Okay, it's 901 and we do have a quorum, so we're called to order the Public Utilities
Board for the City of Denton for Monday, July 26th, 2021.
Lee, can you hear us?
You're muted, Lee.
Yes, ma'am.
Okay.
Good morning.
Okay, great.
The first item is public comment period.
Does anybody present wish to speak?
Is there anybody on the line that wishes to speak?
No, Chair.
There are no virtual public comments.
Okay.
Thank you.
So then the first item is consent agenda.
Does a board member wish to pull either item A or B from the agenda?
Okay, seeing none, do we have a motion to approve consent agenda?
So moved.
Barbara moved.
Okay, and Karen seconded.
All in favor say aye.
Aye.
Okay, that carries.
Next item is consider approval of the July 12th, 2021 minutes.
Were there any changes or corrections?
Okay, do we have a motion?
Move approval.
Billy's moving approval.
Second?
Second.
That in seconds.
All in favor say aye.
Aye.
Abstain.
I was absent.
Okay.
Thank you, Karen.
I'm recommending the approval of the water fiscal year 2021-2022 operating in capital
budget.
Good morning, Chair, PB members, Nick Vinson, Assistant Director of Finance.
Happy to be in front of you again today to talk about the rates and the budgets.
I do have a presentation if someone has questions.
Otherwise, we're just looking for approval, Chair.
Questions?
All right, do we have a motion to approve?
Oh, Devin has a question.
Sorry.
Thank you.
Yes, sir.
So I was noticing that the minimum rates, the minimum revenues are going up by about
10%, but the volume metric are going up by 6% or 7%.
Is that, I was trying to understand how, is volume decreasing, like is conservation increasing
or new users using less water?
So that's a great question.
Volume usage is continuing to increase in the city with growth.
One thing we've been continuing to see and we're actually talking about in the rate presentation
is that the average consumption for residential customers actually decreased over the years.
So it used to be 9,200 gallons, now it's 7,600 gallons.
And we'll talk a little bit about that in the rate presentation during the work session
presentation.
Okay.
Thank you.
Other questions?
Do we have a motion to approve?
So moved.
And a second?
Second.
All in favor, say aye.
Aye.
Okay.
That one carries.
Consider recommending the approval of the wastewater fiscal year 2021-2022 operating
and capital budget.
Same deal.
Are there any questions?
If you have any questions, I'd be happy to answer them.
Questions of anyone?
Okay.
Do we have a motion to approve?
Move approval.
Thank you, Barbara.
And a second?
Second.
Ben seconds.
All in favor say aye.
Aye.
No nays.
That one carries.
Consider recommending the approval of the solid waste fiscal year 2021-2022 operating and
capital budgets.
Same thing.
Any questions?
Do we have a motion to approve?
So moved.
That one carries.
Devin seconds.
How's that?
All in favor say aye.
Aye.
Motion carries.
Consider recommending the approval of the electric fund fiscal year 2021-2022 operating
and capital budgets.
Any questions?
All right.
Seeing none, do we have a motion to approve?
I'll move approval.
Thank you, Billy.
And a second?
Second.
Was that you, Ben?
Lee.
Okay.
Thank you, Lee.
All in favor say aye.
Aye.
That one carries.
Consider recommending the approval of the customer service fiscal year 2021-2022 operating budget.
Any questions?
I had a quick question.
I was noticing -- let me see what page it is.
There was revenue going from zero to like 200,000 in subsequent years.
It was called Other.
I was wondering what the Other covered.
Let me pull the presentation up really quick and we can see.
It's the first page of the presentation, bottom line.
I'm sure you've already told us, but I've slept since then.
That's okay.
Let me look here and see.
Should be sharing.
Just on the highlights page.
I would have to look -- this may be some late fees and some different things within customer
service, but I can get you an answer to that.
I don't have that answer right now.
I don't know exactly what exactly that revenue is.
Okay.
And it goes up every year, so there's something.
We definitely can get you an answer to that.
Something going on on that.
Thanks, Nick.
And I know Mr. Ryback had a question, too.
Go ahead, Lee.
Yes, thank you.
I do not recall, unfortunately, covering the customer service department budget previously,
and I'll take responsibility for that.
So the customer service budget is drawn from the budgets of the Other departments.
Is that a correct assumption?
Mr. Ryback, if I heard your question correctly, how is the customer service budget funded?
Was that your question?
Okay.
I will.
So great question, and I don't know if I've mentioned this in our previous presentation
or not.
For the PB members that are new, customer service used to be part of the water utility.
Two or three years ago, we actually got direction to separate this fund for transparency.
Since then, we've continued to bring the customer service fund back to the public utilities
board separately.
So you do see that presentation in addition to the utilities, and another reason is mainly
is because the utilities fund that department.
You know, 90% of the budget of customer service is made up from the utilities.
Does that answer your question, Mr. Ryback?
And this one was presented at the last board meeting.
It does in a way, yes.
And this one was presented at the last board meeting when you were on vacation, so you
didn't forget it.
Okay, well, that being the case, all of these dollar notes I see are basically drawn from
the various departments and their budgets.
So the customer service entails the cost of handling billings that is entailed the cost
of answering the phone.
Could you give me a quick thumbnail sketch of that?
Yeah, absolutely.
So customer service, you're exactly correct.
So customer service receives the calls for the city.
As far as a detailed operation definition of what all they do is they do a lot of things
and a tremendous job.
Krista Foster, the customer service manager is on the phone.
Krista, are you on the phone to answer Mr. Ryback's question?
I am.
And so let me make sure that I'm understanding what we're wanting.
We're wanting to understand what customer service does in relation to the utilities.
Okay.
So the customer service department is made up of three key areas.
One of them is the utility customer service, which is the call center, the front lobby
and our cash operations window where we deal with some of the receipt of payments.
We also have our collections division that deals with ensuring revenue balances are accurate
that deals with making sure that we're bringing revenues back in a timely manner.
And then we also have our billing department, which produces the monthly bills for each
of the billed utilities, as well as for many of the miscellaneous bills that are sent for
other parts of the city.
So we help with everything from bill production to bill collection to assisting people in
understanding what is on their bill, assisting people with understanding how to maybe potentially
identify leaks and things like that, setting up pay arrangements, taking payments and doing
service starts and stops.
And then we also take all of the mainline phone calls for city hall.
So if someone just has a general question, those come into us as well.
And then as we expand in the future, we will be expanding that to be a full 311 where we
start bringing in other divisions.
Does that answer the question that you have?
Yes, ma'am.
It's answering the phone and it's also collections and billing.
So that would fall under the gathering the revenue for the departments.
Correct.
That is all part of customer service.
You're so very welcome.
Other questions?
That's all I have, Madam Chairman.
Thank you, ma'am.
Thank you.
Okay.
Do we have a motion to approve?
So moved.
Second.
Thank you, Lise.
And Barbara seconded.
All in favor say aye.
Aye.
Opposed?
That one carries.
Management reports.
Madam Chair, members of the PUB, so just our standard future agenda items that we have
here for you, obviously today you're considering the budget, we'll be bringing back some additional
information on the budget, certainly the rates you'll be discussing today.
The only item that you don't have for rates is on the electric rates.
We are working on that and we'll be bringing that back to you here very soon.
Also on the schedule for September 13th is a draft of kind of the much awaited comprehensive
solid waste management strategy.
That's something that you've had on your table for quite some time and solid waste
is ready to bring that back to you.
And then for our new business action items, we still have the two items on here that we're
certainly still working on and I just want to make sure that you know that we've not
forgotten and I'll let Mr. Ettsonoff know that I've not forgotten about him.
