look.

888
00:55:06,220 --> 00:55:10,700
 And then I'm going to give you our actual budget, our estimates and preliminaries.

889
00:55:10,700 --> 00:55:16,500
 So the first thing with our budget is you'll notice that the budgeted amount versus our

890
00:55:16,500 --> 00:55:19,940
 estimate do not match.

891
00:55:19,940 --> 00:55:25,180
 During the pandemic, we end with raising all the call volumes that you saw that have gone

892
00:55:25,180 --> 00:55:26,180
 up.

893
00:55:26,180 --> 00:55:33,860
 We had to shoulder $483,000 in unbudgeted costs between additional assistance that we're

894
00:55:33,860 --> 00:55:38,680
 providing people and some of the staffing changes that we had to make.

895
00:55:38,680 --> 00:55:45,460
 Of that, we look like we are maybe going to end up having to come back for a budget amendment,

896
00:55:45,460 --> 00:55:47,420
 but it will not be for $483,000.

897
00:55:47,420 --> 00:55:51,020
 It'll be somewhere in the $200,000 range.

898
00:55:51,020 --> 00:55:54,200
 All right.

899
00:55:54,200 --> 00:56:02,020
 Then again, the FTE summary, we have 46 headcount.

900
00:56:02,020 --> 00:56:09,420
 And so because 311 and CRM is a little complicated, it's complicated for people because 311 can

901
00:56:09,420 --> 00:56:13,580
 look very differently depending on where you go and who set it up.

902
00:56:13,580 --> 00:56:17,520
 So we wanted to take some time to walk you through this as we're bringing in a supplemental

903
00:56:17,520 --> 00:56:22,660
 request for the actual contact center side of the things that are going to have to happen

904
00:56:22,660 --> 00:56:24,220
 with that.

905
00:56:24,220 --> 00:56:27,640
 The first thing was just to give you a good definition, this is the only thing I'm going

906
00:56:27,640 --> 00:56:34,580
 to redirect and that's that a 311 center utilizes centralized staff and customer relationship

907
00:56:34,580 --> 00:56:41,100
 software to streamline access to city services, increase departmental efficiencies and provide

908
00:56:41,100 --> 00:56:45,060
 citizens a single point of contact for all of their needs.

909
00:56:45,060 --> 00:56:49,540
 Basically, you'll see below that decentralized structure, that's kind of where we are today.

910
00:56:49,540 --> 00:56:54,220
 A resident has to understand and know how the city operates in order to find the correct

911
00:56:54,220 --> 00:56:55,220
 division.

912
00:56:55,220 --> 00:56:58,380
 A lot of times that involves a lot of transfers.

913
00:56:58,380 --> 00:57:02,860
 So what we're going to be moving to is the 311 center.

914
00:57:02,860 --> 00:57:08,300
 We're going to utilize this customer relationship software to make sure that we can have real

915
00:57:08,300 --> 00:57:10,780
 time communication to the different divisions.

916
00:57:10,780 --> 00:57:15,220
 So you have one point of contact that can take talk to that customer, enter their needs

917
00:57:15,220 --> 00:57:21,780
 into the appropriate work order system and get them the resolutions that they need.

918
00:57:21,780 --> 00:57:22,780
 How does it work?

919
00:57:22,780 --> 00:57:24,760
 This is kind of that layout of that structure.

920
00:57:24,760 --> 00:57:31,220
 We have multiple contact channels that will come through one set of staff who deal with

921
00:57:31,220 --> 00:57:35,540
 talking to customers when we're placing information into the system, we're going to be placing

922
00:57:35,540 --> 00:57:40,900
 that into the CRM software and it's going to automatically break things out into the

923
00:57:40,900 --> 00:57:42,880
 areas they need to go with.

924
00:57:42,880 --> 00:57:46,380
 We can also have milestones.

925
00:57:46,380 --> 00:57:51,140
 So as these things go through the process, it can send that customer back notification

926
00:57:51,140 --> 00:57:55,180
 that this is what's happened, the status of your work order has changed and this is where

927
00:57:55,180 --> 00:57:56,180
 we are.

928
00:57:56,180 --> 00:57:57,900
 This has now been completed.

929
00:57:57,900 --> 00:58:00,420
 That is difficult to do currently.

