Mar 07, 2017 City Council on 2017-03-07 1:00 PM

7th 2017 it is 102 we do have a quorum we'll move on through our agenda items agenda item number one is citizen comments on consent agenda items and we do have one speaker wishing to speak mr. Willie Huspeth if you'll come forward and state your name and address your time will begin Mayor and councilmembers, is this on? Yes sir. Mayor and councilmembers my name is Willie Huspeth I live at 623 Newton. The agenda items that are considered agenda item that I would like to have pulled or reevaluated and I 'll tell you why the items are L, K, E, F, and G. All of them have to do with contracts that you're planning to issue. I notice that the county, the school, meetings, and city I keep saying something about these areas of African-American being hired or the lack of African-Americans being hired and they all are very polite just like you are today you're just nice you let me have my four minutes and you go on with business as usual. Well I decided I'm just going to keep talking about it and maybe for the the council position in district one where I live we'll finally get somebody at least for our district to say something and do something about this lack of hiring or just anybody in that area who will do something for the area I live in instead of just showing up for events and saying nothing. That's what I'm hoping for. Let me talk about something that I also talk about constantly but this is a new one. Why is it that and I noticed that the director of parks is here why is it that the restrooms at Fredmore Park was predominantly African-American Hispanics are locked. They 're locked but in the other parts at least you have porter parties there what is wrong with never mind. We need somewhere to go I think it's against the rules to go behind trees in that area and we use our parks more than any park in the city is being used we can't even go to the restroom well I'm gonna keep talking about that one too and the last one is I keep talking about there no seats in this room we can't see staff they have better seats too you have better seats. I pay the taxes and I sit here in this place is so full I have to sit on the floor at times I keep saying it you give me my four minutes you look like you're looking now oh we're really interested in what you are not interested we were just counting how many more minutes you got before you finished talking and then you do the same thing well I'm gonna keep talking about it I'm sitting on the floor something needs to be done about that not today I got here early but I would be sitting on the floor oh the newspaper person is here maybe she's right about the fact that I know seats in here lastly I saw me YouTube or something where a white kid and a black kid were friends our friends the white kid said I want to look like Tommy who's the black I don't know what his name was but black kid and that my turn anyway said I want my hair cut and I look like the black kid I thought you you wonder why we have race problems racism is taught you teach it how to hate people for the color of their skin I am a product of that I am trying so bad to stop doing that I just want to have a problem with you because of you not the color of your skin I wish the rest of us and do that would I restore I wish the rest of you would do that too and I'm saying to you tired of sitting on the floor a lot of higher more blacks and open the debt the rest of you. Thank you sir. All right we'll go on to agenda item two request for clarification of agenda items listed on the agenda for today March the 7th 2017 Councilmember Briggs. I would like to request that we pull item E which is in the amount of thirty six point six million and item F in the amount of seventy one point six million of intention to issue CO's and put that on individual consideration with a list of items that we have in our backup so the public can see. And then also on on K I have a question that contract was awarded to Floyd Smith and I think the last we heard they were significantly behind in their projects for concrete and so I'm just wondering if this will affect the completion date or have they caught up with their projects. Who can answer that? I don't know the answer to that question I don 't believe it's gonna be an issue with the scheduling for this project but I'll have to get back to you on the scheduling for the other projects so I'm sorry I don 't know the answer. Okay. Oh Councilmember Hawkins. Oh sure. Yeah I had some question. Were you finished keeping? Okay sorry go ahead. Sorry thank you. On consent agenda item I I think I have a few questions can be answered we don't wouldn't have to pull it but it might need to be pulled for an individual consideration. It 's regarding consider let me see here accepting competitive proposals and awarding a three-year contract collection services for utilities and fire EMS and I just had a few questions how that evaluation sheet went. Good afternoon I'm Tiffany Thompson the assistant manager for customer service and I'm happy to answer your question. Sure first off there 's a couple the the two top two vendors they have an asterisk by them with best and final offer pricing. Can you tell me why that was designated that way and then the ones below it were not it I'm just confused if that's a apples to apples comparison or can you just walk me through that? Yeah absolutely whenever we did our interviews with our firms we gave them an opportunity to give us a best and final offer and those two firms came back with a more competitive pricing so we wanted to make sure to include that with the final evaluation that these figures that we have here is what their best and final offers were to us so we could compare that with the others. So the other firms were given the opportunity but they just decided to leave their original bid as is. Yeah the top two firms I'm sorry the let me clarify that with autumn on the did we do the top four for the bath over the top two the top two ended up giving us the bath so they were given the opportunity to do that. And that goes under that rule again were they're allowed to do that because they were the the ones had who had won the award or I think we had visited this a couple of weeks ago. Yeah I'm gonna let purchasing clarify that for us. Those are a call within the competitive range so the evaluation teams conduct the evaluation and determine which firms are within their competitive range and then they're able to ask for best and final offers of those firms or they can ask for best and final of all firms it's their choice to do that. Okay and I think I had a couple other here how was the recovery rate decided upon was that up to each firm to put that in or did this city staff decide somehow on that? Each firm was given an opportunity to give what their recovery rate is they are the ones who determine what that is and so they put that in their bids for that and then with the best and final offer they were able to give us a pricing difference on how much that cost to recover that but yes all of them were giving us what their recovery rate is. Okay and then just my final question here was when let's say Credit Systems is recovering a fee their their fee price is taken out of that collection amount is that correct? Yes . And some of the other firms if I'm understanding this correctly they they request the amount that is owed and that is fully given to the city and on top of that they are they get a fee. Yes it's they are solely paid based off of what they recover with that. Are you talking about I want to make sure I answer your question. Sure I didn't explain it well. Are you wanting to know how they would actually get their funds from us? Well I'm just wondering if there's a difference if we went with a different firm if they if the full collected amount would go to the city and then they were responsible of collecting their fee with another you know firm possibly taking their fee out of the collection out of that original collection amount is there a way where that would have been rated differently possibly ? I understand what you're saying so no that wouldn't have impacted how they would have scored out because ultimately they're gonna get their collection piece off of whatever they collect from us so we wouldn't given anybody more points or more credit to the evaluation if they would have collected if we would have done a net recovery versus they just give us all the funds and then we give them a payback that wouldn't have impacted how we score them out. Okay and there's no extra points given for any local vendor in this situation? We look at all the local vendors and the biggest thing we look at is the best value to the city with that but we do look at those and make sure can they offer what we need to do does it help with our continuity of what we're trying to provide to our citizens but we do definitely take a good look at that to make sure we're giving everybody a fair opportunity for this. Thank you very much. Thank you. Okay great thank you. Any other questions clarification? Agenda item? All right so the only ones that I show that we are pulling our items E and F is that correct? Oh I'm sorry councilmember, Mayor Pro Tem wrote. No I was I apologize I'm late to the to raising my hand for this I'd like to pull item Q no need for a additional presentation just for a separate vote. Yes I believe we have a response to Councilmember Briggs question. Yeah I was able to step out and confirm that the concrete work that that is committed to by Floyd Smith's staffs been working with him on scheduling that in a more consistent way and so we think that this is not an issue at all in terms of keeping up pace with our current program for the concrete work. Asphalt other resources and that may be a challenge but concrete certainly something we're up on par with so okay. Okay thank you John. All right seeing no other comments or clarification of agenda items we'll move on to agenda work session three work session reports 3a is receive a report and hold discussion give staff direction regarding the FY 2015-16 comprehensive annual financial report an annual audit. Thank you mayor members of council we don't have a formal presentation today but I want to highlight a couple things and then I'll bring Nicole Bradshaw from our external auditors. First just overall that we had another positive year in terms of our financials we added a little bit to our general fund balance we also added to the net position of our utility funds so just overall in terms of another good financial year and before Nicole comes up I want to give a special thanks to the accounting staff I think some of them are here Cody Wood, Kevin Ann Mullen and Harvey Jarvis are here but they do a wonderful job throughout the year in terms of making sure all this runs smoothly and they do all the heavy lifting I just try to stay out of their way and we continue to have very positive results so I want to give a thank you to them and with that I'll turn it over to Nicole with Petillo Brown and Hill who's our external auditors. All right good afternoon as Chuck mentioned my name is Nicole Bradshaw I'm the audit manager with Petillo Brown and Hill this was our first year to work with the city so we're definitely very excited to get through this process for the first time we're very happy to be working for the city and I also want to reiterate you know the the city staff especially finance put a lot of work into putting together these comprehensive annual financial reports for you guys and I just want to commend them for the amount of work that they do and we think they're doing a really good job as well. For my part I want to talk about our opinion letter it starts on page one of that CAFR it's ultimately what you hire us to do is to express an opinion on whether these financial statements are materially correct. This letter on page one basically says that these financial statements are the responsibility of management and that our responsibility is to express an opinion on these financial statements and I'm happy to say that we're giving the city an unmodified opinion it's also known as a clean opinion and it's also the highest level of opinion that we can give so that definitely speaks very highly of the city and the staff and all the hard work you guys do. We also did a separate single audit report and we have to perform a single audit when the city spends more than seven hundred fifty thousand dollars in federal or state awards and for this year we had over seven hundred fifteen and as expenditures of awards for both federal and state grants. So when we do a single audit we're required to perform our audit in accordance with government auditing standards and these standards essentially require us to evaluate the internal controls over over financial reporting as well as compliance with laws and regulations that can have a material impact on the financial statements and a letter in our single audit report basically we explain kind of those responsibilities and also it would be a place where we would document any findings as far as material weaknesses or significant deficiencies in compliance or controls and I'm happy to say that we do not have any findings to report over those areas as well so it's very good and the second part of that is actually performing the single audit we had a few programs that we had to test and there's a letter in the single audit report that kind of details that we had we have to evaluate the controls over compliance for those federal and state programs and we also have to test compliance specifically with those programs and that we are giving an unmodified opinion on compliance with those federal state awards and essentially that means it's a clean opinion we have no findings to present for those federal and state single audits as well so very good for the city also so that's all I have unless you have any questions or anything else for me mayor protein as it relates to the federal and state awards the single audit that you you did are all of those in internal to the city who is there a single department in charge of keeping us compliant or is that kind of doled out to the various departments in which those grants most apply to most of that is spread out across departments because you have departments specifically handling pieces and you have you know various grants summer transportation related you have some related to ambulance they're kind of across the board you know so you have some with police and things like that so a lot of those departments are handling those specific compliance requirements that they have separately mm-hmm okay great thank you yes customer Gregory so I guess it may be because it's a auditor talk or accountant talk but an unmodified opinion or a clean opinion doesn't sound I mean sort of an underwhelming but but you indicated that there were other opinions that you could give yes so are there dirty opinions or what what are the other well that would be a modified opinion or we could qualify or me not qualify modified opinion which would essentially say we say everything's materially correct except for certain things so we'll say okay everything's correct except for cash or some specific item so we do not have any modifications which is a good thing I think the old terminology for it used to be unqualified but to me that had a negative connotation and I'm assuming the standard writers also thought that kind of had a negative connotation by saying if it's un qualified well why isn't it qualified so they changed that to unmodified so essentially you could have other various various opinions you don't really want those opinions can we disclaim and say you don't have enough information for us to actually provide an opinion so if all of the opinions that are possibly available for you to offer I'm assuming then that you're giving us the best one that you've got yes okay that is true that it's the highest kind of freedom absolutely that's definitely the highest level anything below that either means you're getting in like a negative opinion or there's something that's being excluded you don't want any of that other stuff okay well thank you any other questions and the audit finance committee did hear this report in a great much greater detail this morning so yes well I just want to thank our staff for doing such a great job again this year to get all this together this is I was on the audit finance committee for a few years prior to rolling off and just understanding all that goes into this and so it's great to hear you reiterate that both in terms of their cooperation they gave your team but also in terms of just making sure that what we're stating is the financial condition of the city is what it is and so I appreciate all the controls in place all the people doing such a great job yeah and to sort of say what you did in the meeting being a first-year audit it does provide or present some additional challenges just to get everybody together and and work together as team and it went very well so I want to echo your sentiments mayor pro temp to the staff and to the audit firm thank you so much for for your good work thank you any other questions oh go ahead let me just say this too obviously things can come up and you may end up having additional questions we do work for you for you the council and if there was ever a time where you had questions or needed us for anything we're always available if you happen to look at the CAFR have specific questions we would always be happy to answer those anytime great right thank you oh yes councilmember breaks but it seems that everything went well but the audit finance committee you said had the longer presentation on it this morning I'm just curious if there's anything that that committee would like to share with council that came up or everything's good or if we're going to get a report on that sure I mean we talked about some of the I guess it depends on how much in detail you want to go into there were you know there were a couple discrepancies in reporting and we talked about basically reconciling how those things are reported and please jump in because I'm really paraphrasing here for the most part we've been into more detail was specifically the departments we worked with some of the controls we tested some of the areas where we walk through procedures and even in general with the account system has what specific audit work we did just to kind of a better understanding as outside auditors what we do what we're looking at so a lot of it really was explaining those kind of things we did have a few things a few minor things that we talked about as well and but really a lot of those had already been resolved some of them with policies and things of that nature okay thank you thank you very much appreciate it thank you for your presentation you bet moving on to agenda item 3b receive report hold discussion give staff direction regarding the use of the Prescott track at us 380 and Virginia Street which is currently owned by Denton municipal electric good afternoon mayor council members what's being passed around is the presentation that you're going to see up here on the screen today we're here to talk about some property that's currently owned by Denton municipal electric back in October of 2015 if you recall DME came and asked for permission from the council to purchase approximately 10.94 acres track of land that's known as a Prescott property it is they were needing it for some easements for their 138 kv line power lines and we also needed some public utility easements on the northeast corner of this property since that time DME has built the 138 kv power lines and has no other plans or uses for the remaining part of the property back in May of 2016 DME was approached by a developer who submitted a proposal to purchase a portion of that land that proposal was shared with council in a closed session in July of 2016 and as part of that conversation council was given information by staff on some alternative uses for that track of land staff was directed to do some further research and then returned back to council with a more formal proposal and that's what we are prepared to discuss with you today just to get you synced up the Prescott property is located at US 380 and Virginia Street and the property that we're talking about specifically is located here within the inside the blue line as I mentioned there were some easements that were needed on this property the blue shows the DME easements and then we are also using some land for sanitary store easements there is a flood plain on a portion of this property regarding the floodplain we did an engineering study in order to better understand the amount of land that might be able to be reca ptured what type of work would be needed and what impact that would have to any environmentally sensitive a area or ESA DME did contract with Teeknall Per kins to do an engineering floodplain study they came up with two options the first option was to just submit a model to the Federal Emergency Management Agency that shows the existing floodplain with the topography that's there today and that's indicated by the yellow line that's the hundred-year flood plain that would not require any kind of dirt work the second option would require some sort of excavation and fill to reclaim a little bit more land particularly along the railroad side of the property they would require a conditional letter of map revision or CLOMAR construction plans excavation and grading of variants from planning and zoning and possibly even an alternative ESA may be submitted any work however done to this property would not have any impact to the riparian ESA and it would increase the frontage along the railroad section of that property from about 270 feet that's currently outside of the flood plain and increase that to about 325 feet the total development developable area would be approximately 6.5 acres as far as the conceptual land uses there are a few being proposed here one would be the fire departments interested in using approximately two acres of this location for a new fire station it would it's a primary location for being able to deploy a future infill fire station and it would provide great accessibility to the eastern portion of our community as particularly as we're seeing a lot of growth out in that direction the police department is also interested in having an office in this new fire station there have been discussions between the police department and that can happen this would this would be an office that would have computer connectivity phones body camera docking stations and it would allow the police department to keep officers in district and able to complete some of these tasks without having to drive all the way down to the central location the parks departments also interested in establishing a trailhead and I'll talk to you a little bit more about that in just a minute and back in July 2016 the Denton County Transportation Authority submitted a letter of interest in utilizing some of this property for a couple main reasons one is to mitigate some immediate parking needs for DCTA and some of its partners secondly would be to implement a new transit service along the US 380 corridor and then lastly for sometime in the