I did get an email from him this weekend and told him that we are working on getting him
that data.
Obviously, this legislative update is still kind of on hold.
We are working on potentially an informal staff report that we're going to send to
the council.
If we do that, we'll send it also to the PUB, but as you know, the special session
that the governor called is kind of on hold right now.
There may be another and so we still have that on here and we'll be providing that
to you as quickly as we can.
So with that, I'm happy to answer any questions on this or other new business items that you
may have.
Any questions?
Or new items?
No?
All right, then we go into concluding items.
This is the opportunity to have anything added to the agenda or take time to thank staff
for any other announcements.
Any concluding items?
All right, then we'll go into the work session.
Receive a report and hold a discussion and give staff direct direction on the proposed
water, wastewater, and solid waste rates for fiscal year 2021 and 2022.
Good morning again, Nick Benson, Assistant Director of Finance.
Let me get the presentation pulled up really quick.
See if I can talk a little bit more into the mic here where you can hear me.
Okay, so before we get started and kick it off, so we're going to talk about the water
rates today and solid waste.
We'll actually talk a little bit about wastewater.
We have one slide to cover the wastewater rate changes.
As Tony had mentioned, electric will not be discussed today.
Those rate conversations will come back forward to you later this year once we get through
the summer months and really understand how we're going to perform this summer and what
those rate changes Winter Storm URI did to the utility.
So talk a little bit about that more this year.
Before we get started, I just want to talk about some basic terms within the water rate
structure that you'll see throughout the presentation.
The first one being a facility charge, and this is a fixed charge charged to customers
every single month.
This is based on a meter size, so the majority of residential customers have a three quarter
inch meter.
We'll talk a little bit more about that here in a coming couple slides.
The volume charge is a monthly rate charge to customers based on the volume that they
use each month, and that will be the focus of today's conversation as we talk about the
water rate structure and what guidance you want to give us moving forward with that rate
structure itself.
A couple other terms, I won't read all of these, but you have WR, WW, WRW, and WCL,
which is the wholesale raw water pass through rate.
So cost of service history, I think some of the PV members are here.
We went through the cost of service results.
If not, I'll give you a brief summary of the recent cost of service study that we completed.
I'll say recent.
It's been about two years ago, a year and a half ago now, so definitely excited to have
that study.
There's a lot of tool internally in the finance department and the water utility.
So the last study was completed in 2014 prior to the one we just updated.
The one we just updated we contracted with Raftelis in 2019.
That study was officially finalized last fall.
I got a draft of the cost of service report a week or two ago, so we'll get that forward
to the PV and city council, the detail report, detail on all that cost of service results.
So that will be coming for the near future.
These studies are updated approximately over five years, so looking to update that study
again in 2024 or 2025, and then goals, you know, the cost of service goals is to establish
cost of service based rates, understand what those are, and to communicate them to the
governing bodies, ensure revenue stability, and then establish fair and equitable rates.
And of course, this little diagram on your right here talks about how it breaks down
water and sewer, looking at the cost of service model.
So this is a really high-level summary of that report I mentioned earlier.
This is what each service category is classified into within the water utility, so we break
it out by residential, commercial, irrigation, fire hydrant, and then you can see total retail,
and then of course wholesale at the bottom.
What I want to point out to the Public Utility Board is that residential is currently under
recovery about 6 percent, commercial is over recovering about 26.2 percent, irrigation
is under about 23.5, and then fire hydrant is about 6.1 under percent, or under recovery,
which is about $30,000, so across the industry, it is common for commercial to be over recovering
and residential to be under recovering, so when you see that, that's not something that's
uncommon across the industry, so I just want to point that out.
We put this together, just thought this was a great slide for the public and the Public
Utility Board to kind of really understand what things cost, so you can see an 8-ounce
glass of water is about .025 cents, I want to make sure we understand this is in cents
and not dollars, I want people to think of, you know, flushing your toilet, for example,
cost 65 cents, it's .65 cents, so just wanted to point that out.
Taking a shower, you can see down there in the minutes, 8-minute shower cost about 7
cents, so just kind of put that into perspective.
So before we get into the rate conversation, and Mr. Taylor, you had asked this question
earlier, we'll get to this bullet point in just a second about the average usage.
So the residential bill is made up of two charges each month, the facility charge, which
is that fixed fee based on the meter size, and the second component is that volume charge.
Currently, there are seasonal rates, meaning that there's a winter block structure and
a summer block structure, to talk a little bit about that to you, or with you, here shortly,
and some options to maybe do away with that to keep those bills from changing throughout
the year.
The average residential consumption decreased from 9,200 gallons to 7,600, so that is great
news.
That did not happen, of course, overnight.
That was a period of time, but we do continue to communicate conservation within the community.
The rate structure is set up such to incentivize it, so we are looking for your guidance today
to further that along in those conservation efforts.
Right now, currently, so the residential customers fits into the first tier, which is 0 to 15,000,
which is a fairly large tier.
We'll talk about that in a little while, and then seasonal rates, as I mentioned earlier,
are changed twice a year, so customer service goes in there and adjusts this volumetric
rate for customers twice a year, so it's not really consistent what customers could expect
to pay in the winter and summer, so we'll talk a little bit about that.
This was a result of the cost of service study, which is a great analysis, and I wanted to
share this with the group.
A couple of different things on here.
I know this is a pretty busy slide, but I'll draw your attention first right here to this
table that says current.
This is the current structure that's currently in place, so we have a 0 to 15,000-gallon
tier, we have a 15 to 30, a 30 to 50, and then an over 50,000-gallon tier.
One may ask, how does our customers break down into these tiers, and 89% of the customers
fit into the first tier, 0 to 15,000, with about 11% being over 15 to 50,000 gallons,
so about 11% of the bill distribution.
That's a little bit more, about 15% that you can see over here, but the bill distribution
for those bills going out is about 11%, is above 15,000 gallons, and that'll be important
here in just a second.
We get to the next slide, and we can flip back to this slide if you so deem necessary.
The proposed, we'll talk a little bit about this now, definitely talk about it in detail
in the next slide.
We are looking to introduce or get your thoughts on a new tier of 0 to 5,000 or 0 to 7,500.
The 0 to 7,500 is not on here, it's actually two options for the PV to consider, so really
just kind of narrowing down that first tier where it's not so wide.
Then this is the meter breakdown, as I mentioned earlier, the most common meter for residential
customers is the 3/4-inch meter, the second common being the 1-inch meter, so about 31,800
customers fit into the 3/4-inch meter.
Then this bar graph you see here just kind of shows you how customers break out on a
per-thousand-gallon usage basis per month, so you can see the majority of those customers
being anywhere from 0 to 16,000 or 17,000 gallons, so with the vast majority of them
being anywhere from 0 to 7, that's 7,600 average usage I mentioned earlier.
Nick?
Yes, ma'am.
Could you give me an example of an entity that would have a 1-inch, a 1.5 and 2?
I don't have that in front of me, Stephen Hay, the director of water is here, he may
have that, but it's probably something we'd have to follow up with you on, a different
type of business or a different type of residential property that would have that, I would suspect
to be someone maybe with a larger lot that does some irrigation, maybe they need a larger
meter to accommodate that usage, but that's something we'd definitely have to follow
up with you on, Mr. Russell, yeah, absolutely.
I'll write that question down really quick.
I have a question as well, I wonder, you mentioned something about 7,500 and 5,000, so what was
driving those choices between the two, and it looks like you only show the 5,000 on the
proposed change, so could you address those?