930
00:58:00,420 --> 00:58:05,560
 And then it gives us a great wealth of information so that we can just make good business decisions

931
00:58:05,560 --> 00:58:09,400
 as we move forward.

932
00:58:09,400 --> 00:58:10,700
 So this is our timeline.

933
00:58:10,700 --> 00:58:16,420
 We started working on some of the development as far back as the summer of 2019.

934
00:58:16,420 --> 00:58:21,220
 We had a little bit of a lag as we did some process stuff and had a pandemic.

935
00:58:21,220 --> 00:58:25,240
 But we've now gotten into the procurement phase for the CRM.

936
00:58:25,240 --> 00:58:28,780
 We have a finalist and we're in contract negotiations.

937
00:58:28,780 --> 00:58:32,580
 We've already begun mapping processes with all of the different divisions and identified

938
00:58:32,580 --> 00:58:36,800
 some of the groups that will be coming in as part of our phase one development.

939
00:58:36,800 --> 00:58:42,260
 And we're planning to have our kickoff later this summer or early fall.

940
00:58:42,260 --> 00:58:47,940
 We're expecting the implementation to be done sometime during the next fiscal year.

941
00:58:47,940 --> 00:58:50,420
 And this is what it costs.

942
00:58:50,420 --> 00:58:57,020
 So what we're looking for in our supplemental, the CRM software has already been debt funded

943
00:58:57,020 --> 00:58:59,720
 and it is paid for.

944
00:58:59,720 --> 00:59:02,820
 We have our consultants that we have on board helping us with that.

945
00:59:02,820 --> 00:59:07,520
 This is for the cost of some of the positions that are going to be necessary to be able

946
00:59:07,520 --> 00:59:14,460
 to bring in those additional calls as well as getting our equipment so that we have the

947
00:59:14,460 --> 00:59:17,320
 correct number of computers and phones and things of that nature.

948
00:59:17,320 --> 00:59:21,940
 So the one-time cost is $84,700.

949
00:59:21,940 --> 00:59:25,020
 That includes a contingency of $74,000.

950
00:59:25,020 --> 00:59:29,380
 Just in case, timelines may tweak just a little bit.

951
00:59:29,380 --> 00:59:39,580
 But the total cost for next fiscal year, $373,510, with an ongoing recurring cost of $505,000.

952
00:59:39,580 --> 00:59:44,340
 The reason that you're seeing it a little bit lower in year one is because we're prorating

953
00:59:44,340 --> 00:59:48,940
 salaries because we're not anticipating needing these people October 1.

954
00:59:48,940 --> 00:59:53,500
 So we've prorated those salaries.

955
00:59:53,500 --> 00:59:54,500
 And that is it.

956
00:59:54,500 --> 01:00:03,780
 People will be happy to answer any questions.

957
01:00:03,780 --> 01:00:09,740
 So what departments are going to be part of phase one implementation of 311?

958
01:00:09,740 --> 01:00:15,020
 Well, we didn't include them in this just in case something changes, but right now what

959
01:00:15,020 --> 01:00:21,260
 we're looking at for phase one are animal services simply because of the huge call volume.

960
01:00:21,260 --> 01:00:24,480
 And it's very difficult for them to maintain.

961
01:00:24,480 --> 01:00:31,340
 Something else we're looking at right now is community improvement and all utility infrastructure

962
01:00:31,340 --> 01:00:37,000
 areas because those are the areas where customers really have to have a degree in city government

963
01:00:37,000 --> 01:00:39,140
 before they know where they're trying to go.

964
01:00:39,140 --> 01:00:43,540
 We're taking all those things that tend to overlap one another so that we can try to

965
01:00:43,540 --> 01:00:46,100
 make things as easy as possible for customers.

966
01:00:46,100 --> 01:00:48,380
 And does that include like streets?

967
01:00:48,380 --> 01:00:53,300
 It would include things like streets, water, wastewater.

968
01:00:53,300 --> 01:00:55,580
 We already do utilities, so we do them.

969
01:00:55,580 --> 01:01:02,060
 But it's going to have like water, wastewater, engineering, the other part of public works.

970
01:01:02,060 --> 01:01:05,660
 So it's all those infrastructure groups.

971
01:01:05,660 --> 01:01:06,660
 And will this work?

972
01:01:06,660 --> 01:01:07,660
 Oh, sorry.

973
01:01:07,660 --> 01:01:08,660
 I'm sorry.