future possibly extending the a train rail corridor up to that location they would like to have approximately five acres to be able to get that done a more immediate concept plan could look something similar to this where DCTA would address some of their near-term plans for which would include a parking ride location with approximately 350 parking spaces they would share parking with the Denton trailhead and fire department they would be able to operate a shuttle service for the downtown Denton Transit Center operate a shuttle service for Texas Women's University they would also be able to locate this parking ride for a high-intensity bus service along US 380 and then longer term they're considering using a train extension to this location to be the end of station for them. So why 350 parking spaces that seems like a lot? I've got some folks here from DCTA that probably answer that. Would you like to come up and answer that? Sure. Thank you Mr. President, I'm the president of DCTA. What we really looked at is and before I start I also want to recognize Richard Huckabee is here today. He's your representative on our board as long as well as Raymond Su arez and Christina Brevard from our staff. When we looked at that you can get about a hundred spaces per acre when you look at the end because of the flood area and it's not necessarily all regularly shaped and so when we looked at those numbers the space allowed five acres was about 500 spaces so that's on par with our other stations. We're trying other than the downtown Denton station which has I think 80 spaces 60 spaces 60 spaces and that's really what we're trying to address initially with this is how can we you know and we 've been working with staff a great deal to try to figure out how to address the parking shortage in downtown Denton that also appears to be symbiotic with the needs for parking for the restaurants and entertainment venues in downtown Denton as well. So those would be shared opportunity for shared parking in those areas. So this is part and parcel of trying to figure out working with you know how to figure out not only look into the future but figure out how to deal with parking near the DDTC in City Hall East. So on the ones you said that you you have 350 which is kind of what what you do besides downtown what percentage of that is is filled or used currently? If you depends on the station you 're looking at Med Park is probably 40% filled between 40 and 50% filled most days we overbuilt some of those to accommodate future growth. Thank you. Yes ma'am. Thank you. Also part of this initial conceptual plan you'll see the fire station there and fire department does plan to include this in their next CIP bond discussions. John which number would that be? That would be I guess that would be nine eight is the one that's teed up for the property that's currently was purchased along Breaker and Colorado. Okay so you're saying that would be one that would be brought at the next CIP which was what don't we? Well I think we have it teed up for around 2020 will be the next bond proposal for the public. As I mentioned Parks is interested in using this location also for a trailhead the property is located down there lower right hand corner the Prescott track. They there are plans for a trail connection north of this location in the Cooper Creek area that will go all the way up to the Av ondale Nettie Schultz Park which you see there in pink are trails that already exist. What's in yellow is what staff has been working on trying to work out a way that might be connected down to that property down there. Parks would also be interested in partnering with either the fire department or DCTA for constructing some sort of outdoor public restrooms that could be accessed from outside of a building or standalone. This side also could eventually connect to the trails on the northwest Denton Evers trail that goes up to UNT Discovery Park in North Lakes that's what's being constructed right now that's the what you see in green. Going out east on 380 there are plans to bring a trail underneath Loop 288 and then along US 380 where it can connect to May hill. From Mayhill it can run south and then connect to the rail trail corridor there at the Med Park station. It can also continue to run east and connect to the Greenbelt trail and that Greenbelt trail as you know runs all the way north up to Lake Ray Roberts Dam so there's some connectivity that can occur from that side as well. The zoning for this property is Employment Center Commercial ECC. As you can see the properties around it immediately around it are also ECC with one exception. Driveway access to this property will likely not be approved for US 380 from TechStat because of its proximity to the Loop 288 ramp however that won't be a problem for the fire department because Virginia does have a crossover there on US 380 so the fire department would be able to either go east or westbound on US 380 from Virginia Street. A fire station is classified as a community service that is a use that is permitted in the ECC district. Other land uses that are permitted in ECC include hotels, commercial parking lots, light manufacturing, parks and open space. The property just north of the Prescott property is Employment Center Industrial or ECI and it is approximately 640 feet from this property line to the residential subdivision just north of that ECI track. There is also further to the west off of just west of Old North Road is property that is zoned Commercial Mixed Use General or CMG as well as neighborhood residential mixed use and RMU and just north of that and that's the salmon colored just north of that area there are some single-family homes that are currently being built and it's part of an Old North Park phase 2 development that was plotted back in 2016. So staff is seeking direction from council to determine what your pleasure would be with this property if DME should continue to work with a private developer and sell parts of the Prescott property for them to develop or should staff work in forward with any or all of the uses here for the Prescott property or did you want us to pursue something differently? Council member Gary. Thanks for the presentation. What is the taxable value of the property that we're talking about so in terms of a cost-benefit analysis of keeping this property in government hands versus selling it? Well it currently is owned by Municipal Electric so it's not taxed at this time. Okay do we have an idea of if we were to sell it what the taxable value may be? No ma'am we didn't do that analysis what we did do was to try and determine how much DME paid per square foot for the property and if they were going to sell off portions of that what that score footage price would approximately equate to. Okay Mayor Portem. I think I've got a couple questions that might be better addressed with DCTA to understand more in depth their vision for this piece of property. I don't know who's best to come up and address those and so it sounds like you have you've identified some near-term issues. One I think you said was a park and ride even in its connection to downtown Denton to alleviate parking down there for the transit station which is now the terminus. You mentioned also TWU shuttles. Are you guys currently running shuttles for TWU? We are not and we have been in various conversations with TWU staff like any higher education institution they are struggling with parking issues as well so there's a real an opportunity for us to partner with them to provide remote parking capabilities at this site and it provides the shuttle service to their campus. Gotcha and then you also mentioned a possible bus route on the 380 corridor. Is that something in plan that's being planned currently? Yeah it's been a few years about a year and a half I think since we updated the council but we had been talking about regional Highington City bus service which basically is a commuter bus service much like what we just launched in Denton to Fort Worth on the 35W corridor but one of the corridors that we've identified as a great potential for that type of service is the 380 corridor with the massive growth that you're seeing in northern Denton County and Collin County and the connection between the two the 380 corridor is very congested and it would be a great candidate for commuter bus service so this potential property could be a great park and ride for that service. And then the extension of the A train concept which sounds like the most far out idea out of all these not far out in the 70 cents far out in the time sense. Is that understood as a terminus we're just extending the final northern most part of the line out there or is that part of a larger project of saying perhaps we're gonna push that down the 380 corridor as well? Really for our vision right now it's just that that would end up being the final northern terminus in lieu of having the downtown Denton Transit Center be the terminating station because of the limited parking and the land use that is around the DDTC and the growth of ridership and again the growth of population in northern Denton it makes more sense for our agency to look at extending the rail line a few miles northbound where there's land where we can have a larger park and ride. When you look at commuter rail stations the end of lines are typically where your passengers will park so we need some additional parking so this piece of property really makes sense on multifacets the near term and the more future. And the reason I ask these is because we 're one third of your major partners in DCTA and so kind of our visions you need to be united and thinking about these long-term things so my last question is as it relates to if that were to happen is the idea that the rail line would come parallel to the mingo freight line that's currently there what's the path between downtown and there? I'm gonna pass that baton to Raymond Torres he is our chief operating officer and has some a better understanding of rail operations. Thank you Christina. Members of the council with regard to the extension of the a train service we've had several discussions with the UP because they own that that track currently it'd be advantageous for both railroads to stay separated for various reasons but one of the predominant reasons is with with the amount of freight they use you will be utilizing a technology called positive train control which is a different technology than what we 'll use on the a train service so keeping the two corridors separate is for the three miles makes most sense for both both authorities and in order to do that we would need approximately 50 feet of additional corridor to allow for the two train systems to run separate separated but it would run along the mingo road property to the Prescott property. Okay thank you very much . You're welcome. Councilmember Bosney then Councilmember Gregory. For me the value on this property is the land banking for police and fire that as we grow as a city the extension of our emergency services is key and you explained that this wouldn't just be a fire station that it would also have a component that served our police station so that they had an anchor satellite station up there and most importantly with body cams to allow officers to come in download the cameras before they go home because otherwise they have to go all the way you know into the main station so for me the value on this piece of property is land banking whatever the fire station and police station needs and so my question for our assistant fire chief who is here is this property adequate for their needs if we land bank or do they need any more property than we see on the map? This is Robin Polsgrove fire chief yes so what we've identified here is certainly adequate in our planning process what we've identified is it would be an infill station so smaller than the footprint that you toured at the new station too but infill in that location we've identified a property with that certainly satisfies our needs and also key access points while while identifying what the remainder of the property would be for alternate uses as it's this particular infill based on response times in that area growing number of responses and delayed response times right here at station 2 on McCormick and McKinney McKinney and Mockingbird I guess is where the new station is we were drawing those units as we go up to a growing number of responses up into the station 4 area the immediate way that we're going to address that is by proposing a medic unit at medic 4 but in terms of our long-term planning this infill station is part of what we 've projected when we talk about a 2020 bond election mayor of course what we've got is a number of different checkpoints for the council and for our citizens to weigh in first it's whether or not they would identify as the citizens group that that this is a project that they would support on that timeline and then council approval also then on an annual basis based on economic conditions you get a chance to weigh in as to whether or not you want to do the annual funding approval and when we get to that point of course we know we've got an impact on general fund because of a of a new unit but even with a 2020 bond election it's very conceivable that we wouldn't have an operational unit in that side until as late as 2027 so what we're doing is is planning in the absence of planning we're we're reacting and by planning what we've got is the opportunity to present to you today but we think it's a very creative proposal that serves a lot of other needs with the single piece of property. Yeah yeah she had a question for the chief do you want me is that okay okay were you finished okay let me go with her first yeah so thank you for that and so again I would emphasize to council how important it is to land bank for future planning that instead of reacting to growth and saying oh my gosh we have growth now we need to buy land for a fire station in addition to building the fire station it's smart planning to land bank that property hang on to it and at which time the bond either comes together or future planning but we are growing as a city and our emergency needs are growing because of that so I appreciate the fact that you've looked at this and I support the police and fire taking that portion of this property and hanging on to it for a land bank to when the time is right build police and fire and then my other comment on the number of parking spaces and so I think I'll ask mr. Cabrales to come up thank you chief thank you is this correct to my reading this where it's a hundred and fifty plus 350 so it's a total of 500 I'm sorry ma'am what are you referring to I'm looking at the map where it says long-term parking 150 and near-term shared parking 350 I'm gonna have DCTA come it's their proposal so let me have them talk about that it's so this was it's in terms of the long term it's not long term as in like the airport long-term parking it's just as we see it the first phase would be the 350 spaces would be the initial and then we would add the 150 if we ever brought in the current thought is that if we're able to bring that extended the rail station up to that point yes ma'am so what's a guesstimate in time for a station to be built are we looking at five years ten years I would say probably closer to ten I still say I think looking at the floodplain that that is a lot of parking places and to say it's going to help downtown is a bit of a stretch because your bars and your restaurants are quite a distance away from from here and even though you know there would be talk of some bus service we really need parking in downtown Denton I think this would serve commuters if and when we're able to bring in not even the train but but you know bus service possibly some help for Texas women's but I I think considering the floodplain area that's a lot of concrete to pour initially so I'd be open to a parking area just not so big and it looks like the eastern portion would remain floodplain because there isn't anything indicated in that section and then again parceling out what the fire and police department need in the front section but I think the city already owns it ie DME and I think we need to land bank for police and fire cut back on the parking and I think I'd be okay with the plan I would say that you know we I have yet to meet a term seen a terminal station from from a railroad that ever had enough parking that's one of the things that we were faced with but I think the most important thing is I'm gonna follow up on what mr. rodents that a minute ago is that we will work with the city we are part of that long- term plan and so how the long-term planning of the city fits in and how we weave into that fabric is what we would work through so if it's the size of the parking much like the parking lots that we have today where we work very carefully with the city staff to develop those in the design program and as we go forward with this it would be what we would provide at that point would meet those needs and work hand in glove with the city thank you customer Gregory I thank you hi first question is does anybody know who Virginia Circle is named after well I didn't think so but her name is Virginia Moore she was my high school typing teacher for those of you who were too young that would be called keyboarding today her husband mr. Moore had a construction company and he owned that land and there's a building back there that he operated out of he taught me how to make Mulligan's stew in the Boy Scouts I think we ought to rename the street Virginia Moore Street so that more people would know moore I think I think we're out of posting okay we ask another question it 's out of posting and I really think that this probably is I'm I'm very interested in and delighted to hear about the extension that the idea of the extension of the a train up to the northeast denton I'm and this is probably for some type of a staff report to come back it does make me nervous that it's taking about 50 more feet along the mingo road because we've already discussed about the need of lightening mingo road and so I would like to hear at some future time what that impact is because all of this sort of kind of weaves together so I don't know if it's appropriate to hear any discussion about that now or if we should just wait I think that's probably not right yet okay I think we were probably more discussion to have depending on the direction that we give here on on this particular I'm comfortable with moving ahead with the proposed uses of the press cop property I share a concern about the parking but I think that maybe we could address that simply by looking at previous parking that would that would mitigate some of the the drainage issues if that's what it is I understand Councilmember Begheri's concern about maybe putting that property back on the tax roll but that would only mean taking some other property off of the tax roll to provide for the fire station so I think it's it may not be as big of a piece of property but then we lose the other uses that we could have and I'm particularly enthusiastic about the idea of providing some facilities for active transportation for bike and pedestrian trails. Let's see I can't remember though I think you were first okay yeah go ahead Councilmember Beg heri. All right have there been any studies on the need for public transit use around that area so any use studies? I'll let the CTE answer that. We look at the 2040 plan from cog we don't have a specific ridership estimate from that area right there most significant is our terminus station right now is in downtown Denton and we just like the city struggle with having parking immediately adjacent to that station and near the downtown area and so part of what we look at is if the at long term if the terminal station could be further north and closer to 380 where people coming into town from you know using that point to access instead of coming into downtown we could take congestion out of downtown and competition for parking spaces. Okay thank you I have another question for Chief Paulsgrove. Thank you. Thank you Chief. How far is this proposed location from other police stations I'm sorry other fire stations specifically? Well it's it's midway between two of our our stations and we're over I think over two and a half miles from each of those stations it fits with an infill criteria that we would use. Typically how far are the stations from one another? Well of course we've got many areas of our city limits that are currently over five miles from an existing station so there are a number of planning criteria that we overlay. We're also looking in addition to the distance from an existing brick and mortar facility we're also looking at where we have the call demand and what that impact has been on response time. Overall the the report that we'll be providing for for the city within the next for the City Council in the next few months on our experience over the last two years has indicated that once again last year we had a double-digit increase in our total call volume with the majority of that being in the medical call volume area which is why we focused over the last three years on infilling with medical units. As we project into the future at the areas where we've got the the very protracted response times and then the areas of the city that are underserved based on development and the distance from existing stations that's where we've started to project with the land banking for future infill stations in the future. So it's the fire department's position that this particular property would alleviate the call demand because of the location or would alleviate the time the response time based on the increased call demand? The response time. Okay I mean I guess my question is I'm trying to think about call demand is it coming from throughout the city is it isolated in particular quadrants like where is the call demand increasing? We're seeing a significant call demand system-wide the largest area of call demand is southwest and in your in your allocations in this last budget cycle you've helped us to implement the temporary station 8 and put in Medicaid as of January 1st that helps us with the medical response time southwest. We're also seeing significant call demand east and northeast and protracted response times to the medical alarms northeast because of the lack of a medical unit and then pulling the medical units that are central and east up to the northeast area. What we've also seen in the last year is that while it is not one of our highest call volume areas the greatest increase in call volume over the last year occurred northeast. Significant call volume associated with the razor ranch kind of development in that area that we're seeing a lot of infill and in density now and also a lot of traffic congestion that slows down our response times in that area as well. Okay Chief I think that's north razor ranch is northwest yes and yeah no that's okay when you said your greatest is southwest I think southeast and you're talking about where the 2499 area and all that is okay I just want to understand yes I met south you're good I need your help mayor no no that's fine so it's the greatest increases been the