So what's driving the decrease from 9,200 to 7,600, that decrease in average usage?
That's your question, Mr. Rybak, I think it would be conservation communication, the city
communicating to customers to conserve water during those hot and dry periods, also energy
efficient appliances in your household, you know, toilets, for example, have the gallons
that they take to flush has actually decreased over the years, was that your question, Mr.
Rybak?
Well, I'm sorry, I'm having a little bit of trouble hearing your microphone there at the
podium, which I had earlier, but now that I have a question in the middle of this, I
can link that out, so what I'm asking is, you're showing us a proposed budget or proposed
rate structure at 5,000, you also considered 7,500 gallons as a cutoff.
So my question, I'm sorry, I don't think I expressed it very well, is what was the determinant
between choosing one or both of those, and you said there is a 7,500 gallon option, which
we don't have in this presentation currently, so I'm just curious what's driving those
choices that you're making or presenting on the rate spectrum, is that better?
That's absolutely, it's clear, thank you very much.
So there are two options, and we'll get into those in the next slide, it does show both
options.
So the 7,500 gallon option that you had mentioned is based on the average usage, so that average
usage being 7,600 with the thought that the majority of the customers could fit into that
first tier.
The second option of 5,000 gallons is basically the average usage in the winter months excluding
irrigation.
So it removes irrigation, it looks at more human consumption than it does irrigating
those lawns.
So that's where those two tier cutoffs came from.
One is from the average usage, and one is from the winter usage excluding irrigation.
Mr. Ibex, did I answer your question?
Yes, sir, thank you.
And I'll pull up the slide that'll show the 7,500 gallon chart here in just a second.
I want everybody to be sure to understand exactly what we're proposing and what feedback
you want to give us.
Okay, so we'll walk through this and we can spend as much time as we need to on this slide,
we can come back to it, of course.
So there's three different options, we're looking for feedback from you today.
We do have a recommendation of what staff recommends, but definitely if your feedback
is different, we will take that forward and present that to council tomorrow when this
presentation goes forward.
So option one is the current rate structure, if PB gives us the guidance, we would leave
the current rate structure in place, the rates wouldn't change, we would still have a winter
block and a summer block.
Those customers would see a rate change throughout the year, well, twice a year, their rate would
change for the volumetric rate.
The second option is a zero to 7,500 gallon tier, and as I mentioned, that is based on
the average consumption of 7,600, is where that 7,500 comes from.
In this option though, what we'll be looking to do is to simplify the residential bills,
is to combine the winter and summer rates, to create a combined volumetric rate.
This is something common in the industry that you see based on the feedback we receive from
our consultant during the cost of service study, so definitely want to get your feedback
on it today.
If you did this option, customers would see a $3.15 decrease per month.
Now what's important to note and what I want to point out we have on the next slide too,
each one of these options is revenue neutral to this utility, so if we do these rate options,
we're not going to see a rate revenue decrease for the water utility.
What will happen is that revenue loss from those lower tiers, so the lower tier customers
actually see a decrease of $3.15.
That is being made up in the higher tiers within this category, so that 11% that I mentioned
earlier, those 11% of customers that are over 15,000 gallons would actually see a rate increase.
So I want to be sure to point that out to the PVV because it's mentioned on the next
slide, but I want to be sure to point that out.
Option number three is a zero to 5,000 gallons, that 5,000 cutoff coming from that winter
average, excluding irrigation in the summer months.
Under this option, same thing, it would combine the winter and the summer rate into one block
or one combined rate, it wouldn't be seasonal anymore.
Under this option, customers with the average usage of $7,600 would see a $2.10 decrease
per month, so a little bit different structure.
Staff is recommending, it's why we have the red box, I'm sure you can gather, staff is
recommending option two, create a first tier from zero to 7,500 gallons.
So I have a few questions.
Go ahead.
I do too.
Go ahead.
See if you take mine.
So you're talking in averages and average bills, which means average customer has 12
bills a year, and average usage is 7,600 gallons.
What's like the median usage, that I think it might be more, median households might
be more applicable than the average, because you did this long tail with a big bump right
there at the end above 50,000.
I think that's a great question.
I don't have the median in front of me, I suspect of course it'd be above the 7,600,
but we could look at that and follow up with you, I don't have that today.
And then what are summer months and what are winter months?
It's, let's see here, it's May through October, if I'm not mistaken, that's no, hang on,
second April, May, it's November, December, January, February, because we extended with
URI.
Yeah, I don't have my rate book in front of me, I'd have to look back and see exactly
what months are.
I can get that for you.
But the summer months, of course in the summer block rate structure, I think it changes in
May if I'm not mistaken each year.
Is it six months summer, six months winter?
Six months cycles, that back you up, I think to, it would change like in November, December
time frame, take you through May, and then in May the block structure for summer come
into effect.
Yeah.
Thank you.
Okay.
And my questions are back then to the why option two versus option three.
I think about conserving water in the summertime.
I use water as awesome so that I'm not over irrigating my lawn.
So it tells me how much to irrigate and I adjust for that.
If we did option three, do you think that would encourage more people to watch how they're
over irrigating their lawns?
I walked through my neighborhood, it would have just rained two inches and everybody's
sprinklers are going off.
It's like, really, you can go in the garage and shut those off.
So that's just a thought.
Okay.
I see what you're saying because the average usage is 7,600 and the cut off would be 5,000.
Yes.
That would then be household use.
Yeah, absolutely.
So it's just one opinion.
That's definitely feedback and if that's the guidance we get from the PEB, we definitely
take that forward to council tomorrow, absolutely.
And I think if we move to median, what you'll see is the average is 7,600, but the median
is 4,500.
It's much higher.
Yeah.
So 80% of households would have no incentive to conserve and no impact at the 7,500 where
maybe at 5,000, maybe 45 or 50% of households would have no incentive.
If I could add to that, I think the second option would, though there's very few people
in that tail, they'd be very significantly affected by a much larger increase.
It would be.
So I think that's just something to consider as well.
Great feedback.
Anybody else have any questions?
Oh, wait.
There we go.
I just had a quick question just to get my brain around this.
So the average, if you break down the average by summer and winter, people are using well
over 7,500 in the summer because they're irrigating.
So they would be paying at a higher rate in the summer.
We would still be going, in a way, we would still be going back to a winter and a summer
rate.
Do you see what I mean?
Even though there's not an across the board change in rates, since so many people are
really gonna be using the higher volume in the summer, they're gonna be bumped up to
the next tier anyway.
And you're taking that into account when you're coming up with the decrease of 3.15 a month
or 2.10 a month?
Yes.
So a couple of things.
So currently, the decrease you see per month is based on 7,600 gallons.
Realistically, a customer could use up to 15,000 gallons a month without seeing an increase.
So if your average consumption a month is 7,600, which it used to be 9,200, that customer
could irrigate in the summer months up to 15,000 gallons before they see the rate increase.
So then once they get to 16, of course, they would see an increase they're currently not
experiencing right now.
So but for option three, they would be cruising along at the lower rate until the summer and
then they'd be bumped up.
Well, yeah, actually in option two and option three, the only two differences between those
tables is the first tier.
So in option two, it's zero to 7,500, option three, of course, is zero to 5,000.
But what we've done basically to get that additional 2,500 built into option two is
the rates in the higher tiers have increased.
So for example, the 7,611 is higher than the higher 7,12, the 9,68 is higher than 9,53,
the 12,04 is higher than 11,79.
So those increases, those customers above 15,000 gallons would be more in option two
than they would option three.
Okay.