974
01:01:08,660 --> 01:01:09,660
 Permitting.

975
01:01:09,660 --> 01:01:10,660
 I'm just...

976
01:01:10,660 --> 01:01:11,660
 Not at this time.

977
01:01:11,660 --> 01:01:12,660
 Okay.

978
01:01:12,660 --> 01:01:15,940
 Permitting is a little different because it requires you to interpret code.

979
01:01:15,940 --> 01:01:21,260
 And when you have someone that's that broad a generalist, code interpretation tends to

980
01:01:21,260 --> 01:01:23,500
 be a little bit much.

981
01:01:23,500 --> 01:01:25,540
 Yeah, a little difficult.

982
01:01:25,540 --> 01:01:26,540
 Sorry.

983
01:01:26,540 --> 01:01:27,540
 Go ahead.

984
01:01:27,540 --> 01:01:32,580
 And will the system work with or replace the current engaged Netton app?

985
01:01:32,580 --> 01:01:33,580
 Yes.

986
01:01:33,580 --> 01:01:38,740
 The CRM software will actually have a fully functional mobile app.

987
01:01:38,740 --> 01:01:42,780
 And as a matter of fact, any of the things that we build for customer service as knowledge

988
01:01:42,780 --> 01:01:46,980
 based articles or any division that's using it can build knowledge based articles that

989
01:01:46,980 --> 01:01:49,900
 have both public and private information.

990
01:01:49,900 --> 01:01:53,060
 Any of that public information can be on our website.

991
01:01:53,060 --> 01:01:57,100
 So we have one document that provides the public a place that they can search a knowledge

992
01:01:57,100 --> 01:01:58,260
 base as well.

993
01:01:58,260 --> 01:02:03,900
 You can place in links so that if they read the knowledge base article and say, oh yeah,

994
01:02:03,900 --> 01:02:07,620
 this is my issue, and it's something that they can create a work order for themselves,

995
01:02:07,620 --> 01:02:09,980
 the link can be right there in the knowledge base article.

996
01:02:09,980 --> 01:02:10,980
 Nice.

997
01:02:10,980 --> 01:02:16,900
 And is there a plan to transition from engaged Netton app to the future app?

998
01:02:16,900 --> 01:02:17,900
 There will be a plan.

999
01:02:17,900 --> 01:02:20,980
 I don't know that we're quite to that place yet, because we're going to be learning a

1000
01:02:20,980 --> 01:02:24,060
 little bit about this software as we get into the implementation phase.

1001
01:02:24,060 --> 01:02:28,780
 Right now we're really doing all of that ground work and doing that discovery of what are

1002
01:02:28,780 --> 01:02:32,300
 all the things that we're going to need to replace from the engaged Netton?

1003
01:02:32,300 --> 01:02:34,300
 What are we going to be transitioning?

1004
01:02:34,300 --> 01:02:37,580
 How are we going to interface with these different work order applications?

1005
01:02:37,580 --> 01:02:42,460
 So we're in that discovery phase at the moment.

1006
01:02:42,460 --> 01:02:44,980
 I have a question.

1007
01:02:44,980 --> 01:02:50,300
 So how will this affect existing city staff, whether that be customer service or whatever

1008
01:02:50,300 --> 01:02:51,300
 else?

1009
01:02:51,300 --> 01:02:56,020
 You know, the only thing it will affect with my staff is that we're going to have a broader

1010
01:02:56,020 --> 01:03:01,060
 base of information that we're going to be supplying and much better tools to do it.

1011
01:03:01,060 --> 01:03:05,020
 If we find that we're moving a tremendous amount of call load and we're taking three

1012
01:03:05,020 --> 01:03:10,900
 people's worth of work out of a division, then we can look at moving staff there.

1013
01:03:10,900 --> 01:03:16,460
 Because that's obviously going to be our first goal before going out and adding new FTE to

1014
01:03:16,460 --> 01:03:17,460
 the budgets.

1015
01:03:17,460 --> 01:03:18,460
 Right?

1016
01:03:18,460 --> 01:03:20,900
 But we're going to be evaluating it as we go.

1017
01:03:20,900 --> 01:03:24,900
 So it should be nothing more than just really some changing and shuffling of staff.

1018
01:03:24,900 --> 01:03:28,820
 I have to say, I really appreciate the direction here.