southeast for the medical calls is that right? That is correct. Okay 2499 and then also northwest has been seeing an increase so I want to support the fire department as much as possible I just want to make sure that the the land that we bank is appropriate for the upcoming development that we have and just for the time being we haven't seen a lot of permits come through for that eastern quadrant of the city we're seeing a lot of things come through from different parts of the city particularly south so if there's some way to overlay you know the permitting with growth anticipated calls anticipated I'm feeling a shortage of data for this particular location that's I'll just summarize it that way and then thank you I do have a question for mr. Cabrales as well. Okay we are the highest the second highest call volume area is station 2 McKinney at McKinney and mockingbird and we are preparing a data report of our analysis of of a multi-year with being able to add in our last year experience to give you an idea of what we're experiencing overall and to tie it into our proposals in the coming year. Okay thank you council member. Okay so the questions for the chief okay so you said infill station can you that's a smaller station right yes so does that mean no medic unit does it mean a smaller truck does it mean two people I'm just trying to get a better idea of what what an infill station is. An infill station in this case we would look at staffing with a single engine company but providing a bay for expansion for an additional medic unit in the future whenever we build a station we want to provide for the opportunity to house the equipment that may be needed but in when I use the term infill we're talking about now coming in between existing stations and coming in based on the growing call volume as opposed to those stations that we would project longer into the future we've got a lot of a city of Denton that is over five miles from our northeast and northwest fire stations so we know that there will be in new stations there I contrast that with an infill which is adding a another station into a core area. Because you mentioned that it wasn't the same size so I didn't know if it meant that it was smaller than then say another area or if it's still the same. It would be smaller a smaller footprint we also project that when we build station eight on the property that we've land banked on Brinker in Colorado that would also be a land bank station it would be a smaller footprint. So I have another question there's been a lot of questions about parking all the spaces there with that many spaces and cards coming in and out would that interrupt the flow of the emergency vehicles? No not nearly we don't think nearly so much as sharing the space for some kind of a retail operation. We also have provided in in this footprint design access off of Virginia Circle that we think will provide ample protection for the fire service. One of the things that we want to consider in this particular case because we do have a high traffic artery is we probably want to include in that design that the blinking exit lights in the initial design that will help us. Thank you. When I visited the McKinney Street station you were explaining to me how because of the increased number of runs that they're making both fire and medical that what that's doing is pulling then from the Kings Row station to have to go and cover it there's another call which leaves that area. Is that part of what this does is it's it provides this station would provide some some backup for both the Kings Row station and the McKinney Street station? That's correct what we the the call volume east is pulling the Kings Row engine south and the lack of a medical unit at Kings Row is pulling the the medical unit here at McKinney up north. A couple questions I I'll just try to address you while you 're there. So my understanding is in in the newly reconstructed fire station for there will be a medic unit is that correct or no? It is a proposal that we will be making in the current budget year. Yes because it seems like for my if I can remember it's the medic calls it and of course I know all fire trucks are staffed with paramedics that's correct but the the ambulance provides also the transport which is critical a lot of the times and so this is a 10-year lookout is what you're saying and I guess my my I don't know if it 's concern my observation is when you say an infill I get the need for that when you said it was gonna have a fire an engine but maybe not a medic unit sometimes I think it seems like our most of our need is our medic units and if I'm not remembering that data don't hesitate to correct me it seems like most of our calls are medic calls either with with an engine or transportation available is that is that right? Absolutely 70% of our calls are are medic but with a medical call we respond a medic unit and an ambulance what we're looking at being able to do with the the the new CAD unit is being able to do some some call triaging where some of the calls will be responded to just by the engine where you keep some of the medic units in service so you're looking at trying to improve response time by also reducing the number of units that respond to calls based on a triage of criticality. Right well and I think and because I know that we've had that policy where both an ambulance and an engine would respond and there's been some question of if that's if you're able to triage in a way that you feel with a high degree of confidence that transport is not going to be needed then I think that certainly does provide some efficiencies of our you know assets. Yes sir. I think my only thought on that is let me just say off the top of my head I don't really have enough data to really give what I would consider clear direction from my perspective on this particular issue because a 10-year outlook for I mean if we get a lot of growth up in the northeast section this may be already I don't say obsolete but it may be do we want to have something that's further north because you said what's happening is a lot of the some of the outlying parts of the city limits are five or six miles away from the nearest station so I'd like to see a little bit more data on on that and sort of our demographics on because I know a lot of that area is is the river and there's some geographical barriers that would hinder sort of development as west we've got coal ranch and all these kinds of just vast kind of prairie lands that are real conducive for that kind of development. From the DCTA perspective would like a little bit more information on the timeline it seems like part of the request here from DCTA's perspective is it sort of solves an immediate need with parking downtown well I mean I know we've talked about other ways to solve that with some areas around downtown so I'd like to continue to further explore those. 50 feet off of Mingo Road I don't know how that's that's gonna be difficult that's gonna be difficult so I'd like a little bit more data on that as far as what's the cost what do you anticipate the ridership to be just some some analysis of that from that perspective as far as the trails again the trails how what kind of plan do we have for the I mean these all look good on on their face I 'm not saying that the the DCTA component I'd really like some but how much is that going to cost does it cost the city's contribution anymore to have a station out there how much does it cost to have the additional bus service what is the ridership anticipated to be and the like the trail for the parks what kind of timeline are we looking at on that I mean just sort of a comprehensive I mean we we thought about selling it to a developer you know that's what really precipitated this conversation and the developer could come in and say well this is what I'm planning to do with it this is what I'm planning to put here this is the timeframe for it this is what we believe will be the economic impact so forth and so on I would sort of like to approach this that same way if we need land banking what are we buying it for we're gonna have to reimburse DME what does that cost what is the projection in ten years where we're gonna need in that area just some real strong data on on this piece of property we got time obviously it sounds like I mean it doesn't cycle up where the DCTA component may be a little bit more time-sensitive but for a ten-year outlook you're saying it wouldn't be built probably till 2027 the trail don't know what time frame that is so I just like to have a little bit more specific information on that and it's not going anywhere I don't presume and I would like to understand what who's made what kind of inquiry and if an offer was made on a private development what that might have been just to understand here's here's the two options we have here's the economics of it here's the land banking opportunity for the fire department those things are certainly important and intangibles that we need to consider it's just a matter of some specific I think data in that regard just that's that's my that's my thought on it yes yeah I would be most comfortable with two at this point too I know we don't have a lot of data right now but with the police fire DCTA parks all showing interest in it I think it's always easier to use a piece of property that is already in our inventory than possibly having to go out and maybe even going through em inent domain so I know there are a lot of unknowns and details not known but number two is what I'm most comfortable with and I don't mind that I'm just saying I want a right to change that based upon the data I mean I don't mind pursuing that I mean I don't know if we want to necessarily cut off if somebody comes up and makes an offer that you can't refuse I mean real estate right now is at a pretty high premium and I think honestly for me the DCTA component of this is the most critical because I think that's going to be the majority use of this property based upon the parking based upon the train station proposed train station bus proposed bus routes that's going to be outside of the fire department that's going to be the other pretty major use and I just don't have enough information about what's the timeline is that cost are there other ways we can meet their immediate needs in that regard because we may want to utilize it for something else within the city and so if we're going to make that decision I certainly want to make sure that we have enough data to do that so repeat your direction mr. Cabral's sometimes that's hard to do mayor pro tem yes you know it's not often you get a project that meets this many needs I mean this was initially for electric easement ultimately able to solve problems with fire police DCTA parks that's a that's a pretty good deal to have that in one location to get all these folks working together which typically siloed governmental perspective so I appreciate the need for some more discussion on this I would think that we need to be thinking alongside with our partners in very long-term ways because these are very long-term projects and you got to think think about it in that point of view along those lines it seems like with that many needs which is encompassing both active transportation public transportation ultimately I think if you put in some perspective of what might be along mingo if you could even get an extension of the rail trail along that road which would solve a number of problems and may even rethink our structuring of mingo now a TWU redoing their property along there's a lot of possibilities here so my question for you is is this even being ramped up from a transportation perspective perhaps to be ready to go if there's a call funding mechanism in place that's this in my opinion seems to be right for that sort of active transportation grant public transportation grant something along those lines yes sir and actually what prompted that was the initial discussions that took place with Texas Women's University as you recall they were trying to figure out whether to close Bell Avenue or somehow maybe reconfigure that and as part of the discussion I know that mr. Nelson our transportation director has been also looking at the possibility if in fact it looks like they're going to repurpose their golf course there there may be an opportunity for us to be able to capture some easement for further widening of mingo road and if that's the case particularly also partnering with DCTA if they're going to need 50-foot right away along that section as well then those are discussions that I know that he's trying to have with the North Central Texas Council government RTC and looking for any kind of funding opportunities that may be coming up on the horizon to be able to acquire some easements for either one of those uses so so I think I think what would help us along all of us is a large larger context from a vision perspective even what are we wanting to do from a transportation perspective I mean if I'm thinking about the future transportation of Denton I would be thinking somewhere along that that nodule of 288 and 380 because of all the traffic you have going on that 380 corridor and DCTA is a regional transportation thing it's not just for the city it's meant to connect this reduce traffic across the board not just for our citizens but for everyone in the region so anyways I appreciate the need for more information I beyond just looking at data and property values and things like that I would like us to position that from a what's our vision where are we heading and who are all the players that can come and and I and I can appreciate that I just know we've had these conversations before not with these particular players but when you're talking about 10 or 20 years out those things change a lot so the more information I can have going forward with a vision is it makes a decision number one it locks it in more because you have people that are committing more to this is what we're planning on doing it's it's easy to go and plus we had a conversation with TWU about if that occurs that extension occurs what what's the probability of getting a stop there at the university close to the university right there whereas it seems like the idea is you take them there and then bust them back to the to the campus so I agree let's talk about the vision but there has to come a point where we began to really put some legs and bones to that vision in that regard yes to bring us back to point what staff is asking right now is do we sell it do we keep it so I vote for hanging on to it until we fine-tune after additional information has been gathered and so I am not interested in pursuing developers to buy this it is a key piece of property in a key part of the city that we do need for transportation we do need for land banking for police and fire how that all shakes out we'll just get some more information and figure it out but at this point I can't vote for selling it to developers at this point in time it's in the city family of ownership and I think it just is smart for the city based on location to hang on to it and figure out what those long-term plans are because we are growing and long-term planning is smart it's just smart so I can't discuss selling this property to any developer the city needs to hang on to it and figure out what it is we do with it thank you councilmember Gary yeah the location is really an important piece of this it's at the intersection of loop 288 and us 380 and I'll just remind people the amount of money that the city spends to lure businesses here and to develop high density properties and to expensive expensive developments let's put it that way so I had to go through my notes and figure out when we actually had the closed session on this and looking at a similar property to the one that the developer has proposed the taxable value of that is nine point nine six five million dollars right now so we're looking at not only the land value which we purchased for 1.7 million it's undoubtedly gone up there 's no doubt about that we're also looking at about sixty five thousand dollars a year of tax revenue that were just we don't want anything to do with that that's money that could be used for police that's money that could be used for fire for transportation then you have the development effects surrounding if you have an anchor at loop 288 and 380 you're gonna get development all around that corridor and it's gonna increase the taxable value of that land which is gonna further multiply the money that comes into our coff ers and that we can provide for the public so I think I think realistically that property needs to be developed in private hands and we need to get that intersection to its highest and best use which I don't believe I've heard anything here saying that this is the highest and best use of that land I'm in favor of selling it yes as a comment to that only half the property is build able because of the floodplain so while you can look at the whole parcel and say wouldn't it be great if the floodplain is going to prohibit that whole eastern one-third from building and development so I think this is highest and best use based on public emergency services are number one and if our fire chief and our police chief say we want an anchor in this part of town to build out to then it's my job to listen to them and to respect their opinion if DCTA says a long-term transportation needs this would be a great place for transportation needs in the north eastern part of the city but if you look at that parcel of property so much of it is floodplain and cannot be built on legally cannot be built on so while I respect your opinion that you know to try to bring in an anchor only half that property is buildable okay it sounds like to me the consensus is at least at this juncture fortunately this isn't a decision in totality that has to be made tomorrow is to move forward with the additional needs of remaining in the city how do we develop the vision that has been articulated here and some more detail of those visions and also for me is how do we you know when does this transfer if the ultimate goal is to transfer it to other departments when does that take place we got to figure out a price on it and all those kind of things which you know the devil's in the details so to speak but I think we need to somehow marry the vision with the details to be able to truly understand what we're looking at here so I think that's what I've heard is the consensus with Councilmember Gary obviously sharing a different option than that one any other questions or discussions on this yes oh sorry yes can I just make sure to justify the amount of parking the 350 plus the I guess the 150 spaces in the future and see if there's any studies that could bring that down okay okay thank you that's it all right oh yes one more yes is that proper is that property data to DME or is it's data to the city the city the city owns a DME as a an easement on it it's my understanding so the funds that purchased the property was city funds or DME funds DME funds okay just just wondering things and it's yeah it's always been interesting how we buy things from ourselves and charge anyway I won't go down okay moving on we'll go on to our next item which is speaking of DME well I'll tell you what let's just take a five-minute break because this is going to be probably a fairly long session so let's come back about 225 or 220 you you Los Angeles in California but then here in Texas San Antonio Austin larger cities to also have this well utilities any questions that was an interesting fact about the name I didn't so before deregulation it was not that brand you see department you just like it was the electric department just like the water department I did not know that so that was that was the beginning of why a lot of people wanted a branding because they because it was unknown what deregulation was going brain and if the city miss no utility was going to have to I mean the feeling was that everybody was going to eventually have to opt in so we've seen information in the packets and I won't read through all these definitions I'm gonna go through them instead on the page itself as far as the revenues and the expenses base rate revenues are just that there the the base rates of facilities charges and demand charges that fund you see an increase going along part of that increase is the growth of the sales part of that is it started in 2014 we started having some base rate increases two and a half percent four and a half percent and those increases were mainly put in place to help help fund paying off the TMPA legacy debt so that's what's caused those increases going along also in 2015 several utilities started seeing a transmission cost recovery factor in our cot the legislature directed the Public Utility Commission to push the industry to develop a massive amount of transmission infrastructure to be built most of the generation infrastructure work that was new were wind turbines being built out in West Texas and they created an area called a competitive renewable energy zone CREZ and those C REZ projects transmission projects got special fast track to get done and they spent about seven billion dollars worth of transmission in in five years which was unheard of before and as those utilities built all that transmission infrastructure that charge is shared among all load based on their percentage of the total ERCOT load and I'll define their cot here in a minute but we're about one half percent of the Texas load so we pay our citizens pay one half of the percent of the total transmission cost for the state and since that's a pass-through we just made a separate line to pass that through to the customers at our cost whatever our cost is the other significant revenue is energy cost adjustment the reason that's an adjustment is because there are times in the market where the wholesale market price has changed so drastically that you really don't have time to the prices can go up so quickly that you really don't have time to go through a full rate case to come back to council and so this is one place that the the public utility board has discretion and they approve our energy cost adjustment changes we certainly informed council of that but that was put in place so that if the energy market changed drastically we're allowed to do that so we have a balance that energy charge adjustment and we try to keep it within that balance as far as going up and down that's our regular revenues the other revenue portion that we went into definition more TMPA coverage return is really TMPA customers are four cities Bryan Garland Greenville didn't and they have no source for working capital and so we furnished them working capital and then they refunded back to us and it's a continual turnover but when that money comes back to us it 's booked as a coverage return it's a coverage for them and that's what that's booked as it's based on the percentage of their expenses as you can see it goes down drastically after 2018 that's because what we've modeled here is that's after they pay off all their debt and their expenses will lower drastically T cost revenue that's the other side of the transmission costs that's transmission cost of service that's revenue we