Right.
Hopefully the answer helps.
Yeah.
I guess that makes sense.
I'm just thinking there aren't very many people who use less than 5,000.
I mean if the average is 7,600 at any given point, there aren't very many people.
So it would be 5,000 below right here, if you went back, it would be 55% of the bill
distribution.
Right.
And then 34% would be in five to 15.
So it would be 89%.
These are averages?
The percentages?
No, the volume.
The volume.
Oh, the volumes.
Yeah.
The volume's averages.
Yeah, absolutely.
But it's average across the year.
Correct.
Yeah, and it'd be higher in the summer months.
As opposed to per season.
Absolutely, yeah.
And that's where that 5,000 came in.
For example, you know, the average is 7,600 right for the entire year.
The average for the winter months, excluding the summer usage, is 5,000.
That's where that 5,000 came from.
So yeah.
Okay.
Hopefully that helps you answer that question.
I guess it's a rational basis.
I can take this.
I'm supposed to take this presentation down too, I think, when there's questions.
Just to follow up too.
So the winter months are November through April, and then obviously summer is May through
October.
Okay.
Yeah.
Thank you, Tony.
Madam Chair, I have a comment, a question for the speaker.
I didn't hear that.
Did you hear?
I think he has a question.
I don't know what the question.
I'm sorry, Lee.
Can you go ahead?
We can't.
We didn't hear that.
Okay.
I was just letting you know that I wanted to ask a question or make a comment.
So if I've got the floor, then I'm torn on this billing change in so much as I appreciate
the simplification of having just a standard bill, if you will, and not a seasonal adjustment.
But if the concern is to try to alert people with the fact that we're using more water
during the summer, it would seem like the current rate structure would certainly let
people know more rapidly that they are using more water at that time of year than they
would with this rate structure, which is averaged out over the whole year.
So it looks like a nice idea to standardize it and average it in the way that you have,
and I appreciate the work that's gone into it, but it seems to me that if you're trying
to encourage people to do less irrigation in the summertime, which seems to be the big
question here, that having the rate structure have, which encourages, I think, by the alternation
of rates in summer, but a more careful and judicious use of irrigation on the home.
So I'm torn between what we do have and how it appears to work and what's being authored
and how it will work, because we're projecting since we don't know.
So I wonder if you have any thoughts about that in terms of making this change from what
we're currently doing?
Mr. Rybak, I think that's great feedback, and I should have said this to the PUB at
the first time, and I think you recall this.
So the city auditor did present a rate audit a couple weeks ago to the PUB and city council.
In that audit, really what she encouraged staff to do and one of the recommendations
was to look at the water rate structure, look at that first tier, and try to come up with
some alternatives for council and PUB to consider, because really, that first tier is fairly
large.
Given your point with winter and summer blocks rate structuring, that is definitely an advantage
of it.
It does discourage people from irrigating in the summer months because that rate goes
up accordingly, and if that's the direction the PUB gives us today, we definitely could
take back and establish a new tier in the block rate structure and keep the summer and
winter rates, if that's the direction the PUB gives us.
So when we get to the presentation and once you give us your guidance, we'll definitely
take that forward to city council and come back with future discussions throughout August.
Thank you.
You're welcome.
Devon, do you have another-- Yes, go ahead.
Yeah, I do have-- trying to think of how to word that.
Yeah, absolutely.
Kind of a question and a statement.
So I'm just trying to-- like this long tail.
So average usage is 4,000 or 5,000 gallons a month of the average home, and then you
have this long tail of kind of heavy users, and we have this situation where most households
sit over in the 4,000 or 5,000 at the peak of that curve that you had up on the chart
earlier.
Yeah, I can pull it up, yeah.
And you have a handful of users, like 1% of bills, it says, are using basically 10 times--
like they're 10 households' worth of water consumption.
And you use it, you pay for it, that's appropriate.
We have, I think, ample resources right now.
What I wonder about is as we continue to grow, and I imagine both of those parties grow.
We have 99% of users are typical, and we have the 1% at the far end of the tail, are heavy
users in our future growth, too.
And as we need to upgrade our water mains, as we need to upgrade our water treatment
capacity, you know, delivering water, running a pump uses a little electricity, you pay
your $8 of 1,000 gallons, whatever.
But whenever we need $100 million water treatment plant, due to-- and if you took that 1% using
10 times as much, that's 10% of the consumption comes from this small group of bills.
So I think that's-- there's-- I used the word "incentivize" earlier about incentivizing
water use.
And it's like, oh, well, we want to have an incentive to encourage conservation, not overuse.
But there is also an aspect of paying your fair share.
If you're-- if a group of people's actions are going to make us build a larger water
treatment plant, or make us make a $100 million or $200 million capital investment five or
10 years sooner because of their choices, it seems fair to make sure that they pay for
that.
And I'm glad to see the rate structure moves the tiers down into that, into where half
or so of the population has some incentive.
Now if I'm using 6,000 gallons a month, it's going to be an extra dollar or something like
that a month on my bill, but if I take simple steps to move down to 4,500 gallons a month,
I do see a gain in savings, a greater gain in savings.
So I really like the 0 to 5,000 because I think that gives a small incentive to the
greatest number of people.
And I wish-- and I know this is-- would be a large and complicated problem.
But if-- I wish we could model what this would do to water use over 10 years.
If we have rate structure A, B, and C, does it-- do we expect a higher level of conservation,
a lower average or median usage, summer versus winter rates, do we expect a change in usage?
But I think that might be too big of a problem to answer quickly or easily.
So I don't know.
That might be its own project.
Well, I think that's great-- all great points, right?
I think that's exactly why we're talking about the water rate structure today is I think
what policies we put in place helping conserve that water does play an impact when those
plant expansions are needed.
For example, that $100 million plant that you had mentioned, that if people continue
to conserve water, there's a possibility maybe it could move out, maybe not.
Stephen can answer those questions great.
And Stephen has people on his staff that could do some forecasting if you'd like to see it
and we can follow up with you.
So if you'd like to see, for example, if the average usage eventually gets to 4,500 gallons
or 5,000 gallons, what would that make that plant expansion do?
Would it push it out or not?
And we could look at that.
We have forecast models internally that look at that.
And one thing I'll mention-- and I think this is in the presentation-- is that up until
this year, I think it may still be decreasing, but we had a decreasing GPCD and what they
call a GPCD in the water utility.
And we're right around 140 gallons a day.
So GPCD is the gallons consumed per day per person, is about 140 gallons.
So I think that's important.
It was decreasing in our last forecast model, but I want to point those out, all the great
points that you brought up.
And if you'd like to see the forecast data, we definitely could follow up with something
like that.
Absolutely.
Yeah, I would love to see the forecast data.
I don't know if you have any kind of model that says, this rate structure would lead
to 3% reduced use, and this one would lead to 5% reduced use, or if that-- like I said,
that modeling human behavior is very hard.
Yeah, it's almost like in our internal modeling software is Stephen and his staff, they model
it on their end and tell us, hey, this is how it breaks out between the classes and
the tiers.
We take that data and put it into the financial model.
That financial model gives us our revenues and we bring forward 2%.
So it's almost a team effort.
It's two-part.
So the first step is usually Stephen and his staff looking at the forecast, what it does.
We build it into the financial model accordingly.
Yeah.
Thank you.
So the average use being 7,600 per month, you said it was down from 9,200.
9,200, yes, sir.
So how many years of average is that?
So dating back to when I was involved in water, and the last study was done in 2014.
It's my assumption that usage came from that 2014 study, but, of course, that's something
we can follow up on, too.