1019
01:03:28,820 --> 01:03:32,420
 That's systematizing and automation is near and dear to my heart.

1020
01:03:32,420 --> 01:03:35,260
 I do a lot of that in my job.

1021
01:03:35,260 --> 01:03:36,860
 So I'm excited to see where this goes.

1022
01:03:36,860 --> 01:03:37,860
 Yes.

1023
01:03:37,860 --> 01:03:38,860
 I'm very excited.

1024
01:03:38,860 --> 01:03:40,980
 Is the training included in the budget as well?

1025
01:03:40,980 --> 01:03:41,980
 Is what?

1026
01:03:41,980 --> 01:03:42,980
 The training?

1027
01:03:42,980 --> 01:03:43,980
 The training?

1028
01:03:43,980 --> 01:03:44,980
 For the staff?

1029
01:03:44,980 --> 01:03:45,980
 Yes.

1030
01:03:45,980 --> 01:03:46,980
 Okay.

1031
01:03:46,980 --> 01:03:47,980
 Yeah.

1032
01:03:47,980 --> 01:03:48,980
 Okay.

1033
01:03:48,980 --> 01:03:52,500
 As a person who really likes the voice that I get, and I have an opportunity to talk with

1034
01:03:52,500 --> 01:04:00,620
 them many times, managing property, having utilities on and off and things done, it's

1035
01:04:00,620 --> 01:04:01,860
 great staff.

1036
01:04:01,860 --> 01:04:02,860
 They are friendly.

1037
01:04:02,860 --> 01:04:03,860
 They are helpful.

1038
01:04:03,860 --> 01:04:04,860
 Thank you.

1039
01:04:04,860 --> 01:04:05,860
 They take care of it.

1040
01:04:05,860 --> 01:04:08,380
 And I just can't say enough good about your department.

1041
01:04:08,380 --> 01:04:11,300
 We have some really great frontline representatives.

1042
01:04:11,300 --> 01:04:12,300
 You do.

1043
01:04:12,300 --> 01:04:15,500
 They're very dedicated and they work really hard.

1044
01:04:15,500 --> 01:04:20,020
 As a property manager, you're probably going to find that our new customer portal will

1045
01:04:20,020 --> 01:04:25,340
 be wonderful for you because it will allow you to be able to have, right off the get-go,

1046
01:04:25,340 --> 01:04:29,980
 all of your bills under the one login, and you'll be able to make a single payment for

1047
01:04:29,980 --> 01:04:30,980
 all of them.

1048
01:04:30,980 --> 01:04:31,980
 Wow.

1049
01:04:31,980 --> 01:04:32,980
 Yeah.

1050
01:04:32,980 --> 01:04:35,420
 Like I said, we have some very exciting things planned.

1051
01:04:35,420 --> 01:04:39,180
 Do you have training for customers?

1052
01:04:39,180 --> 01:04:42,780
 I promise this one is very, very user-friendly, very intuitive.

1053
01:04:42,780 --> 01:04:49,580
 I'll be excited for you guys to get to see it soon.

1054
01:04:49,580 --> 01:04:50,580
 Yeah.

1055
01:04:50,580 --> 01:04:51,580
 And your metrics are amazing.

1056
01:04:51,580 --> 01:04:52,580
 Thank you.

1057
01:04:52,580 --> 01:04:53,580
 We are very proud of them.

1058
01:04:53,580 --> 01:04:54,580
 Any other questions?

1059
01:04:54,580 --> 01:04:55,580
 All right.

1060
01:04:55,580 --> 01:04:56,580
 Thank you.

1061
01:04:56,580 --> 01:04:57,580
 Thank you.

1062
01:04:57,580 --> 01:04:58,580
 And that is it.

1063
01:04:58,580 --> 01:04:59,580
 Correct?

1064
01:04:59,580 --> 01:05:00,580
 All right.

1065
01:05:00,580 --> 01:05:01,580
 Okay.

1066
01:05:01,580 --> 01:05:07,340
 It is 10.05.

1067
01:05:07,340 --> 01:05:09,140
 Do we have emotion to adjourn?

1068
01:05:09,140 --> 01:05:10,140
 So moved.

1069
01:05:10,140 --> 01:05:11,140
 There you go.

1070
01:05:11,140 --> 01:05:11,140
 Adjourned.