get from other utilities for paying us a return on our transmission investment and as you can see that's drastically increase in forecasted to increase as we've increased our transmission investment around town and we increase that investment is for use of not only us but it's kind of like the interstate highway system in Denton it's not only that our citizens use that to get around town but used by other people passing through town same way with electricity not only is it for use for us to transmit electricity around town but it's also used a great deal especially when you look at DME didn't in the middle of larger Texas scheme Texas has 47,000 miles of transmission lines and so our 33 miles of line are in that scheme of transmission lines and let Tristi's passing from that West Texas generation to load centers to the east and for us we have a significant amount of load growing to the east of us between Denton and McKin ney the number of rooftops has significantly increased I was talking to co -serve yesterday and they've said the load in that area has increased anywhere from six to ten percent and so the amount of electricity we're flowing through our system compared 2011 to 2016 has increased a hundred megawatts from a hundred to two hundred megawatts so it's increased it's doubled and so that's a significant impact on our transmission system and this is revenue to compensate us for that other revenue is mainly interest income off of funds we have now there's a couple questions but I'm going to try to encourage people to wait okay I'll try to get along so this increase because there's a lot of numbers and I realize this is generally a lot of questions and if it doesn't work it then works no and you know so I'll just my last statement on this page is the interest income on the last line that six that's a six million dollar increase we got from when we closed out the revenue bonds and we had six million dollars refunded back to us that's where it was counted for that's why there's a bump there since there's a lot of numbers on this page do we want make an exception here maybe it's really your call to because I'm just trying to help what we do the revenue piece and then we're gonna expense piece so I think you know councilmember Gregory had a question thank you so TCRF stands for transmission cost of recovery factor and we don't see that show up until 2014 2015 is that because we weren't being charged before is that because of the legislation that happened at that time it became a significant size at that time we had we've always had it a transmission cost and so the choice and we were coming it through base rates and we made a choice to start recovering through its own factor because we knew it was going to increase significantly so rather than continue to increase base rates for it let's separate out that's what we've seen from other utilities across the state is everybody was separating it out as a flow through but that simply is money that we say it's revenue we're collecting that money but that's money that we immediately turn around and pay to ERCOT for our part of the charge for paying for transmission throughout the state and it's one half of one percent of the total amount that it's costing for transmission throughout the state the only slack correct you're correct on every part of your statement example slight technical piece of it our cot directs us how much to pay every other utility so we don't pay our cot and then them dispersing to other people our cot directs us and says here's how much you owe LCRA okay here's how much you owe encore or fast version and and tells them the same thing as here's how much you owe DME all right so and then and then the the TCOS is money that comes to us because of the transmission that we own that that is part of that grid also yes sir we follow that with the Public Utility Commission of Texas and they set our rates to charge other utilities and just as we're getting direction of how much to pay those other utilities they also give direction to us appears how much you owe the other utilities for use of their transmission system so then in 2016 2017 we could take the 12.7 million that we're owed in the 4.6 that we owe others and we have a we have a net okay okay but that's not going to be in the form of a check that you could produce that says you see we actually got this money but there would be some type of a transaction that happened somewhere that we could for those doubters who say we really don't get that money we really do get that yes sir at a later slide on the debt slide we talk about how much debt we owe for transmission related or total and how much we're getting anticipating transmission revenue to offset that okay thanks Councilmember Gary with respect to the TCOS revenue is part of the increase you explained that part of the increase has to do with a doubling of load to the east of us is any part of that increase attributable to the fact that our transmission lines have been upgraded and can now carry more load yes so essentially any part of the transmission system we build whether it's building I mean they can't distinguish right you build an interstate highway how much of that is for people passing through town and how much of it for your native citizens inside the town same way with electricity and so anything on the high side of the transformer which means a high voltage side is turned in to follow the Public Utility Commission of Texas and so whether that 's in the central part of town they might could argue that serving the citizens of Denton or whether it's outside the loop and it's furnishing a route for electricity to go around it and all that's followed with the PUC so had we not upgraded our transmission lines would our revenue actually be less from TCOS at this point absolutely do you know by how much well we were at a point of getting four and a half million in 2011 right so I'm looking at the chart that's kind of why I asked there's almost a doubling of the revenue from it and so if we didn't build those transmission upgrades especially for for routing electricity around we're identified and I'll describe it later by first studies low flow studies if we didn't build that some other utility would have and so either encore or brasses or share lane utilities or somebody else would have built those and they would have followed those costs and they would have earned a return and our customers were paid not the same amount more because their financing their costs could be higher okay so I think what I remember correctly what I asked you was can we carve out the amount of additional revenue that we are achieving by virtue of our transmission line upgrades yes I mean what we'll study that and for a set in a future report it's important for me because we spent quite a bit of money which I know you said we'll have a slide on it transmission line upgrades cost quite a bit of money and if some part of that is attributable to carrying load east I'd like to know what amount that is and you know how we can allocate that okay well take a shot at that any more questions on this slide we may we may just go slide by slide go ahead well I think these that have a lot of numbers on them I think you 're going to bring on I think you forget the question all work together here yes so on the base rate revenue that's the the base right that's the one that the ratepayers pays at the the revenue that we get from them yes well we get the base rate revenue to TCRF revenue and EC a revenue all comes in the electric bill all right from the right okay so just basic math here I mean I'm looking at it and I see that it increases the the revenues increase significantly how do the revenues increase so much but the the rate let's see the megawatt let's see that I'm trying to for my question right so our rates were supposed to go down right the ratepayers with with all of the upgrades and but the chart shows that the rate revenues increase significantly so I'm just trying to figure out how that how that works if our rates are going down but our revenues are going up that your statement is correct these revenues EC a revenues this was what was proposed in the last budget I can tell you in the next budget as we factor in the operation of the didn't energy center and the prices were seen on the renewable contracts were getting that those will be significantly less and so I think it will show a rate revenue decrease in the future from that okay but now it's it's not okay my other question is on on other revenues we've been talking and it may come up again when we talk about the the CIP but as far as the reimbursement that we're supposed to get would that be included in other revenues yes that is in the transmission cost of service remedy okay and do we expect to get that and that's increasing okay so you get a little bit at a time all right yes thanks mayor protein I'm trying to understand your question in light of your answer to in part of at least with the base rate revenues going up is part of that due to population growth growth growth part of that is population growth and and as I talk about capacity increasing I have a later slide that shows that growth and how much it's grown over the past 30 years so we could we could be paying the same or even less and you'd still see you could possibly still see an increase in our revenues coming in just because the city's growing yes consumption is growing some of that growth some of that growth is that and so I think one of the things we're leading to is I would expect that y'all want to see that broken out more of how much of this growth in revenue is based rate increases and how much of it is due to volume growth so we can do that I hope somebody staff is writing these questions down gotcha thank you thanks okay go ahead okay so again detail slide with definitions of the expenses that you've had for your reading pleasure I'll go through those as I go through this slide on the budget expenses the mayor after he saw this pre-drafted this presentation as that we bold some of the lines on here to make a point for emphasis so we've seen purchase power and fuel purchase power can go up or down based on the price of wholesale electricity and as we've seen an increase in 2014 because wholesale power prices increased if this slide went further back to 2007 you would have seen a drastic increase because power power wholesale power prices the gas market used get natural gas used for generate electricity went up and it went up drastically and so I got the pleasure of coming in right after it gone up but then to write it down some as the prices came back down going forward what you see is in 2014 I'll remind you in October 2014 we put in place our energy management organization that organization was under pretty significant pressure of 14 15 people hired and with a motto of go live or go home and they succeeded and went live and have saved citizens 12 million dollars a year on average so far and so some of this decrease is the gas market is a wholesale market going down some is their implementation of doing better purchase power purchases for us on the basis and then as you get out here in 2019 you see the implementation of the renewable didn't plan retail or wholesale renewable contracts at a much cheaper price the payoff of the TMPA debt and and the end of our contract with TMPA and in the use of the energy center to generate services that offset this cost drastically drive down our purchase power costs so you know so while you're seeing an increase in debt and you'll see an increase in personnel services part of that more currently is because of the energy management organization 14 to 15 people and in the the power plant and in another 15 people that increases our personnel services but it's offset by savings we see from purchase power in the future transmission pieces is what we pay other people for T costs that we've already talked about operation maintenance increase again is due to have an energy management organization go in and the power plant going in so that's part of the increase in expenses from that our franchise fees are just a percentage of revenue and then the other lines are pretty self-explanatory any questions on this page yeah question on your purchase power and fuel so in that category is the take or pay component of TMPA in other words if we're having to pay but we're buying power off the market and we're still paying X amount for take or pay so is that when you because you show that the Emo started in 1415 and so yeah you see that drop from 1314 to 1415 you see the drop from 1516 but then you see it increase those next two years what what exactly do you have an idea of what the we based we based that just on I mean that's before the power plant before the energy the new contracts go in place I mean so it's just wind farms all that so we're still buying off the market and so it's just a projection that they look at the natural gas forwards and project the wholesale market based on that it 's just a projection of that market going forward okay all right Phil in 2018 2019 the purchase power and fuel when it drops to 29.5 that is because we're only gonna be buying power off other than produce it that's why it's just so drastic like that does that show in another line how much it is to produce it on that same and that back that's all inclusive in that line that's all inclusive in that and I guess the other thing that drives down the cost there is is our settlement statement from ERCOT that if we 're generating other services or other services for them it's a credit from them and that credit's reflected in their cost and that's part of what drives it down also it's not just that the power buying is cheaper but also the other support services we need to be in the energy business we're now self supplying with those units and it just makes a lot cheaper so go ahead go ahead Sarah right well I really appreciate this slide because I'm looking at the bottom line the totals so the interesting thing for me is that we have an increase we're saving money on purchase power but we have increases in other areas that results in a total increase over time is there a projection for that to go down at some point because in my reading of the Bravo report my reading of how what the plan the long-term plan is is that our total cost should be going down isn't that the idea it is I think if I could turn that a little bit that the cost would go down and be below what it would have been so if not for this plan cost would have been higher so it's not that cost will ultimately go down from where they are now but cost will be lower than they would have been under business as usual because of the anticipated increase of purchase power correct okay I mean it's not demonstrated by the total line though because there was a the purchase power agreements that we have is actually less costly than just the way I'm reading it it could be reading it wrong but I don't think so it appears that staying on the market as we have for the past six years or so that cost is less to us than being a provider of wholesale energy it and for the past few years when natural gas prices have been a record low I would agree with you but the prediction over the next 20 years is that natural gas market it's going to go up okay now I'm tracking you now that was where the bridal group and I parted ways on the 20-year gas projection okay I'm with you okay so got it we disagree on that one okay anybody else on this slide okay move along so this is just a picture of that change here's a pie chart and everybody knows how I like pie so pie charts are my favorite so this is a pie chart of fuel and purchase power being the majority of my expenses and this non-operating expenditure that's mainly debt that's like 99% debt and so that portion is debt and then these other pieces of slices the power O&M and personal services well if we go forward to 2021 when we had a renewable didn't plan in force we have the wholesale contracts they're providing us all the wind and solar we can take at cheapest price we can get and we're buying energy off the market when it's cheap when it's not available economically we generate for our own units by doing that we we certainly increase our debt and paying for the capital cost of the plant but we greatly we more than offset the fuel and purchase power increase in personnel and increases on them expenses so that's the picture we have going forward yes back on the chart so right now we estimate is it about 10% of our annual revenues go towards paying the debt going towards paying down debt well according to this it's 17% okay so that doesn't stay consistent it gets so bigger so the percentage of our revenues will go towards debt right so it kind of comes back to the argument of do you want to own the house or do you want to rent the house do you want to pay other people for purchase power and pay them for operating their units or do you want to own the unit yourself and operate it and what we saw in order to a different plan was is more beneficial for the citizens for us to own units and operate them and by doing that we had control of what units we had their efficiency and their emissions that 's what gives us lower emissions by being in control of that okay so we go forward to our rate stabilization fund and in recent years we've used that fund as we plan to all along we put that money back to help us we saw this mountain of debt that we had to pay off at TMPA and to use it to to use up some of those funds to help pay that down and not have to get all through rate increases and so we've done that after 2019 we've got the TMPA debt paid off we have the renewable debt plan in effect and we 'll start generating additional funds and by generating those additional funds it gives us options and we would evidently we choked up Councilmember Rubin about it we would give options to the council and be back to the council as far as what we've modeled is that we would use those additional funds to start cash funding some of our construction reason I felt that was appropriate was it's because in my opinion we've underfunded cash but I've been borrowing too much of what we needed for construction in the past few years this helps kind of offset that get our equity to debt balance back in a more manageable maintain our credit rating by doing that but we have options what we could do here use it to cash fund construction pay down debt reduce rates are probably more likely a little bit of all three but we have options that we'd be back in front of council to recommend best practice what you want to do do you have like a factor let's say if you were to take a million dollars and use that to reduce rates in other words do or whatever denomination you might have for every X you expect a certain percentage of decrease in either residential I mean maybe just an overall we can we can do that come up with okay this ratio for every million dollars we could reduce cost you know here's how much it would cost to reduce to reduce rates here's how much it would take to give a 1% reduction yeah something something along those lines yeah that'd be great okay we have a policy all the utilities water wastewater electric solid waste we all have a policy of what's appropriate in our business as far as reserves and these are the reserve percentages at the utility board meeting when we discussed these reserves there was by the vice chairperson there was there was a concern over is that enough and and I think this is appropriate at this time I think you have to look at it on a year by year basis of what you anticipate the market doing certainly if you were entering a time where you thought wholesale electric prices were going to be volatile you might want a little bit more reserve I think at this time if we're hosting electric prices are this is an appropriate reserve policy at the bottom it says it does not include tmpa debt payments is there a reason so the tmpa debt payments come to us in the form of a purchase power expense I mean it's dead on tmpa's books but it comes to us as a taker pay purchase power agreement and so it's not booked on city books as its debt it's not booked as a debt payment and so we just want to add that clarification that doesn't include the debt that we're paying off it at tmpa if you could go back to the last slide I'm sorry when I say 2019 because say 2018 and we're gonna look at the additional fund balance 2018 is when the tmpa debt that you just referred as that we bring in as purchase power expense that's when we pay that off and I know you've calculated this a thousand times and I'm getting up there in years so I don't remember it but we do have some tmpa debt on on our books that we refinance for the scrubber and those kind of things so at 2019 after we paid off the quote-unquote tmpa debt any ballpark figure of what we will have at that well I mean I mean the debts in different places the t mpa debt there and even the tmpa debt is two different pieces there 's a generation tmpa debt and there's a transmission portion that that is on there for another 20 years right we're not talking that's related to transmission business and then the same thing as you pointed out there is some it was part of what was a disagreement between the member cities was how to finance the scrubber and some additional improvements that were needed to plant and each city took that portion of debt and financed it differently we took and financed it out to 2024 2025 there were some that financed it out to 2030 or 20 I believe out to 2030 and so we took a more conservative view and and try to finance it over a short period of time and pay it off quicker but we'll break that down yeah but I would say when you're bringing back the options I mean if you want to put that in informal staff that's fine but as obviously as we bring back the options in out years on what if anything to do with those additional fund balances if they materialize that's going to be important part of that equation right yeah I mean that's I guess that's why staff looked at do we want to use this it depends on what the interest rates are at the time in the future if interest rates are high we may not want to borrow any money at that time and we may want cash fund more of our construction if interest rates you know are lower and you know the interest rate that we pay in the past or higher we won't pay that off and so that's why you know we have this optionality of what we can do in the future okay great okay any questions from financial review beat that to death okay capital improvement plan and I've got one man I was getting ripped up oh no I'll wait till after the end of three okay all right I was all pumped up for this this is my best analogy so you after this you'll see don't quit your day job but imagine a highway system that you were building and you were building it so that no matter rush hour UNT graduation whatever was going on you could get on the highway and drive the speed limit no matter what the load is no matter what the demand is you can always get on the highway and drive the speed limit well that's what you ask for your utilities is no matter what the demand is hottest day in August it's been a hot you know hot week of 110 degrees 80 degree nights those air conditions are