It didn't happen over a year, of course.
It's probably back to 2014, 2013 time frame.
Right.
It's just rained a lot.
I don't think it stopped raining for a year, it seems like, so I wonder where that number
came from.
Yeah.
And that's a great point.
Our study was done in 2019, so this year's been really wet.
I don't think it's quite as wet last year, if I remember correctly.
Yeah, it was pretty wet last year, but this year is pretty wet, obviously.
We know.
Yeah.
Okay.
Then anybody, if you have any more questions, I'll move through the presentation, we can
continue this conversation, and give us your direction at the end, it would be great.
So the residential irrigation, I know we've already talked about irrigation a bunch, but
we wanted to bring this up to the --
The presentation is another --
Oh, sorry.
Hang on just a second.
That would probably help.
We'll definitely have questions if you can't see the slide, let's see here, all right.
Okay.
So residential irrigation, we've talked about this some, Mr. Ibeck, you had some questions
regarding the winter and summer block structure, so if you give us direction for that, we can
definitely bring that back.
So in this option, it's very similar to water.
We don't have to go through every single thing, again, but I wanted to point out to you, just
kind of walk you through the overall view of it here.
So option one is, of course, the no change, this would keep the current irrigation residential
rate structure that's in place.
You can see what those rates are between the two groups here.
Option two would be combining that winter and summer rate structure into one combined
rate, establishing that new tier as zero to 7,500 gallons, and then option three would
be establishing a tier from zero to 5,000 and combining that seasonal rate also.
I will point out that not all residential customers have irrigation meters.
They're definitely fewer than have water meters, of course, so that this is for the ones that
do have them.
And then this table, if no one has questions on irrigation, we can come back to it.
This table summarizes what that would look like based on the average usage.
So 89% that we mentioned earlier, 32,806 residential customers will see a rate decrease.
If you go with option two or option three, whatever direction you give us, 11% of the
customers in those higher tiers above 15,000 actually see an increase based on their usage.
And then you can see in the table option one, of course, a customer based on 7,600 gallons
is currently paying $46.62.
If you go with option two, they're ready to go 43.47, then option three you go to 44.52.
So there's a $3.15 decrease in option two and a $2.10 decrease in option three.
We can come back to this also.
Commercial rate recommendations, so we'll jump into commercial now.
We've got some wholesale waste water and definitely come back to residential if you all would like.
In commercial, there is not a winter and summer seasonal rates.
It's just one volumetric rate, so we're not looking to make any change, we're just recommending
to leave what's in place.
So you can see the facility charge is $50.99, volume charge is $4.34 per 1,000 gallons,
but the average customer's bill will be $246.29 a month.
And then commercial irrigation for those customers with commercial businesses, they have irrigation
meters.
There are currently or currently is a seasonal rate structure, so we have a winter and a
summer volumetric rate.
The facility charge, of course, stays consistent throughout the year.
We do have an option two for this one, which would be just combining those into one blended
rate of $5.75.
So under this option, a commercial customer with irrigation meters actually see a decrease
of $10.65 a month, and that's based on 42,000 gallons of usage.
So quite a bit more usage there.
>> Mr. Chairman, I have a quick question.
>> Yes, sir?
>> Who typically constitutes a commercial irrigation customer?
>> Who qualifies as a commercial irrigation customer?
Let me ask Stephen to come up here and -- let me ask Stephen, the director of water, to
come up here and give some examples of some water irrigation customers on the commercial
side.
>> Good morning.
A commercial irrigation customer would be like a large commercial property.
So if you think about, say, like the Target over there on Loop 288, how they have landscaping
around the project, so that's more of a more commercial customer.
Does that answer your question?
Sir?
>> So typically a commercial irrigation customer is one who has relatively large grounds to
irrigate?
Is that more or less the idea?
>> Yes, sir.
>> Okay.
Thank you.
>> Okay.
Let me pull up the presentation.
We'll continue our way through it here.
Okay.
So for the PB members who have been here a while, these are the wholesale rates.
We bring these back throughout every year because they are bound by contract, so we
do adjust these rates each individual year as part of the budgeting process.
The first one being the wholesale WW2 rate.
We're not looking to make any change to that, but I just want to point out what that rate
was.
The raw water, this rate is for wholesale sell of raw water per 1,000 gallons, so this
is 85% of what the Dallas wholesale rate is, so that rate is currently .758.
It will stay the same, .758.
And then the pass through through Lake Chapman, we do have an agreement for this also.
This one adjusts off the tuned CPI adjuster, so that adjuster did go up.
Of course, inflation and everything else going on this year, so that rate would go to .0282,
so that rate would actually increase this year.
I think last year it stayed the same.
And then wastewater rate changes.
We just went ahead and put wastewater in the water presentation because it was just one
slide so we didn't think we needed a separate presentation.
These are adjustments to the dino's soil rate.
These are cost of service adjustments, just using more soil for that product and more
money we have involved in it.
So just looking to recoup that cost.
You can see on the first one, the dino's soil per cubic yard is going from 30 to 35.
And then if you buy from 10 to 99 yards, you get a 20 percent discount.
That rate goes from 24 to 28.
And if you buy 100 plus yards, you get a 40 percent discount going to 18 to 21.
Question right quick on that.
Yes, sir.
It's the volume.
It was wild that we couldn't give it away as much as we were producing at least in comparison.
So the prices are going up.
I assume that means that it's selling a lot better these days, or is it just costing a
lot more to produce?
Let me ask.
Let me ask Stephen.
He knows about the operations.
It's not in his head.
I see that.
Yes, sir.
It's been become quite popular and we've actually had to purchase additional sand this
year to generate more product.
Is that more commercial use or?
I can get that number for you, whether the breakdown, whether it's commercial or residential.
But I think with the pandemic, a lot of folks are staying home and they're really leveraging
that resource for gardening and stuff as well.
That's a good general answer.
That's all I needed to think of.
And I did.
If it's okay, you'd ask Tyler, sir, you had asked about the median consumption.
Looks like residential is about $5,975 and commercial is $11,283.
That's per bill?
Yes.
Okay.
Thanks.
All right.
Let me pull this back up.
I think we're just about through this presentation.
This is a table we showed.
Last year, I just wanted to show it to the PBA again so you can see several different
fiscal years, what the rate increase or decrease were for the utilities.
You can see from fiscal year 2015 to fiscal year 2017, the utilities did have rate increases.
Starting in fiscal year 2018, you can see we had some rate decreases.
And then this year, I'm not showing any rate decrease, but knowing that if we redo that
rate structure for the water customers, we would see a decrease for the average customer.
So I'm not showing that on this slide, but if you do give us that direction, that percentage
would be built into here.
So rate recommendation, kind of a recap.
As I initially said, staff's recommendation for the water rate structure was option two,
which established the zero to 7,500-gallon tier.
Definitely if you give us feedback to keep the winter and summer blocks rate structure
or zero to 5,000, we'll take that forward to council tomorrow.
Commercial just option one, the regular water rate for commercial customers, not making
any changes to that.
The irrigation rate would be combining that winter and summer block structure into one
combined seasonal rate.
And then wholesale, just making those adjustments in accordance with the contracts, and then
wastewater is making those changes to the dino soil rate.
And then these are additional work sessions.
If we need to come back to the PV, again, before that approval, we definitely can do
that.
Just give us your feedback today.
We definitely can circle back with some follow-up questions that you had asked today and get
those back to you.
So tomorrow, this presentation is not listed here, does go to city council, with the budget
workshop being next week on August the 2nd.
So definitely a busy day next August or, you know, on the 2nd.
So that is it.
I will pull this down for additional questions if you have some.
>> One more question.
What was the hydrant rate?
I didn't see that in the presentation.
>> Let me go back.
>> It was in the budget last presentation for --
>> And then, Mr. Chief, if you remember last year, we actually did a decrease to the fire
hydrant rate.
This year, we're not looking to make any changes to it.
Just leave it alone.
It was mentioned earlier as under recovering like $30,000.
So it's not being adjusted, but it's currently under recovery a little bit, yes.
>> Okay.
Questions?
Or discussion.
You need a consensus.
>> I just need a consensus of what direction you would like us to pass along to council
as we talk about the rate structure.
>> I was wondering if somebody could repeat the median number that Stephen gave us.
>> 5,975 is what I heard.
>> For me, I don't mind merging into one rate, not having a seasonal rate.
In the past, that used to be something that triggered more conservation, but I'm not so
sure if that's how it is today.
I do prefer the zero to 5,000, because I think that would impact conservation more, but now
that it's the median is 5,975, I guess either way, I would be okay.
So how about we start with Ben and work around it?
>> Yeah, I was going to say I'd probably lean to the third option, zero to five, as well.
Less impact on those up on the top, but still encouraging conservation, as you said.
I guess it kind of depends on the motivation, in a sense, what we're trying to achieve exactly.
That's what I would lean toward.
>> Okay.
>> Yeah, I would agree.
I just go for option three, just noting that many people are going to be bumped up to the
second tier in the summer anyway, so it's almost a de facto change in rate.
>> I like three also, but that also depends on what the answer is to how we got to this
lower average.
>> Okay.
>> Right.
>> Got you.
>> But at the same time, hey, let's try it for a year, see what it does.
>> Okay.
>> I agree.
>> Yeah, I agree, option three, and I just do want to point out the 5,000 to $15,000
rate is the current zero to $15,000 rate, so it isn't like you're getting-- you only
get a discount for the first 5,000 and then you pay your normal rate for the next 10.
>> That's correct.
>> In terms of the ability of commercial irrigation, I don't have a very strong opinion.
It seems to me that simplifying to a single rate would make sense, but I don't know if
that would have a big impact on those users or not, so I would lean to option two, but
I really don't have enough information to give a strong recommendation.
>> And did you say these are all revenue neutral for the city?
>> They are revenue neutral.
The costs came to you after you approved the budget, so the thought process behind these
were revenue neutral.
That cost me passed along to that 11% that those higher tier groups.
>> So I'd be inclined to agree with you that just to make it simpler if it doesn't impact
the city at all.
>> And we do need to get Mr. Reback's opinion.
Go ahead, Lee.
>> Thank you.
Although I do have my concerns about going to the simplified residential rate, as I mentioned
earlier, I think I would prefer option two over option three, and so that would be my
reaction to this thus far.
As far as the commercial and commercial irrigation rates, I think in general simplification is
good.
It's clear the commercial customers are paying a pretty hefty bill as it is, and so they
naturally have a bias and interest in maintaining good control of their irrigation systems.
So I would vote for option two or recommend option two rather than option three.
>> Okay.
I think we have our guidance, and we can circle back with the PEB once we visit with council
tomorrow.
>> Thank you.
>> Definitely bring that back.
>> Thank you very much.
You did a good job.
>> Thank you.
And I think we have one more presentation for solid waste.
>> Oh, yes, we do.
Sorry.
Thank you.
>> Okay, so we will go through solid waste, a little bit shorter presentation, not quite
as many slides, so get started here and changed on me.
An overview of the presentation.
So we'll talk about residential rates, commercial, landfill.
We'll talk about some outside city rates that we're looking to establish this year, and
talk about the contract rates for the wholesale agreements that we currently have in place.
So I know there's a lot of data on this slide, so I'll take my time to go through the bullet
points here.
The first thing I want to point out is that the residential refuse and recycling customer
will not see a change in the rate.
For their refuse and their recycling card, there would be no change to that service.
Where they would see something, we are looking to discontinue a subscription fee for the
yard waste and brush collection.
If you remember a couple of years ago, we actually started a subscription fee for this
service that was a dollar for craft bags and 50 cents for carts.
We've had good participation in this program, we're looking to discontinue that rate, it
is no longer needed.
So this is a decrease to the revenue, about 80,000, not significant, but we did want to
point it out to the Public Utilities Board.
Also just all yard waste must be contained in a craft bag or cart, no plastic bags, just
wanted to point that out to the people that may be listening online.
And then brush cut to length, and then we pick up everything set at the curb each week,
so I just wanted to point that out also.
And then this is something new, we're looking to initiate this year for residential customers
as an outside cart fee.
So if you have a bag that's sitting outside the cart, those will be logged into the system
now and charged at $5 a bag if the PV gives its direction to proceed with that.
Operational changes, we want to include this in the slide, just a little bit different
format this year.
Bulk waste, so we did want to point out that this must be called in, and all material will
be collected from the curb once it is called in.
And then the last bullet point is the bulk rates for called in material, construction
waste, everything extra at the curb at the time of collection.
So just wanted to point out those few things.
Purchasing yard waste carts for homes that currently don't have the subscription, are
they going to distribute the carts, or I guess you'd request a cart?
Great question.
So there is another fee in the rate ordinance to purchase the cart, it's a one-time cart
purchase fee.
That would still apply.
So if you don't have the service today and you want to get a yard waste cart, you'd still
purchase the cart, but you would not have a reoccurring subscription fee for that service.
I'm sorry, I want to say the cart fee is $20, yeah, thank you, Eugene.
Okay, let me get into the commercial, here we go.
So commercial rate recommendations, we are looking to change the pricing structure for
the front load and side load service.
It's going to result in no rate increase or decrease for the customers, the average customer.
And we'll point that out on the next slide for you.
And this is mostly associated with cost of service, it gets us closer to that cost of
service that was completed about three years ago in the solid waste utility and also aligns
with some new software we're looking to implement within this utility and the billing structure
and what it can handle.
So I wanted to point that out.
A couple facts in here, there's 2,700 weekly commercial dumpsters, 104 of those dumpsters
will see a decrease in their monthly rate, and I'll point those out to you on the table
on the next slide.
And it kind of shows you a percentage of how those breakdowns, 34% is retail, 33% schools,
9% multifamily and 5% hospital, and then we will look at the rate matrix next.
So there's a lot of numbers, and I'll take my time to walk you through here.
So the current rate structure that's in place is this first table.
You can see a three cubic yard that's currently being dumped one time a week, that's what
this one X means, is $74.16.
If that dumpster gets dumped two times a week, the rate would be 148.32.
So basically, it's a common denominator or common multiplier as you go out, but the issue
is when you get over here to this box on the left-hand side, so 74.16 is that common number,
which is the one three times a week.
If you times it times two, you get 148.32, if you times it times three, you get 228.48,
you see that right here, but when you times it times four and you get to that four time
a week service, it's 296.64 by multiplying it, but when you look at the four times a
week in the box that's currently proposed, it's 311.52.
So from a cost of service standpoint, when you get into that four time a week collection,
and from a billing standpoint of having that common multiplier to handle it in that software
is a great thing for staff and reduces that staff time involved with it.
So if we did this, anything greater than four times a week, so four times a week, five times
a week, or six times a week, those customers would actually see a decrease.
So those rates would decrease, you can see that number down here in this bottom box.
So for four times a week, it'd go down $14.88, five times a week it'd be $37.95, and of course
six times a week it's $70.20, and then you can see the rest of the rates there.