running full tilt all the time for electricity water wastewater all those utilities the expectation is to always work no matter what the demand is and so that's what we have to design our infrastructure for us to meet that peak demand and so this is a graph of our peak demand since 1960 and it's pretty steady growth and didn't just continual growth and what you see is what I call sawtooth of going up and down most that up and down is either weather related the you know the last peak we had was 2011 and what was that that was the Texas hottest summer ever record heatwave summer and so that sets a peak and that's what usually happens is you go back in time and you you have these peaks of hot summers followed by cool or normal summers and you rock along all of a sudden you have to do it we have to build for that peak we have to build for what could happen and so this past summer if you remember last August 2016 we had the same peak as we did in 2011 record hot summer last year if you remember the first two weeks of August it rain region I remember that as we were trying to do a drainage project and we planned to specifically do in August because we thought oh they're never raining Texas in August and it rained two weeks in a row and so we had a really mild summer and we still hit the same peak as we did five years earlier during the heat wave summer so that difference is growth and during that same period of time we saw an increase having those two peaks at that same time give us a great opportunity to measure our system because we were the same peak and we can measure and see how much was the flow across our system and 2011 that flow was a hundred megawatts in 2016 last year is 200 megawatts and so it gave us a chance to measure what's the impact of other people other loads on our system so that brings us to substations and in subst ation loading ideally what you would like this is the percentage of capacity of that substation and the capacity of the substation determined by its optimal conditions optimal both fan banks working wind blowing just right that transformers working at best conditions ever and with that the one that gives us the biggest concerns and didn't north interchange that 76% ideally you would like no substation you'd like all the substation to be about 50% the reason is is because you want that reliability you want that redundancy so that if there's a equipment failure and one of these 1962 vintage pieces of equipment that there's another substation next door that can pick up load and you never miss blink here and so the didn't interchange gives us some concern that's why in the near future we hope to bring you a another subst ation that's located in what will be the hills of Denton development hills of didn't development probably won't happen for years but I'd like to have a substation there like yesterday the reason is because I'd like to have a another substation there to share the load from didn't north interchange and and to have a backup there and that's what we want to try to do that's what we try to do around our system so what is the is it the plan peak voltage of each substation is there a way to know that or so the previous page was the peak for our system right and so this is a percentage of capacity of each substation we can look and see what the load was on each one and look back and see if I can come up with that but I mean what we look at is this is how we plan do we know the stuff the substation the area this is what we look at to do that to determine that okay do you know if the North Lakes if the North Lakes one is above 69 kv so it is it has been in the past both 138,000 vote it has a brasses line coming into it a TMPA line coming into it and DME transmission line so it is a inner that's why it's called interchange instead just a substation it is an interchange of multiple transmission lines coming together both at 138,000 vote and 69,000 votes we are trans part of our change is to change it to be a hall all hundred thirty eight thousand vote substation okay yes that's member Gary so the idea is to change Denton North interchange into 138 and to build another substation north of there correct and so what we're building for and you remember the mantra we have in front of every one of our capital projects aging infrastructure growth and that's what this is doing the inner loop of Denton in the past has been a 69 kv line voltage line and we're transforming all that to be 138 in the future the outer loop has been mainly a TMPA investment although we've taken over portions of that and the plan is to transform all of our transmission system to be 138 doing and that's two and one is that replacing that inner loop is replacing a 1962 vintage transmission infrastructure the other parts of bill for growth so in 195 2 vintage so I know all about aging infrastructure so when you see what I think I've heard you say is that you when we're looking around at all those different substations you're starting to get concerned with any of those substations where there's over 50% in that highlighted area is that correct well the highlights are just highlighted of loading on all those but yes any of them there over 50% we'd be concerned about because and explain again why you're concerned when it gets over 50% so I'm gonna go ahead and go on to the next slide but I'll go back to the answer your question our concern started with two events that happened in 2011 two things happen one for the first time we ran a as a federal energy regulatory Commission required us to run was called a 715 report what I would call more commonly known as a low flow study the low flow study looks at the flow of these transmission lines all around our system and then systematically back computer modeling starts saying well what happens if this line falls down what happens if this piece of equipment goes out can you pick up the loading in all these areas and the thinking is is no single piece of equipment should cause lights out in your situate in your area and so by doing that low flow study first started at 2011 and and as you can see from this our capital budget at that time was much less but after we did that study in 2011 it really cost us to say we got to pick up the game here we've got a real way behind and the other event that happened was August 6 2011 and that was after the you know one of the hottest weeks we'd had we thought okay we've made it through and Saturday morning at 715 and I get a call I think from Brent and saying Phil I think we think we've lost Hickory one one of the transformers at H ickory substation which is the central part of town serves UNT loading that area we don't know but you know we've got people everybody called out we're all checking it out as we're looking to try to see and inspect this transformer to make sure see if we've really have lost it see if this you know 62 vintage transformer has died on us we have distribution people looking to see what can we do to switch load around to other people so that when it gets hot this afternoon and everybody's air conditioner is hitting full till at 3 or 4 o'clock this afternoon we can serve all that load and what we figured out was we couldn't and that our answer was going to have to be rotating outages which means you take the affected area and you start rotating you take people off for 15 minutes and then you take somebody else off and you bring those people back up and you do that to save the system because you don't have enough that's you know in traffic a shortage of lanes is congestion in electric market a shortage of electricity is rotating outages and that's where we were and so those two events happening where the wake-up calls said we've got picked this up we got to start building more now so then if you go back to that last slide with the station so when you see the Denton North exchange at 76% my guess is what what that that's a that's sort of a red flag that that you're going to have to do something close by to to provide some relief for that in case we have another one of those events where some if some transformer in that station went out it could it could lead to just the kind of rolling outages that you're talking about right and so that's why you need to go ahead and do that other the hills of Denton substation sooner rather than later yes so and that's what we look at every year to see what segment moves up and so as we do that study every year then we have this rotating capital budget these were the budget these were the capital math proposed each year this one includes the Denton Energy Center so you know for comparison we have another one here that shows without the Denton Energy Center just T&D construction and capital building and you see it growing each year and that growth is because of Denton's growth and what we need to serve the Denton system but also for growth around us as far as the demands of the transmission system we can understand both of those because one of them is we can understand we want our lights and our air conditioning running and we also know that in order to keep that happening it cost money so when the feds got involved and asked for a study on load evaluation I believe that was tied to the massive power outage that hit the Northeastern United States is that correct that is correct in 2003 there was an event that occurred in I believe in Ohio and the utility there was kind of three stages of things that happened they didn't keep up their tree trimming a tree got into the line transmission line the relay wasn't properly maintained it should have separated that line from the system and then thirdly the operator that should have seen the issue and taking different actions and separated from the system didn't take those actions so there's a lack of operator training and so those three events happening caused a cascading event that caused an outage the largest blackout ever of 50 million customers from Cleveland into Canada Pennsylvania and New York and so after that Congress passed the Energy Policy Act of 2005 that gave the Nuclear Regulatory Commission finding rights of up to a million dollars a day and that got everybody's attention of we're going you know you're not going to sacrifice reliability just to cut cost you're going to maintain a reliable electric system so the feds got involved to have more of an evaluation you know section by section by section across the country to make sure that load was acceptable and that load was consistent because of that 2003 catastrophe that cut out 50 million people correct thank you so can we go back to the map this one yes that's kind of the map that created I think this whole topic for conversation okay so first I have a question you mentioned that we those TNPA lines are ours now right so not all of them okay so so it's kind of a segment by segment basis as we in you observed there are some items coming up on the TNPA board agenda this Thursday and so as each segment of the TNPA lines come up they have increased capacity already on some these lines and put in new wire new conductor from Denton West all the way to didn't to Denton North and they find my pointer there we are so from Denton West all the way around to Denton North they have reconduct ed and from Denton West I believe all the way to the pockers they've reconduct ed and so as they redo those now as we do other portions of lines other projects TNPA has more we have a discussion with TNPA about do you want Denton to take over this portion of line or does TNPA will maintain it we have a transmission operator agreement that we will construct operate maintain all TNPA's infrastructure around Denton and so we we we are going to construct operate maintain whether it's TNPA's facility is the owner or whether we are it's just a matter of when we do those construction projects is TNPA gonna be the ultimate owner in some cases we are okay so have we we've have we taken over maintenance then of those assets within the Denton County yes is that what you're saying yes okay so if they get TCOs from air cod on that how do we get our share for maintenance of this line so if we if we if we any cost we occur for constructing operator maintaining TNPA lines we build TNPA TNPA includes that cost in their transmission operation they get transmission revenue to offset those costs and shared among the cities based on our ownership based on our percentage Denton's percentage is 21.3 okay so we get a percentage of any T cost revenue they get okay and just another question on on this map because the the original map had Jim Crystal substation labeled as Denton Energy Center substation and now it's called Jim Crystal substation so I 'm wondering what the difference is so to put in a generation facility you have a switch yard the voltage that comes out of the generating unit is not at transmission voltage and so you have it go through what's called a step up transformer that steps it up to a transmission voltage that transformer from that transformer back towards the plant all those electric facilities are part of the generation project from the high side of the transformer out would be a transmission project and so Jim Crystal substation even without Denton Energy Center would have been on schedule to upgrade at some portion at some time in the future by having the Denton Energy Center there that's moved that project up and where we're doing it now and that we're expanding that substation to be bigger because of the generation sources there. Okay okay thanks. Councilmember Gary. Another follow-up on the Jim Crystal substation. What I'm gathering is that we don't want substations to have over 50% capacity use and is this averaged or over is it at peak? So this is at peak I can tell you this was a peak last year 2016 peak the 20% there is purposely low because we were had a construction project going on on the transmission line I'm looking Brent to confirm that yes we had a construction project going on and so we purposely unloaded that's that substation because of a construction project and we shifted that load over to Artie Wells. Artie Wells now will be you'll notice a lot of these low ones have a lot of open space around them and that's the purpose these are substations are going to be there serving for next 50 years and so we tried to build them so that they can serve whatever industrial load comes in and so I went to the open house for WENCO Sunday before last and you know their load is not included in this peak yet but because of the substation being there it's I mean they have like 400,000 square feet of refrigerated space it's going to be a tremendous electrical load. So my question about Jim Crystal then or the new Jim Crystal is you're gonna have two substations right next to one another the reason for the second substation if I'm hearing you correctly isn't just because of having a peak of 20% it's because you anticipate significantly more so when is that decision made in terms of okay well we're gonna veer from our 50% peak criteria and we're gonna build a new substation when we're at 30% for peak or 20% peak? So anytime we see an opportunity to and I've got a slide in here matter of fact I have a slide on substation design the space if I could wait and get to that to answer that question. Okay that's fine. That'd be good. Okay thank you. Okay this is like I said rolling five years of our capital spending and you know many times I think there's been some confusion that oh you know DME keeps exceeding their budget or you know what we ask each year is for council to approve the expenses for the next year. The other four years are a forecast. The expenses and you can see the actual spent per year here. So a lot of times we're asking you to approve an amount in this year's budget it's not so much we intend to spend it that year it's that we can't legally issue a purchase order for some piece of equipment that has an 18 month lead time on it we can't issue the purchase order to purchase it without council having approved it in a budget and so we have it in that year's budget knowing that this is really gonna be an item that we're not gonna see until the next year's budget cycle. On that slide so what you're saying is at 2016-17 you expect that we're going to need a total amount in capital improvements of 647.7 million dollars. Let me do the one that this is without Denton Energy Center so it gives you a better comparison just look at T&D projects if that's what you want to look at. And that's with the Denton Energy Center. That's without. This exclud es yes. And the other one go back to the one with. Okay. Okay well there's a discussion going around on social media that that that the Denton Energy Center is costing us alone really a billion dollars with the cost of the Energy Center itself and the associated transmission lines and substations. Have you done any kind of and you've heard that number so have you done any reverse engineering to determine how anybody could come up with a billion dollar? I don't know I try not to watch too much social media. Well I try not to either but certainly the transmission distribution infrastructure build out is because of looking at the FERC 715 studies and looking at substation loading. Okay. And it's driven by that. It was not driven by Denton Energy Center. Denton Energy Center drove expanding the Jim Crystal substation up bringing it up and forward expanding it by seven million dollars. There's a line that goes from Denton North to ARCO that for the last I say three years in the FERC 715 study it's been on the verge of overloading and this by having the generation at the Denton Energy Center it was a tipping point and drove it over there. What's difficult to predict is though is if you didn't have the Denton Energy Center that generation that's going to cross those lines that is needed where would it have come from? Right. And if it would have come from anywhere south and west it could have possibly driven that line over the tipping point also. Okay. Thanks. Councilmember Briggs. Well my response is just to Councilmember Gregory on page 25 I think the grand total is 1.1 billion dollars for transmission Denton Energy Center and distribution so I think that's where the 1 billion numbers coming from. It's the total for everything and it's yeah. There is a slide on that so as we get to that slide we'll address that. Okay. Did you get your xy-axis? Okay. Alright. Okay so this is 2012 CIP map the number of projects that were forecasted the major projects that were included how many new subst ations and what was added this is based on what the 715 study and substation loading told us at that time. Question. Councilmember Briggs. No sorry. Okay so this is 2017 again the result of substation loading and the 715 study done at that time and each year as we do that study yeah we'll develop projects. The projects related Denton Energy Center, Jim Crystal sub, Denton North to Arco transmission line, Ravine to the council Denton North to Arco transmission line is a TMPA line and it's one that's set for the TMPA board to discuss this Thursday. But those projects associated with that all they they were slated to happen anyway they're just expedited now. Right as I was mentioning visiting the Winko distribution center if you look at the mobility plan for the city of Denton that's that mobility plan wasn't altered by the addition even though there's gonna be a lot of truck traffic coming in now the Winko distribution center what was done was the Western Boulevard expansion was moved up to serve that one. I would equate that to what we have here. Can you show me where the Denton Energy Center substation is? So new Jim Crystal substation will be there so it's associated with the bigger portion of the Denton Energy Center. Denton Energy Center is the step-up transformer back towards the Denton Energy Center. The demarcation for being a transmission project would be Jim Crystal sub. So we put that together what's needed to serve Denton Energy Center and what's needed to replace the Jim Crystal substation that's already existing. I've just got confused by the two different names so I'm just trying to understand. It's the same thing. Yes. Okay thank you. So I've been using a lot of acronyms already and probably had to slide up there already to define all these and I won't read each one of these I'm gonna kind of group them together. Federal Energy Regul atory Commission has been around almost since the beginning of electricity. The North American Electric Reliability Corporation used to be the North American Electric Reliability Council. As a council it used to be an industry group. There's an industry leaders met to talk about how to and would be would consult with FERC about how to meet future energy needs. Every time there was a major blackout. New York blackout in '66 you know every major blackout FERC would go Congress would get calls FERC would get calls they would go to NERC to the to the council and say hey guys what are you doing to prevent this this can't happen anymore and every time NERC would come back say we fixed it it won't happen again and usually ten years later you have a blackout somewhere it would happen again. Last time it happened in 2003 Congress said enough you're going it's going to be a North American Electric Reliability Corporation. It'll be an independent entity independent from the industry it would report to FERC and would have be the enforcement arm for FERC. They're responsible for for enforcement of it they use local entities in each region and our region is called Texas Reliability Entity and they use that to to do the audits everybody has either spot audits or at least an audit every three years we just completed our audit last year and we're successful and had no major findings. The other local is Public Utility Commission of Texas and Electrical Reliability Council of Texas. Public Utility Commission has the authority to approve our transmission rates there and we go to for that purpose. ERCOT ERCOT is the grid operator so they're operating 550 generating units or under their control and they decide who runs who doesn't and who 's needed and they're managing as I said 75 so many thousands miles of transmission line that throughout the system to continuously balance electricity to load. Substation spacing. 715 study tells me about transmission line loading. Substation spacing is done mainly based on a couple of factors or these several factors. One being the loading but also where we anticipate load to be. So going back to the interstate highway example where do you put an exit ramp? If you're traveling across West Texas there are miles apart because the traffic 's not very heavy. If you're going down to LBJ there's three exit ramps within a mile because that's what's needed to handle all the traffic. Same thing for substations. Why do we have more substations closer closer together than what you would see in a rural area just because the electric load is more dense and it's closer together. So that's what determines our substations baiting. Councilmember Begarra does that answer your question that you had? Okay. Okay. Yes Councilmember Walsh. Go back to the last slide. So the 715 study comes back to what I was talking about that the federal government got involved and said we want to see a study to confirm load and reliability and the fines can be up to a million dollars a day and I believe Florida Power and Light , was that correct? Correct. That they actually failed there and got fined a substantial number. So the fines are real, the fines are very much a threat from the federal government to maintain the load and reliability. Yeah Florida Power and Light's fine was total of 25 million dollars. I mean essentially they're gonna fine depending on what size energy you are to get your attention . Florida Power and Light's a large utility so that's what took to get their attention. I 'm sure it did. So our capital improvement plan by budget as we talked about some of this is for new, some of it is for replacement, so growth and aging infrastructure on the distribution side, on the transmission side, the Denton Energy Center is discussed here and each of the totals amount and as you said this gets us up to if you look at a 10 year total but I wouldn't describe that as a total of the Denton Energy Center. If we didn't have the Denton Energy Center we would still be building practically all this distribution and transmission. So I think that that last point is helpful and I don't completely understand what the controversy is out there on social media so maybe somebody can help me understand what the what the arguments are but as I understand it what you just said right there is everything outside of the 227 million not only would still be happening but has been happening since 2011. Correct. Well before any of us were thinking about the Denton Energy Center, the renewable dent plan, correct? Correct. And so help me just from my own historical perspective because I I recall coming into council my first first meeting was the controversy over a transmission line siting that was in Dalton's council district which then became my council district I think the next year after we did redistricting in the city and ended up I think that ended up but but there was a project in place but I recall about a year later we got together as a city with you proposing to us saying here's a comprehensive plan moving forward so what was happening prior to that and what was the change in 2012 I guess and what price tags were we throwing around at that point? So previous to 2007 we were probably the city was growing at a rate that we could build one substation every three years and keep up with growth we weren't at that time really building to replace the infrastructure we're really just building just for growth I would say after 2007 we started picking up the pace and we started building and we ramped ourselves up to build one substation a year and we started recognizing that we got replaced this somehow we got replaced this inner loop and that's what in the 715 study happened in 2011 the heat wave summer happened in 2011 and all that came together says we've got to get up we got we're behind and we got to catch up and replace the infrastructure and build for growth in the future we're gonna be you know somebody else can build this transmission system for us and so those are the significant events that happened that caused us to have that meeting with council I think it was joining with council and PB and and there was concerned about you know us having to not only ramp up resources in DME to do it but ramp up resources in other parts of the city who are going to have a significant impact on legal real estate right away purchases purchasing that we were going to have a ripple effect on other departments in the city as we go went through this you remember the price tags we were throwing around at that time and how that's laid out I guess the numbers that we have here let me go back here so I mean the numbers we had in 2011 that we had already done before the heat wave summer was you know 172 million well after that we greatly increased it up to 302 million right so those are the big increases and I remember that because I remember even as we were kind of talking about the Denton energy center renewable Denton plant and there was a price tag on it and out there I think paper was reporting on this I think you even kind of suggested other people in the city were saying this is the largest single capital investment the city's ever done but I kept thinking back to the price tag is when we were looking at the comprehensive transmission line substation improvement that was well above that in terms of what we council had given approval let's move forward in this which was actually a much larger price tag I just say that by way of history of thinking through well and it's been noted before that never before in the history of city we've been able to turn out 50 million dollars worth of capital projects and so we had to really ramp up our resources to be able to do that let's see councilmember Gregory and then councilmember Briggs so slide 22 back to slide 22 let's not go backwards yes no it's not oh good Lord the numbering on my page is way different the one that says capital improvement plan budget by physical year in millions there you go so distribution and transmission are different distribution or the smaller lines through neighborhoods that are either on poles or underground correct and part of that distribution replacement help me out we're going through Joey's neighborhood South Ridge right now because they're all underground and that neighborhood was built in the 60s also and we're going through there in replacing all of those underground lines and those transformer box I guess those boxes are that's correct is that with his neighborhood is that part of the distribution replacement cost that's in there exactly we many years ago council gave direction that all new subdivisions will be on the ground we much of the industry used to cut cost much of the industry used what they call direct bury cable that direct bury cable did not have a long life I mean it did it didn't it we've stretched its life to 25 years and it probably should have been replaced at 20 and so we 've monitored these neighborhoods and as we see that distribution cable starting to fail on a more frequent basis then we move it up the urgency of we have to replace it but we know we have to replace all those direct buried communities and I would you know that was the largest community in one block one chunk to do but we've done three or four since then so so distribution replacement alone over a ten-year period is equal to the cost of the Denton Energy Center correct okay that you know to put things in perspective okay so I have a few questions so on this capital improvement plan in a five-year planning process we were looking at here starting at 2011 how come the Denton Energy Center showed up so late and all of a sudden like when your industry standard is five years and when I got on council I just remember it was immediately talked about and I don't know if it had been talked about before or not but it just kind of popped in we we looked at as we 've discussed we've looked at multiple options of what we could do for generation for renewable energy contracts and you know we without certainty of what those options are we didn't we felt that we would come back and put it in the budget when we had certainty about what we were going to propose and what the cost would be but you know in previous years pre at least previous two three I don't know how far back but we had started looking at different options of what we could do we have been invited by one power plant builder to go look at being co-owner and their power plants we'd had so much fun being a co- owner and other plants we decided not to pursue that option but we did look at multiple different types of combined cycle units and other of other options of what we could look at we didn't put it in the budget until we had certainly about here's what we're going to do and here's the total plan. Okay another question I saw in one of the backups I can't remember that we have around I think it said 50,000 customers and so my question is that the 50, 000 is that just within the non-competitive area of Denton or does that encompass all of the DME? There's a total number of customers. Okay and so that is the rate payers or we're talking about you know the 1.1 billion in debt and that's 50,000 customers are the one that we're going to have to? The exception of that would be for the transmission system. Okay. Which we bill through we file with transmission cost of service that will of course be cost shared with other utilities across the state but likewise you know we share them paying other utilities for the use of their transmission system. So taking out other revenues that's the ones that's going to make that up. All right thanks. Okay. Councilmember Gary. It's interesting to hear for instance Mayor Pro Tem you're talking about being able to draw upon the previous discussions that were had about transmission lines. You knew that there were these capital expenditures coming of 300 million or so. That's great that you were able to draw upon five and a half years of institutional knowledge up here. I don't think that that's what the public understands. I don't think that they're at the same level of information as you are at because the way that our projects are presented to us are as individual projects. You know if we have a Hickory Street substation for instance we get the numbers for Hickory Street substation. We have options and we analyze it based on that particular item but we don't see it in a larger context. Usually there's one slide that says this is part of your C IP program right but we don't see it in a larger context of this is what DMEOs for everything for instance. Same with the DEC. We did a lot of in-depth study on DEC but it was never presented to us in the context of this is our transmission line replacement. These are how much new transmission lines are going to cost us. How much distribution is going to cost us. This is the whole picture. So I think the disconnect is up here we get a lot of detailed information and sometimes we're able to place things in context based on having been here for a long time and we understand it. But it's not presented that way to the public and sometimes it's not presented that way to us and this isn't it's not an attack. It really isn't. It's just trying to articulate the frustration that I felt and I think some other people feel as well which is where does this fit in to the entire picture. People might make different decisions about if they want to support a project or not if they know how that piece fits into everything and it may be that you'd have more support I don't know but for me I don't even feel like we have I hesitate to say that this council even had enough information to proceed without being able to place it in context. That's how I think about things is in the biggest possible terms and then funneling. So that's my statement and it was brought on by Mayor Pro Tem bringing up his own institutional knowledge which I just don't think is there and I would like for us to really think about that in terms of how we present information to the public in the future. I think it would be helpful. Well I appreciate some folks might not have been paying attention back in 2012 but they presented a comprehensive plan to us of what we were doing when we embarked on the large substation and transmission line project. It was in the front page of the newspaper several times. You can search it. Price tags and everything. I understand what you're saying. We had several large work sessions on a comprehensive view of it so I understand in 2017 some people don't recall that or weren't paying attention back then but that doesn't mean it wasn't presented in a comprehensive fashion. I didn't say that it wasn't presented. I actually said it was presented and everybody learned it but to be able I think Joey said one time going back through all of the different agenda items and trying to piece things together is crazy. Those were your words when you were talking about it. You thought I called you crazy. No you said it was crazy. Then I said you're crazy if I remember correctly. Well let me say this. It's hard to piece it all together. That's what I'm saying. But I think and I think and I understand what you're saying and I think that New City Management I think DME is being responsive to that by presenting this particular presentation which we're going on almost two hours to try to say what's happened in the past okay that's done. How can we maybe reset and audit finance? I said could you identify of these GOs and COs that are coming before the council tonight which one of these plans have been in that 2012 comprehensive plan. So that's part of that trying to piece together continue to show that that picture. So I appreciate what you're saying. I think what we're doing today is a part of trying to change direction on that. I agree with you 100 percent. I was just responding to the you know the comment about not paying attention. I think people pay attention it's just putting it all together. All of it together. Council Member Riggs. So on that note did we perform a study of the cost of the new power lines in way back when? Was there a study done? So we have a 715 study that generates the need for those projects in any transmission study transmission project we would follow a public utility commission and they would have to find it necessary for us to be able to file it getting rates. So that was that was done that was the next thing. I'm sorry I spent the morning reading electricity transmission by the National Council on an electricity policy. So I was trying to educate myself before the conversation and there's just there's just so much and that was another question if we had to get permission or certification of need and you just kind of answered that for me. No well there is a difference in the ERCOT market in that other and this was in the last legislative session it was a point of controversy that this way on utilities don't have to get permission from the public utility commission in order to build it. We have our own governing body and our own governing body determines whether we go forward with a project or not. They determine where it's in rates but the legislature didn 't like it that a city could decide to build a transmission line from point A to B and maybe they're building it to their new wind power or solar power plant that's located somewhere in west Texas and so a city in like Denton could decide to build a 200 mile line to west Texas and so they they limited there after last legislative session it says okay cities you can build you can decide what transmission lines build around your city but if you go more than 10 miles outside of town then you have to come like everybody else does to the public commission of Texas and get a certificate for convenience necessity which is CCN which is what how they give permission to other entities to build transmission lines to decide yes this is a needed transmission project and yes will allow you to build it. Sorry I was coming on with the answer. To your point I just want to say thank you for an open meeting and an open discussion on all of this because I think that's where a lot of the disconnect has has come forward that to have discussions so thank you Mr. Heilman new city manager thank you that this is an open meeting and it is an open and detailed presentation so thank you Phil for because information is just so crucial to our public to everyone whether they pay attention or they don't pay attention it's just important to have an open meeting and an open discussion on all of this so I just want to thank staff and city management for really stepping up and stepping forward and having a detailed discussion because I think it's just really important it's very helpful thank you. Well this is a very broad discussion I mean this is covering a lot of a lot of different parts of our business and we're only a quarter way through. No I'm kidding. I'm kidding. No I'm teasing. There's not any other questions. Well and I just want to the preview is this is the budget capital improvement plan budget all the way up through 2021 that doesn't mean that it's all going to be spent it means you may have other things that come in that are added but this is this is the budget and then we're going to look at what is actually the debt what are the offsets allowed to that debt through debt service which I think hopefully will help maybe give some more information. And I think that the other part of that is that when we maybe a year ago we got an update on where we are in terms of what we budgeted and what we have spent and my recollection is we're actually pretty much on schedule and under budget. Correct. On schedule and under budget two of the most pleasant terms that I get to hear when I sit at this table. In total yes. So let's talk about something not so controversial. The status of Ditton Energy Center to date council has approved execution of contractual obligations exceeding 200 million dollars. Engineering design, site prep, engine fabrication are well underway. 42 million have been paid out on the project to date and the engines are expected to ship in June. And so it's things are moving along. If you drove by the site you we were afraid a few weeks ago there were so many peers being drilled. We were afraid somebody was going to go by and think we were having to crash a gas drilling site because there was an extensive number of peers being drilled. These engines are very heavy and vibrations of peers go deep. But you'll see actually see structures start to come out of the ground now and beginning to go move along. This is a detailed listing of the contracts that have been executed and once they're becoming forward in the future you have on your agenda tonight the SCADA systems. SCADA stands for Supervisory Control and Data Acquisition and Melissa Craft will be presenting that to you tonight in individual and it's an individual consideration topic and then we'll proceed on with the other contracts will be coming as we move along. So as stated to the newspaper in a previous interview we're on track to produce the savings and produce a project that we discussed when we announced the plan. I read in the newspaper that there were no details available for how we're spending that money and this would be more details than what had been previously available. And if more details were needed like could we go in and get more details on what the costs are involved in the wastewater line or the water line for fire protection? So that would be available? Yes. Okay. There are a few items that aren't some of the details aren 't available because of the contractual requirements. We took them our motivation was to provide the best deal we could for the citizens of Denton. In order to get the best deal forward the vendors that bid the engines and the design build contracts required confidentiality. They did not want to reveal the specifics about the operating characteristics of their engines or their design build project. And so to have open contracts with those people we wouldn't have gotten the best deal and we would have not gotten engines or performance as far as emissions. And you're basically then talking about that top line of breaking that out? Correct. Okay. Thank you. And just you've got a footnote down there at the bottom. After June 1 that's what you're saying is we've either spent or obligated to spend is that correct? Correct. After June 1 we have obligated $155 million. So now for the exciting portion. I'm going to turn that over to Mr. Sprater and I'll take a quick break and then I'll be back to close it out. Just for the mayor's information I get called that all the time. So it does happen. The exciting portion. Oh yeah. I'm still thinking of the ticket. In terms of this, this gives an idea of historical outstanding debt and then we're going forward and projecting it. So you can see like for '15-'16 at the end of the fiscal year that we just completed the audit about $327 million of outstanding principal and then you see the debt service below there about $29.1. It's '16-'17 that includes the sale for the energy center that we concluded in January and it has an estimated issuance of the $65 million and this projects out the debt and then it subtracts out what's being paid off of that debt each year. So you can see we're projecting based on their current five -year capital program about $734 million in principal outstanding with $70 million in debt service payments. I will highlight a couple things in the footnotes and one of them is the amount that we get back from ERCOT for being part of the system so that transmission cost of service revenue is projected by 2020-2021 to be about $28 million. So if you look at the $70 million in debt service we'd be paying about a third of that is offset by those revenues we get. Quick question and this could be later on down the line. It'd be interesting to have because we've got that in a footnote but if you're able to sort of call it out and if you were to put a line somewhere with each fiscal year especially the actuals we were bound to have an actual T- cost that we've achieved in previous years and then projecting forward what we because we're saying we project in 2021 we've got $28 million. Well somewhere there's probably been a way to project that throughout those years so it'd just be interesting to see how that how that plays out if we can do that. I think we've got that I think you've got that revenue on one of the earlier slides. Okay well then I'll just merge them in my head. Okay so let me make sure I'm understanding this. So let's take the total principal and interest projected payment in fiscal year 2021 of $70 million. If that's if everything goes the way everybody's planned it . If everything goes the way everybody projects and plans and that means we will also receive $28 million in some type of revenue for T-cost or whatever these things are and that flows into your cash flow sheet. I mean it's but it's being generated because of that level of because of the debt as I think as I think as some maybe Councilmember Gary or someone asked so the transmission we're able to get back some portion of that. So if this was all distribution that $28 million wouldn't be there. Correct. Okay and I should mention in terms of what we get back it's based on the assets we put in but we basically get back what we put in plus a return. So it's not like we get just exactly the debt service back that we're paying we get a return on top of that above what we're what we're paying for that asset. Right and that's none of that $28 million is attributable to the actual Denton Energy Center. It may be attributable to a little bit on the Jim Crystal transmission side maybe but the actual Denton Energy Center there's nothing of that $28 million that is attributable to it. Correct. Okay. We didn't get Phil that long a break so he's going to come back. I just want to make sure we have a clear understanding of the components of the debt service. I think we stated in the slide there were $7 million of increase in Jim Crystal because of the Denton Energy Center. Yeah that would translate to a nominal figure of that $28 million. Correct. Okay. Yes. I don't think I'm following so you're saying that the $28 million of