Does anybody have any questions on the, let me pull this down, yes sir.
Was there a reason for the rate change for four times and greater?
So previously, you know, I think it was meant to incentivize people to upsize their container,
so instead of you being on that street four or five times a week, maybe being there twice
a week, but you would increase from a six to an eight kbqr container, so that was the
reasoning behind it.
Before, the recommendation now with staff is to align it with cost of service to get
it closer to cost of service, and your one to three time a week customers are currently
within that range or a little bit under recovering, but anything over four times a week are currently
under recovering.
So the process before, you know, bringing it forward to you was to get it closer, align
with the cost of service model, and actually accommodate that new software we're looking
to implement.
Would that necessitate any increase to kind of make up the difference, increase in kind
of the constant rate otherwise?
Like the one time a week rates?
Well, so I'm just saying if we're going to lose money on the top end, do we want to make
that up on the bottom end?
If that's the direction...
You didn't propose that, so I was asking...
If that's the direction you give us, I will tell you the majority of the small businesses
within the community are the one time a week customers, and probably 70% of the cans or
so.
So I just wanted to make sure to point that out.
That's kind of what I was asking.
Absolutely.
Yeah.
Okay.
I will proceed along.
This is the recycling structure.
You can see it here.
I won't walk you through all the numbers again, but same concept as we reviewed on the refuse
size or refuse side, so you can see the current rate structure that's in place.
For a three cubic yard, one time a week is $63.78.
That rate is less than the refuse rate.
The reason behind that is, of course, when you're doing it from a cost of service standpoint,
it removes the disposable component of the rate.
So this rate is lower, and we talked about this a couple of fiscal years ago.
Just wanted to make sure I pointed that out to the PB members.
So propose.
What we're proposing to do would start in the two time a week, four cubic yard container,
and you can see what that would do in the very bottom.
So for example, if you had a customer that was five times a week, and they had a four
cubic yard container, they would see a decrease of $43.50 a month.
But anybody in the one time a week, three cubic yard, or four, six, or eight, would
not see any change in the structure.
Question.
So this will still encourage to recycle more, because this is lower than throwing it away,
which is really important.
It's actually being lower than what we have in place now.
So if you had recycling containers being picked up every single day, you'd actually get a
break on that container.
Absolutely.
Five days a week.
Yeah.
Absolutely.
Thank you.
I wanted to point that out.
Yeah.
It was great.
Okay.
Let me see here.
There it goes.
Okay.
Great recommendations for the landfill.
We have brought this back to you a couple years now.
The sludge disposal rate, we do see this material continue to come into the landfill.
That current rate is currently $50 a ton.
We are looking to increase that to $60 a ton.
Is the cost of handling that material, it is difficult to handle.
Annual revenue increase associated with this is $82,000, which basically offsets some of
that decrease we saw on that subscription fee earlier in the presentation.
Match the new brush rate of $35 a ton for non-city and customers to something that staff
is proposing.
If you do not live within the city limits.
Change the unbagged brush weight from 20 to 25 to match the minimum load rate.
So currently if you come into the landfill and you have less than a ton, you pay a minimum
of $25.
We're just looking to make that consistent across the board.
And then operational changes, so residential gate verification.
We are looking to implement something that customers do need to verify.
Their proof of residency when they come to the landfill and come to the weigh station
to weigh in.
And that could be simply a utility bill.
I'm looking to bring that forward this year.
I thought you had to do that anyway.
I thought you had to show proof.
No ma'am, not currently.
No you.
Sorry.
Yeah.
Yeah, once we establish a non-city rate, if we get that guidance from you, we would just
require that verification when they come to the window to make sure they're getting billed
at the appropriate rate.
Yeah, absolutely.
But there's no verification currently.
So regarding this as showing a utility bill, that's going to be a lot of extra steps.
I mean, I've used the landfill several times in the past few years and they currently collect
driver's license.
Can we not just base it on zip code?
I know there might be a very small number of people that are in the city but out of
the service area or something like that.
But it seems like the amount of effort to make sure I don't even have -- I only have
electric -- I mean, electronic bills.
So for me to show a utility bill, I guess I'll have to log in on my phone and pull it
up while sitting there at the weigh station.
So our Deputy Director, Eugene, is here.
He can talk to that and talk to some of the reasons why we're proposing a utility bill
really quick.
Let me ask him to come up.
Good morning.
Well, this is -- there's been some discussion, ongoing discussion for a while.
You know, we have a lot of customers within the city and without -- outside the city limits
that come in and we really have no way of distinguishing who's who.
To your point, you could receive one service but not another service, would you thought
that this would help us in creating that external rate to kind of verify who actually lives
in the boundaries?
The same product in that's outside of these boundaries.
So via an electric bill, via sometimes your driver's license, I mean, of course there
won't be a situation where you show a driver's license and we'll go and look and see where
this is.
But we thought an electric bill would be the most convenient process.
But again, it's based on the direction and guidance we get here.
You know, we can be further discussion based on your guidance.
Yeah, I mean, I like the sentiment of it, you know, like we've already paid taxes to
support the landfill.
We've done all these other things for the last 50 years to build that landfill.
So we should take advantage of the rates.
But I just worry about the actual remembering to take your bill or like, you know, I don't
get a paper bill so I have to pull it up on my phone or I have to print a paper copy if
they -- because I remember there's a lot of -- I have to like hand them paperwork and
they keep it and then I get it on the way back out.
So if I have to take a paper bill, it would be several more steps before I could go to
the landfill.
But I just wonder if there's a -- And keep in mind there are several things
going on in the environment that we really -- the city of Denton and our customers who
enjoy Cadillac service just can't control.
You have other landfills who are decreasing the input, I mean, what they're taking in.
So a lot of that is coming from us way out of the areas, way out of the areas.
So that's another measure to get this kind of control and look at where the landscape
of where this is coming from.
Again, based on your direction, we thought the utility bill would kind of give some good
points and a good sense of direction of where it's actually coming from.
Yeah, and I just wish like something -- something that everybody already carries is something
like a driver's license.
So if it could be based on zip code or city or -- I don't know what the amount of labor
there already is at the way station in, you know, looking at last name and street address,
that might be too onerous.
Right.
Because there's already long lines to get in, especially, you know, weekends and stuff
like that.
So I just want to streamline that process while also, you know --
You know, working in several municipal organizations, what I've seen work well is when new programs
like this come on board, we encourage customers to print their utility bill and kind of just
store it in like a registration or something in the car.
So whenever you do come through the landfill, you have it available.
So it won't be a situation where you've got to pull it up each time, you know, once you
verify at the line that this is what it is, and you put it back in your glove box and
kind of just keep moving forward.
So the next time you come through, it's always available.
Put it next to your proof of insurance.
Yes.
I've seen those -- I've seen those be very successful.
I haven't seen my utility bill in several years, so I don't know my log -- as long as you guys
are getting paid, everybody's satisfied, don't get me wrong, but it's just -- it's not something
that I have readily available, but it's not an either/or thing for you guys.
It's just that only, right?
Well, again, we want to make sure that -- we're just trying to kind of put a circle around
this and what's coming in versus what's in our -- you know, let's say -- let's include
it in our Cadillac service for our city of Denny residents and what's coming from well
outside the city.
I'm curious, how many people of their driver's license says Denton, Texas, but they're really
not in the city limits?
Is it a big number?
Do we know?
If the vast majority really are Denton citizens, maybe that's good enough.
I don't know.
It's just a thought.
You know, we're accustomed to keeping our insurance card in our glove box.