transmission cost of service revenue is completely and wholly unrelated to D EC, the Dent Energy Center? Yes. Well. It's related to our transmission spending. Okay. All right so I'm tracking you now but the electricity that flows through the bars and wires that you put up is from DEC. Well the electricity flows from 550 generators in ERCOT. Sure. That could be one of those generating sites. Okay. My point if we didn't have the DEC it's done. We're going to go back in time. If we didn't have the DEC we would still have this. And we still did the same transmission projects that you described here in this presentation. We still would have approximately not quite as much but the $28 million. Correct. And so that $70 million debt service figure of principal and interest that does include the debt service for the DEC. Yes. Yes. Of about, is it about $20 million a year? If that's about a. No I think it's about. How much? I think about this one I remember. It's about $18.2 per year. Over the last, if you remember it was 20 year debt and we did capitalize interest so about the last 18 years about $18.2 per year. Okay. Principal and interest. Yes. Okay. Yes. So just to be clear the transmission monies that come in, that $28 million, it's like a toll road. If you drive on it you pay. And so other electric ERCOT users are using our wires and our transmission and they're paying a toll basically in order to use our lines and that 's what generates the $28 million. Yes. Thank you. I do have one other question. It was, if somehow we were able to put beside this that projection of debt over 10 years of capital improvement plan budget up through, it had the $ 1 billion figure there under grand total. Remember that? Right. All right. So am I correct in assuming, because that didn't show any debt rolling off, any debt being paid off in that capital budget plan. It didn't show the payoff of anything. It just showed. So, so the question. That one billion was the total of all those years' budgets. Right. Right. So that wasn't exactly the debt that's been issued or the actual amounts that we built. Right. But this also has projections in it as well. Correct. So help me understand why the principal balance, because they both were 10 year projections ending in 2021. Yeah. So you got the question? I think I got your question. Yes. I think there's two things. Okay. You know, one is we pay off principal every year. Right. So we're paying off debt. So you're never going to get to that billion because you're paying off. But two, I think, and this is kind of the budgeting procedures in Denton, which is a little bit different than some of the other places. When you see that budget number for the current year, what 's budgeted there is what are we going to issue in the current year in debt plus what's anything that's unspent from prior years' debt issuance or prior years. So in the first year in Denton, we budget everything that we haven't spent to date or we don't think we're going to spend by 9/30 plus the other. So sometimes in those budgets, those dollars are counted a little bit twice. It's a residual left over. Okay. Because you're counting everything in there plus going forward. So anything you don't spend kind of carries forward so that the historical billion, if you really look at what was spent over those 10 years, it's going to be less than that and what was issued because of the budgeting practice. Just to be conservative, they budget everything that we haven't spent in prior years in the current year plus what we're going to sell, which in reality, we probably can't spend that within a year anyways. So the budget dollars are a little bit higher than reality, so to speak. Because of just the process or the paradigm that we use to represent. Whereas here, this is what we're projecting. This is what we've either actual -- the actual debt on the books or what we project will be the debt on the books at this time not taking into consideration. This is what we think we will actually issue or have issued either general obligation or certificate of obligations for. Or just for electric, correct? That's right. Yes. Just for electric. And if you remember today, we've got the notice of intent tonight. You may remember in the budgeting process on the notice for tonight, I said several of the areas we're going to be selling less than we initially budgeted. We're not selling any for water, less for waste water, less for solid waste. So a lot of times our budget is just that, but what we end up selling may be less. Okay. All right. Great. Okay. Slide two. And then I'm done, I believe. And this is really -- when you look at the outstanding debt , and this is as of -- let me look. It's as of 9/30 plus the debt we've issued, the revenue bonds we've issued. So this is kind of current outstanding debt, which is somewhat the 625 million less what we plan to issue, that 65 million. The principal amount is that. Here's what we're paying off. So in five years, we'll pay off 20% of the principal and 10 , 42, 15 years. So this is kind of the principal payout schedule. So within 15 years of all that outstanding debt that's current, 63% will be paid off. And Chuck, just to clarify that, there was an earlier slide that showed that there was some potential use of reserves that were anticipated. So the council would have the option to alter this percentage and pay it down faster if they choose, if those fund balances are available. We can always use cash balance to pay down debt earlier. And this also assumes there's no refunding or refinancing of debt. A lot of times when it becomes callable, we'll refinance and it may be paid off a little bit quicker. I would not be in a hurry to pay off debt that's at 3%. I would much rather hold those funds in case we have debt that's going up and simply use that for future payments if we're facing bigger debt down the road. And that's absolutely the policy discussion the council at the time will be able to have. But I just wanted to be sure that council kept in mind that 2019 through 2022, there's projected an aggregate of about $53 million in reserves that could be used for rate relief, advancing CIP, paying down the debt. So it is projected that the council's going to have some flexibility in the upcoming couple of years. My point was that you could change this scenario, but you 're also right. If it didn't make sense, we could make use of it for other reasons. And I want to, if we could go back to the slide, the 10- year capital budget slide that had the $1 billion. Because I think this is, for me this was important. As I read that, and we've all been talking about over the last year, six months, year and a half DME debt, and it's primarily focused upon transmission debt. That's really been the substation. Some of them are for distribution. Some of the substations are for distribution. But so let's think about that. Half of, let's take out the Denton Energy Center. That's sort of, but so half of that debt that's left over, almost half of it, is distribution. And that is to fix underground utilities that are failing and causing either blackouts or potentially dangerous situations. It's to make sure that we've upgraded our substations on the distribution side, that we can handle the demand and the load. So I think for me, as I continue to break this out, and let 's face it, when I first saw that number, I think I told the city manager and Brian Langley, it's like, I about, but as I began to understand more of those components and began to try to understand what makes up that number, number one, you've just told me, that's sort of monies that we haven't spent either. So that's what you have to do from a budget presentation. But does that give you a totally accurate picture as your last slide on the actual debt does? So that's been helpful as well. But distribution is, you know, transmission is what helps us get the big voltage from here to there, and people use it, and we get money off of it for teak. And it's the thing that's coming to our houses is when trees get fallen over and we have to replace poles and services and things such as that. So that comprises, and if we went back to the debt, the actual debt projection, the $734 million, I think it was, the last slide, feel any idea on that? Or maybe even if we just took the 2015-16 actual, forget the projected with the deck in there, we'd just go with the $327.5 million. You see the one I'm talking about? Yes. Ballpark. How much of that is distribution? We think how much of that is distribution. Well, we'll go back and look and see, rather than rest your guess. But yeah, I mean, I think where you're going is transmission is a highway system. Distribution is the streets. And so transmission, we're rebuilding the highway system to get all the high voltage electricity to get to the neighborhoods from the subst ations on out. Distribution is your street system. And I mean, we've got the same problem in distribution as we do in transmission. It's old, it needs to be replaced, and it's what we do to maintain reliability. Okay. All right. Yes, Council Member Gaius. Oh yeah, whoever. Yeah, Chuck. Chuck. I'm going up, Chuck. I'm sorry. Sorry. I apologize. Are we paying the entire amount of principal down each year ? I'm sorry, the entire amount of interest down each year? You mean these principal and interest payments? Yes. So 33.9 million represents the entire amount of interest on 734.7 million of debt outstanding? No, it's one year's principal. In other words, this is the one year principal payment and the one year interest payment. Okay, gotcha. For the amortization period. Correct. That was my question. And check my math if I'm wrong on this. If we have 734 or 735 million outstanding debt, not counting the annual interest obligation, and we have 50,000 customers, that comes out to about $15, 000 of debt per customer. Is that correct? I'll go check on my phone. I knew you were talking about just the principal outstanding. Just the principal, not including the interest. In 2021, will we think we'll have 50,000 customers or more? We have 50,000. That's right. Spot right. Okay. Math. But I would be careful with the per customer because I'm a customer and so is Peterbilt. That's right. Those are quite different customers. And I'm not paying off as much of the debt as Peterbilt is because they're using a lot more energy than I am. That brings up another good point, which is Peterbilt pays a different rate than you and I pay as well because of their capacity. So it's not a perfect -- I understand that it's not a perfect analysis. Thinking about, for instance, the Dent Energy Center, it's about a quarter of our total debt if I'm understanding it correctly at 227 million. So if -- using the imperfect per capita number again of about $14,700 per capita, that means that 5,000 of that was for the Denton Energy Center. Did I get that right? It's about a third? About a third of it would be related per customer to the Denton Energy Center. So roughly 5,000, 40-some hundred would be the Denton Energy Center. Okay. This is me funneling. Yeah. And I appreciate that. I guess when I hear numbers like that, I'm curious as to what is the -- I mean, people use per capita data to try to create certain types of observations. So I would be interested in hearing -- not necessarily now, but what significance does that number have? I mean, what drives that and if -- I mean, okay, so we can say that, but yes, Peterbilt pays -- to me, it's how does it flow into the total cash flow? How does the debt service -- how do all these revenues come in and eventually gets down to the rate? So what's the importance of that kind of measurement, I guess, is my question. Well, for me, 734 million is a huge number. Yes, it is. It is. And understanding that in a smaller concept is helpful. But with the caveat that Councilmember Gregory said, which is it's imperfect because we have commercial customers and we have residential customers and we have different rates for different customers. But I think it's a tool that you can use, especially if you 're going to do any comparisons to Bryan or Garland or any of those places, it helps make a very large number more hands-on. Okay. All right. Well, and -- My concern about the imperfection of that tool is when I hear it, it makes me think, oh, my gosh, I'm on the hook for $15,000 of debt and I'm not. So it's a tool that I think is sometimes used to create unnecessary concern from citizens because it makes them think, well, I'm going to have to be paying that off. And that's not the case at all. You know, in our fiscal report, we got a review of ratio of general bonded debt. And we have the line per capita. But we also have the line percentage of actual taxable value. That's another interesting line because you look at our general bond debt for 2016, per capita it's $1,218. Oh, my goodness. I'm on the hook for $1,200. But I'm not, actually. But then you look at how it compares to the actual taxable value and it's 1.7%. Neither one of those alone is a very accurate way of looking at it. You have to look at it in the context. So I think when we talk about this in the big context, we need to look at it not only from that one perspective but from a number of perspectives so that we don't mislead people into thinking that you're on the hook for your per capita part of this because you're not. And there's different ways to obligate citizens for a long- term obligation. Here we're talking about owning our own plant and being in control of our own emissions and efficiency. We could contract with another entity and have a take or pay contract with that other entity. They will have to dent on their books as we did with TMPA. And again, we were obligated because we have a take or pay contract that obligates us for a fixed debt that's not on our books but yet could be as much if not more detrimental. And so that's part of what we have to look at as a comparison. If you compare it to other entities, different people meet their obligations in different ways. Some do it through a take or pay contract. Some do it by owning their own plant. It's just different forms and ways of doing that. Council Member Briggs. So I have several questions. Just one to follow up on that. If the rate payer isn't the one who's paying this down, I mean, who is? Just circle back to your question. Right. And I know there's many variables and revenues, but if our projections don't always work out the way we want, then that rate payer is the one that's going to make up for it. So I just appreciate your time today and all of this. I mean, that is ultimately my concern is the rate payer. That's why I'm here in the seat. So I appreciate all the numbers. So I have a few questions that aren't about debt because I feel like this conversation won't come back around to us again. So I just, is that okay that I ask those or do we have more questions about the debt? Oh, you're talking about just in general in the presentation? In general about the project. You know, the only thing I would say is I think what's confusing, honestly, Phil, is when people, it's counterintuitive when you say you're going to raise debt, but you may save money. It's counterintuitive. I mean, when you look at the projections of how much are we paying for purchase power that it drops, I forgot, 50, 60 million. Our debt goes up. And when I look at that number, it's easy to forget, but it 's counterintuitive to think how can we raise debt? How can we, yes, the rate payers or whoever pays this off, but in the end, the real question is would we have been paying that much anyway, just crafted in a different way, which in some ways could give us less control of our energy needs and of our energy destination, if you will. And that's what makes this also, I mean, for me, if I try to reduce this down to some very simplistic kind of isolated siloed kind of approach, I can get lost and stuck in that. I mean, I see a billion dollars down. But also knowing my own business, there's no way I would have grown in my business had I not been able to have access to capital. Of course, you have to manage it well. You have to forecast well. You have to use good common sense. But I can understand how when people see this, it's-- I think it's counterintuitive from two approaches. One is, watch, you're going to lower rates, but you're going to spend $227 million on a power plant. Yes, because I was going to pay that cost to somebody's plant. And so it's the own versus lease question. I'm better off to own it myself rather than pay somebody else's plant and they get to plant it. The other counterintuitive piece is, watch, you're going to lower gas emissions and you're putting in a plant that burns more gas? Yes, because it supports me buying 70% renewable energy. And because of that, it lowers emissions 74% and lowers gas usage to 38%. So both of those are counterintuitive. I'm not just talking about the debt. Even if we were to take that out of the equation, we still have a pretty large number. Now, OK, so do you have a question about the debt? Because I want to-- OK, and then we'll go to Council Member Briggs. More of an observation, and I think the owner lease metaphor is helpful. It's not perfect. No. But I mean, I could sit down and say, hey, my family has chosen to rent, so we pay $2,000 a month. And we have the virtue of having no debt associated with our name. But if I were to take what that meant in 30 years' context over me putting $2,000 a month into owning a house and what that meant in terms of my financial situation 30 years down the road, there'd be no question as to which would be the better one given certain circumstances. And so that's why these sorts of debt per person versus-- we'd almost have to look at this in context of what would be that total cost per person over the course of 10, 20, whatever number of years it is in terms of what we owe in order to pay for this service to our city and then compare it. And so it's just an observation. And I think as we think about infrastructure, we're about to go to DC, some of us, and hopefully kind of encourage them to invest in infrastructure. And they don't have plans for it. They don't have a path forward, certainly in a way that they can pay. Some of you all went down to Austin. And there's a lot of talk about infrastructure from the point of view of the city-- from the state. They don't have real clear plans, certainly no real clear plans to pay for it. It's encouraging to me that we can sit here and look at an ambitious $1 million project, $1 billion project over the course of this, in which we have a path to paying for it. And our citizens are seeing real value at the end of the day. So when we talk about it in NLC, that cities are the ones that are doing it right, follow our path, we can do it. So more than anything, I'm encouraged by this, by seeing what we've done. Well, I appreciate that. Let me assure you that in coming up with the renewable debt plan, we did look at many, many different alternatives of buying from the market, of contracting for more services. And this came back to being the most economical way forward to achieve the renewable goals of the council at the same time achieving economic goals of being able to lower our rates in the future. OK. Council Member Briggs, the floor is yours. OK. You know, I mentioned that I read the electricity transmission paper. And so I saw a few things that caught my eye that I was pretty interested in. But first, I want to ask, we've mentioned that we would be doing the upgrades of the substations and the transmissions no matter what, if we had a deck or not. Except for expansion of Jim Crystal substation being bigger . OK. So hypothetically, could we do the deck without doing any of the other things? Without doing the transmission line? And substation upgrades? So on the transmission lines, after you do a FERC 715 study and you show there's a need for expanding this line, if we don't build it, ERCOT will direct someone else to build it. So if DME doesn't build it, either BRAS's or Encore or someone else will build that line. We're not going to risk the reliability of the ERCOT grid. If we choose-- we get first rights to it. But if we don't choose to build that, someone else will. So they're dependent upon each other, is what you're saying . The deck and the-- The transmission is dependent. On the deck? Right. No. No. OK. No. So flat out, no. No. OK. I'll answer that one, and that answer is no. All right. So where is the on-ramp to the grid? Where does the power connect from the Dent Energy Center onto the grid? Is that-- Jim Crystal substation. OK. That's that substation. There's a switchyard that would be accompanying that. There would be a step-up transformer from Dent Energy Center that would step it up to transmission voltage into that switchyard that would ultimately be the Jim Crystal substation. OK. All right. So when I was reading about the transmission, I came away with that the transmission is actually one of the three R's, which is reliability. It seemed to fit into that category for me. OK. So I'm going through my notes here. And I wanted to read this just right here and kind of have you explain to me. It says that much of the Texas grid, ERCOT, which is not subject to the jurisdiction of the Federal Energy Regulatory Commission, socializes the cost of new transmission, meaning that utilities initially pay for all the upgrades to the transmission system and pass the cost on to the rate payers. Is that-- does that apply to us here? Yes. OK. I mean, that's what we've said all along is the cost of a transmission system is filed with the Public Utility Commission of Texas. Public Utility Commission of Texas sets our rates that we can charge other utilities to pay us a return on our transmission investment. And likewise, as load, we get billed from other utilities for use of-- for what they build in the transmission system. OK. All right. And is there any point in time when we are going to get a hard number on the reimbursement of those TCOs? Well, in this presentation, I provided what our revenues are. Well, for like our relocation cost, because there's a whole aspect of this that we didn't even cover as far as right of way and land purchases. Right. So all the cost of a transmission line, the easement, the right of way, land acquisition, everything that's in the transmission line except for the distribution cost is captured in our county system. And we filed that with the Public Utility Commission as part of our cost of transmission cost. And so the Public Utility Commission reviews that cost and sets rates for us to receive revenue from other utilities that provides us a return on that investment. OK. Isn't that the $28 million there? Yes. Yes. OK. All right. I just didn't know-- I haven't seen any kind of guarantee. And I know that since I've been on in council, we've been talking about reimbursements and we're going to get stuff back. And so I'm just looking for that hard number of guarantee. So I think what you've read there is that the Utility Commission has that system in place that all utilities, investor owns, co-ops, and mutual utilities operate under as far as how we build our transmission system. And because of that system, I would venture to say that Texas probably has one of the most robust transmission