Yes.
How difficult would it be to add a utility bill?
One utility bill.
My insurance is digital also, actually, so.
What's that then?
I have everything, much like Devin was just saying, everything's digital.
My car insurance is on an app on my phone.
Yeah, I have that too.
My utility bill's online.
You know, I don't have papers in my glove box, really.
Could I use a year old utility bill to go to the landfill?
Right.
I mean, it sounds like we almost want like a proof of residency certificate or something
that's good for a year.
You renew it every year.
I mean, I don't know, but -- Well, it seems like what's important is that
we're paying our utility bills, not necessarily that we're living full time in Denton.
I mean, somebody might have a summer house and they still would be eligible for the residential
rate.
So what might be the pertinent piece of information is are we contributing through our utility
bills to the city?
So it seems to me that the utility bill would be the relevant piece of information.
Right.
Yeah.
If people spend half the year up in Wyoming or whatever, they still would be eligible
for residential rate.
And that's exactly right.
So I kind of look at it like, you know, when the program starts, you know, we put the effort
and time in the city and the customer up front, almost like the airplane thing.
You use most of your energy getting there.
Maybe it's logging in, collecting your information, and then at one time, you know, you print it,
and then you got it for safekeeping when you do come through the landfill.
Eugene, so if a customer shows up without the utility bill, you're not going to turn
them away, right?
Well, currently we don't.
It's just, you know, shows them some identification and they come on through.
So the concept would be here though, going forward though, if they show up with no bill
approved for residency, will you charge them the non-resident rate?
And that's a good question, and that seems practical that they're charged a non-resident
rate.
The other thing I'll mention to the PAB just to consider is that, I mean, when you talk
about a government-issued ID, like a driver's license, you're going to have folks out there
that do not have those, and that brings up a whole other different discussion.
Correct.
So I would just, I think that's probably the reasoning here, why the staff is kind of erring
on the side of the utility bill, as much of an inconvenience as it might be, and you do
bring up a good point about, does it have to be within 12 months?
You know, let's say I just took my daughter to get her driver's permit and almost got
turned away after having driven four hours away to get her a driver's license permit.
Thank goodness it was somebody that was reasonable.
I think the long story here is I think the staff at the gate will be reasonable, will
accommodate folks just like we do today.
That will not change, but I think that the practical nature is that probably makes the
most sense, and we're not going to turn people away, just like you may end up having to pay
the higher non-resident rate until you can prove that you are a resident.
That's a really good point.
Yeah, really good.
Yes.
I mean, if you drive up in a truck that says Adam's Exterminating on the side, I mean,
they're going to let him through, right?
Mr. Rybeck has a question.
Go ahead, Lee.
I just wanted to comment.
I think we're making a little too much out of this.
I think once the person is gone, didn't have a utility bill copy, they'll make one, put
it in their glove box the next time they have it, and they won't want it, because who wants
to pay the higher rate or pay the rate at all if necessary?
So I think we're making a little too much out of this, and I don't think it would be
a huge inconvenience once people get used to having a utility bill in their glove box,
and even if they have to take one up for that, you know, print it so that we have it, I think
it's that big a deal.
So those are my two cents.
Thank you.
Great feedback.
Let me get this pulled up again.
Okay.
So the next thing we want to talk to the PUB about is an outside-of-the-city-denton rate
for residential customers.
We currently do have some customers that are serviced at the residential department or
residential trucks that have carts that are outside the city limits.
These customers could be in the ETJ.
Currently they're paying the same rate as someone that lives inside the city limits,
and some of these customers are quite a ways out.
So I just want to establish a new rate is what staff's recommending.
Let me walk you through what those rates would be.
Inside-of-the-city-denton customers for a 64-gallon cart, which is our smallest cart,
is $20.51.
The 96-gallon cart, which is the largest cart, is $25.04 if you live within the city of Denton
or city limits.
Outside-of-the-city limits, we are looking to increase these based on the cost of service
study that was completed this year as part of the budgeting process.
There is currently a $10 spread in between what current customers are paying on the 64-gallon
cart and what we're proposing.
So you can see we're proposing $30.69.
For a 96-gallon cart, we're proposing $32, and just leaving the extra cart the same just
because that trip fee and everything is already built in there, that cost.
So customers, how many customers are currently on this bill is about 214, so about 214 customers
will see an increase.
Rate recommendations for the contracted waste agreements, we'll go through the table in
just a second.
I want to point out a couple things.
So the agreements will end in fiscal year 2023, so do anticipate those conversations
to come back forward to you in the coming year before those agreements expire.
And then, of course, the proforma anticipates them going away in 2023.
It equates to about $6.5 million in revenue a year, and of course, we're looking to adjust
these prices based on the consumer price index as called out in the contract.
So that adjustment is 4.5%.
You can see who those agreements are with in the table, so you can see Wise County,
Frontier Waste, Little Lamb, the City of Little Lamb, Waste Connections, Republic, and CWD,
and what their current rate is and the current fiscal year is listed here in this column,
and what's proposed is down here in this very far right column.
The contracted tons that you see are those tons specified in that contract that they
will bring into this facility each year, so that is the minimum.
I don't want to get into this discussion too far here, because it's way too late to bring
up outside tonnage.
We've had this discussion for years.
Yes, it helps our rates tremendously, I realize that, but you have to, I mean, I plan on dying
in this city, so I'm worried about my long-term rates not even being available anymore because
we won't have a landfill.
So some time after this budget cycle, I would like to see that as a new discussion.
Yeah, absolutely, and we'll make sure Brian, Eugene's here for those conversations, and
I think Tony mentioned earlier, there's always comprehensive plans, so we can talk about
all that stuff as we continue throughout the year.
I had that question too, of what I understand it's nice to have the income, but how do you
weigh that against the landfill and how much quicker it fills up when we let outside come
in?
Absolutely, yeah, and I think that's part of those future conversations.
We come back to you and say, "Hey, do we want to renew these agreements?"
I think that's an important part of the conversation is, if we do, what does that equate to as
life expectancy of the landfill, or how much sooner would it be full?
We definitely can talk to you about that with Brian, yeah, absolutely.
Along the same lines, like when we had that discussion, the rationalization of these rates,
because there's a 20% difference between a customer with 2,000 tons and a customer with
3,000 tons, and we have to figure out what the value is, but the value of our landfill
and the space in our landfill, and make sure that if we suddenly are gaining customers,
that means we're under the market cost and we're undervaluing our landfill and our airspace,
so just all of that wrapped up together if we do a work session on this in the future.
I'm assuming that's all covered in the comprehensive solid waste plan.
I don't know, it is, Eugene, okay, it is covered in the comprehensive plan.
Just one slide is all I have left, and we'll be okay with this one.
So just next steps, I went over these earlier, and this presentation, summer to water, we'll
go forward to council tomorrow, the budget workshop on August the 2nd.
Coming back to PEB on August the 23rd, of course, we'll follow up with you on the guidance
we get from city council tomorrow regarding the rate structure prior to that approval,
and then the budget tax rate and everything is adopted on September 21st, so that concludes
this solid waste presentation.
So you need guidance from us?
Yes, ma'am.
Yes, ma'am, guidance, or if you would like to do something different than what we're
proposing in this presentation?
I'm good with what's being proposed.
Anybody?
Yeah, thumbs up.
Everybody's good?
Okay.
All right.
Well, that concludes the agenda.
Do we have a motion to adjourn?
We'll move.
Thank you, Billy.
We adjourned.
We are adjourned.
You answered that one quick.
We are adjourned.