systems as anybody in the United States because they've taken that approach and because they've directed so much transmission investment over the past several years. I just have a real quick question of clarification. You said you haven't seen-- you said the word guarantee, but I think it's what you're saying is you're not sure how that T-cost revenue-- if you go back to the slide, your very first slide that shows revenues, the very first one. Right there. So on T-cost revenue, what you're saying, Phil, is in the actuals, in the actual columns, we did receive from somebody either credit or a check or something in those amounts representing our T-cost revenue. Correct. OK. And so these projections moving out are just based upon our rate, based upon our rate of return, our budgeted plan. This is what we anticipate. And know that there's no guarantee we're going to get that, depending on what we build, and PUC could change. I mean, there's a lot of things that can come into play. Right. And matter of fact, we anticipate a future decrease in the return allowed by the Public Utility Commission and to factor that into our projections going forward. OK. All right. Good. Council Member Begarry. So I have a little bit different way of asking a question that we've been asking, but let's say that we hadn't completed the transmission line upgrades at the time that we did and we were beholden to Brazos or whoever to-- we decided, you know what, let the market take care of it. They can upgrade it. We're not going to spend the money on the upgrades. In that universe, could the Denton Energy Center have been built? Yes. So even without the transmission line upgrades? We would just be hooking into somebody else's transmission system. Somebody else, in our business, there's-- in the way we're organized, there's a power supply side and there's a transmission distribution side. And the reason I'm organized that way is because that's how the industry is organized. And so if we decided we want to have a production unit and not being a transmission business, it means someone else would have been obligated to build transmission for us. They would have been glad to do it because they've been able to file and get a return on it. So same way Garland has a power plant in Denton. And so I talk with them about how long they're going to go with that power plant because there's some transmission infrastructure that I need to replace if they're going to continue to operate that unit. And in case they are, and so we will make that transmission investment to keep-- be able to take power out of that unit. So upgrade or no upgrade, debt could happen, the capacity was there? In our area, transmission infrastructure is mainly built for load. There are 550 generating units throughout Ehrklaut. And so certainly there are places where generating units are built such as all the wind turbines out in West Texas that transmission is being built to transport that generation here. But I would say in-- certainly in our area, the transmission system is being built to bring that power in. You put a generator in that-- in line somewhere, you might have to build an upgrade just like the upgrade we're talking about for Jim Crystal Sub of $7 million to take it in. But that's all-- you wouldn't have to build anything else. OK, thank you. Yes, Council Member Hawkins. Even the coal plant that we own part of right now, one of the major assets of that is of course the land, but it's the transmission lines going out of it. That's what's even bringing-- More value than the plant. Right. Yes. OK. So for the big finale, rates, that's the bottom line, right ? We need to have a plan. And this plan-- this was a slide that was presented when we initially announced this plan. What's our current portfolio look like as we go forward? What would it be with the renewable debt plan? This saves $500 million over 20 years. That's still the case. It cuts emissions by 74%. It reduces gas use by 38%. All those things are still there for this plan going forward. So that's all I have to say about rates unless there's other questions. So we're spending-- just on the deck, we're spending the-- since it's two separate transmission substation deck, it's all separate. Therefore, is all of that included in the decrease in the rates? So the decrease in the rates, the step-up transformer from step-up transformer back towards the plant and all the plants included as part of the plant project is included in all this cost. The substation and all that is included in the transmission business and will be filed as part of the transmission cost of service. But that also helps us bring our rates down because we're getting reimbursed in that. Correct. So whether or not they're dependent on each other, it all helps our rates decrease. Yes. This projection only took into effect the renewable dentin plan and the generating side. It would assume T cost being the same in both cases. So we're spending over $700 million to save $500 million? No. No, we're not. No? OK. No. I mean, I'm not sure how-- where the disconnect is here. What I'm hearing is without the DEC, we still would do these transmission upgrades. There's two options. We do them and we get the rate of return, which then applies to the bottomless. Does reduce our rates a little bit, a little bit. Or we have Brazos or Encore come in and our rates don't get reduced because we don't get the return. They may even go up a little bit just depending on-- plus then we don't have control over who we negotiate with, how we negotiate, eminent domain, those kind of things. The primary rate driver-- so correct me if I'm wrong because if I've got this wrong, I've not been hearing this correctly. The primary rate driver, these $500 million worth of savings. OK. Yes, that might have some transmission reimbursement in it, but the majority of that, I would probably say 80% or 90% of that, is the savings between being able to generate your renewable energy prices through wind and solar. You're not out buying on the market and you might have cheaper energy that you can use for peak. Because I think what you're saying is, OK, it's almost like there's an argument trying to be made that somehow the transmission and the deck are interrelated to get these low rates. And I'm saying, I think if you're-- business as usual included business as usual, which is the additional-- and I'm just going to use your numbers, whether everybody agrees with or not, we'll go about what we've talked about. But business as usual said we will spend $500 more million for energy if we don't have the debt. You got a savings. You got a savings. Right. The savings number did not have any difference between the scenarios of what our T-cost revenue would be. OK. What we looked at was over the next 20 years, we're going to spend $2 billion, $2 billion on purchase power by having this plan, by being able to secure 70% of our energy under contract from renewable sources, which is allowed by because we have this backup generation. And being able to secure our contracts and have fixed prices for the next 15 to 20 years by being able to generate when prices are high because we have our own generation. Being able to have the market. Those things creates the $500 million savings in Texas from $2 billion to $1.5 billion. And the plan that you're referring to includes a little bit of additional transmission infrastructure from the DEC to the ARTI. But all of that other transmission that we've talked about that's been in all these charts, the FERC study, all of that, you're not saying is part of that plan. That's separate and apart from that. Correct. OK. It's the same in both. OK. All right. That would be the only one. Councilmember McGarry had a question, then we'll go to Councilmember Briggs and then Councilmember Grigg. I really appreciate you putting the key assumptions portion on this because I think this is a new kind of, anyway, kudos to you for putting that because it helps place everything in context when you know what the assumptions are. So appreciate that. I wanted to clarify a little bit on the natural gas features in the PPAs because during the discussion about DEC, that's really where I diverged from most of Council. Is this graph using the high gas scenario or the low gas scenario? Because we had two different scenarios provided by the Br attle group. I believe I don't recall those who presented in Brattle and I don't remember what their assumptions were. What we did was based on our, I mean, this forecast was done based on our forecast of what the natural gas features were. So my memory is that there was a $500 million savings over the period of time we're talking about if you use the high gas scenario. I think this was a low gas scenario. I remember it being $200 million for low gas. Anyway, and then the PPAs, that's one point I want to make was we're not sure if this is the high gas or low gas scenario, just to clarify. Second one is the PPAs, we're assuming that when we purchased them in 2016 for 20 years or 25 years, that is the bottom of the market for the pricing, that it's only going to go up from here on out in terms of the cost of wind energy. Is that correct? Yes. I mean, and that is one of the risks of when are we at the bottom of the market for wind and solar power. And so could wind and solar go cheaper? That is a risk. When you sign any fixed price contract over that long period of time, that certainly is a risk. Well, the reason I bring it up is not to harp on the risk iness of it, but to show, try to demonstrate that the amount of savings that we are projected to have is linked to whether or not we purchase those PPAs at the bottom of the market or middle of the market or peak market because that affects how much our savings is in the future. If in the future the PPAs end up being half the price that they were today, we're going to have less savings, obviously. So I can assure you that the quotes we're getting back on the PPAs today compared to what we anticipated getting when we made this forecast, the quotes we're getting back are less than that and we're seeing better pricing. So that's why we feel confident that this is still a good estimate of savings. And you're not worried that the prices will continue to go down? No, I'm worried about it, and that's why we haven't rushed to market and immediately come back and said, hey, we've got to sign this right now. It's because we keep monitoring the market to look and see because one of the big factors in that market is the continuation of production tax credits or investment tax credits. Under this current administration, indications are those could go away. And that can certainly influence us to believe that this could be the bottom of the market because you're fixing to have some tax credit potential go away and be good to take advantage of those while we can. Council Member Rueck? So Mayor, I wanted to respond to you. The transmission upgrade is necessary. Like I totally get that. Oh, OK. Yeah, I mean, it's a part of the rate and the reliability. It's like our insurance policy. I mean, I'm all on board with transmission after reading that. I'm not trying to make any argument. I'm just trying to understand. Oh, sure. And my comments weren't directed at you. I mean, there's been several just today and then just in general. So no, they weren't directed at you. And I'm trying to get clarification as well for the citizens and for us that, you know. Absolutely. No, we're in the same place on that. Council Member Gregory? Thanks. And reliability certainly has to do with transmission and with distribution. But reliability was also part of the deck of the Denton Energy Center in terms of us expanding our portfolio of renewables, but being able to have backup when there was, when the renewables weren't available because they're not dispatchable. I think one of the important things about this whole issue is that we're making significant investments in infrastructure. And we're willing to do that. And I think the lesson, you know, when we look at state government and federal government is that there seems to be less of a willingness to do that, which is why you see literally bridges on interstate highways collapsing and people dying because there's been a reluctance at the state and federal level to invest in infrastructure. And if we weren't doing this kind of investment in infrastructure, transmission and distributions, here we would be having the issues that you've talked about . And it's, I find it, it would be a different story had we actually had blackouts on that August date. You remember it. You remember the date. You remember the hour. You remember who called you. And we would all remember it had we actually had that experience of those blackouts that day. You averted it, but it sticks in your mind because that's your job is to keep that from happening. And making these kinds of investments in infrastructure will guarantee that that won't happen and that none of us will ever think twice about it when we flip the switch or when it gets to be that hottest day of the year. Let me be clear. My team averted it. I didn't avert it. Let me assure you that the team at DME used to want it. They came up with a plan to figure out how to avert that. Noted. Okay. Any more slides? So any remark was we were charged to come up with a plan that delivered competitive rates, reliability, renewable energy. It's still there. Mayor Pro Tem. Thank you and I appreciate the presentation and the discussion. And I think in part this came about because of in part some of us were getting a lot of emails from some certain perspectives that had kind of made their way through the interwebs, so to speak. And so I see those -- and I just want to make sure I'm understanding what the controversy was or what that perspective was so that I can make sure we 've got that answered. So I'm going to outline what I think it was and then if anyone else wants to jump into that because I just want to make sure we're crystal clear about what we're saying. Jim crystal clear. All right. Let's go. We've been on this a lot. Yeah. Let's -- One of the assumptions was that DEC was originally proposed to be costing around $227 million in that somehow it had ballooned to $1 billion, I think is what one of the statements was. And I think we were clearly understanding that that was a misunderstanding of combining transmission distribution, all these other things together, which was dependent upon another misunderstanding, which was that the DEC plan was somehow intertwined in a way that had a dependent relationship on the transmission infrastructure project, which as we've seen was number one in place a good five years before DEC was a twinkle in any of our eyes. But also would need to happen whether or not we were pursuing our own energy generation. Those are the two things as I understood some of the emails I was getting. Is there anything else that I'm not understanding about what some of these questions were? I just want to make sure we're addressing all of them. One clarification I would make is that, you know, it's not about the Ditten Energy Center. The Ditten Energy Center is a piece of a renewable Ditten plan that without that piece is critical because without that piece, I can't go get the larger prize , which is a significant increase in physical renewable energy that locks in pricing and lowers emissions. And that was the only clarification I would make. Okay, yeah, I'm about done with this conversation, quite honestly. I think we've talked for two hours on this. First of all, I want to thank every one of you for the conversation. I think this has been spectacular. The questions have been good. We've been, I think we've handled it in a civil, respectful , but also in some things we might have disagreed on. So I really do appreciate that. And I'm going to let you have the last word, but I do appreciate Phil. I appreciate your staff. I appreciate the people who've sent us the emails to help spur these questions, to help us try to flush out, well, what is, how do we really understand this project? So I think this has been a joint effort, not just by staff, council, but the community as well as, because I agree with you, Council Member Briggs , our whole point in all of this today has been to try to help the community have a better understanding. And I think if there's still lingering questions, we'll hear them. And I'm confident, based upon this presentation, we'll address them. So thank you for the presentation, for the authenticity and just the transparency that we've seen here today. And thank you for helping us to get to that point with sort of a new fresh set of eyes and some new approaches. So I'll let you, you said you wanted to sort of close up. Yeah, and first of all, I'd like to thank Phil and his team for putting this together. I think Brian and I have put him through this, this is probably version 85 by now, you saw today. But I don't want this to be categorized that staff was necessarily responding to any one resident or any group. I mean, it became real clear to me coming in just how difficult this issue is to absorb. And I think part of the, Councilmember Briggs made a point about, well, you know, we could have gone into some detail in some other areas and you're right. I think that's part of the problem and how we got here is because we've taken one off issues and maybe not provided the broad context and perspective and that's on us. You know, we can present this information better in terms of frequency, whether we're going to get another kick at it. That's really up to the council. I mean, if you'd like to see this every year or two to educate the residents, we're happy to do whatever you want, but I just felt it was important to move forward that we get people that we put something together that we can all sort of talk from the same facts. And I think part of this has just been how discombobulated the issues are. You get really hammered with so many different DME and so many different city issues. It's hard to keep all this in one context. Some of you with more tenure on the council or you've got an advantage. And so the point here was can we just create a document for the next few years we refer back to, we measure against, we look for any differences in consistencies, messages, but really that we're telling one story simply. And that has been extraordinarily difficult and I do feel a lot of credit for that. The only other thing I would close on with this is I'm a little concerned about the oversimplification of the debt from a couple of perspectives. One, in any utility your large customers are going to have a huge subsidy factor on residents. And if we took the $500 million budget and divided it amongst 50,000 customers, that means all of you are paying about $10,000 a year for an electric bill, which is just not happening. So we need to be a little careful with oversimplifying and using metrics like that because it could be dangerous to the public. And we're really trying to bring some openness and simplicity to an issue. But I think that we're happy to break out this presentation as frequently as you like. I think we owe it to the residents, we owe it to all of you . And I hope the high level view was helpful to everyone. But that's really all I had to add is just we're happy. In terms of the debt, I know that number is scary. And I can say this being new to the community and new to this issue, given the value of this utility, there is not a doubt in my mind that even though you've got $700 million to a billion dollars of debt, there's no doubt in my mind you could double this money tomorrow in the market if you sold that plant. So what risk is there from a microeconomic standpoint? There is certainly risk in the commodity market, but you're going to have that any way you go, whether we own the generation or not. So I understand the issues, I understand how scary it is. I also understand it could have been communicated better and we're trying. But I just kind of wanted to end on that, that I think we 're really in a fortunate position. I wasn't here for the debates on the deck. I understand it. But what we can do moving forward is we can certainly hold ourselves accountable with these estimates that you're seeing and hold ourselves accountable by providing consistent benchmarks and saying, okay, are we on the mark or not? And I think that's fair of you to ask of us. All right. Thank you very much. Appreciate it, Mr. City Manager. All right. It's 5 o'clock. We've got one more item in the budget. That'll go real quick. That'll go by in about 10 minutes. So let's take about a 10-minute break and then we'll come back. Coming back, we're reconvening our meeting with the Denton City Council work session Tuesday, March the 7th, 2017. It is 10 after 5 p.m. We'll go on to our next agenda item, receive, report and hold discussion, give staff direction regarding the FY 2017 and 18 budget process. So we finished the audit on the same day we start the budget. So just can't get enough of us. This is going to be a little bit of a tag team presentation . I will do the first part in terms of we're going to review the revised city budget process for the upcoming year and then presentation of volume or usage forecast for our four utilities. Dr. Banks is going to do water, wastewater and solid waste and Mr. Williams is going to do electric. So I'll do my part and kind of turn it over for those forecasts. In terms of the budgetary process for the upcoming year and I'll try to kind of highlight what's going to be changed from prior years and the first bullet is one of the changes. We're going to start the process with efforts to reduce ine fficiencies, cost and duplications of service. So in our budget presentations to the council, that will be kind of the starting point as well as to PUB. The focus will be on cost containment strategies for all funds. We're going to prepare what is called baseline budgets here but really for all funds and present a no increase budget in terms of a baseline budget in rates, fees or taxes. So for utilities that means no increase in rates. On the tax side that would really be what the council calls the effective tax rate. So we would only have growth in property tax revenues from new construction. Now, we may have, you know, growth, just growth may increase some revenues but no changes in fees. And the staff recommended budgets which may be different from the baseline budget or may be the same, be based on cost containment efforts, goals for the upcoming fiscal year and beyond in the long-term financial plan. I know you've already heard today from the fire department about concerns about an additional unit, medic unit, which we've added in the past medic units so that may be something included in here. I get the joy of presenting all the summary budget overview s to both the city council and to the PUB which is a little bit different with support from departmental staff on rates, projections and capital plans. And all presentations that are given to PUB will be followed by the same presentation or summary version to city council. So these initial estimates of usage for the utilities were given to PUB at their last meeting in February. So we're coming back to council. So that's a bit of a change from prior years. We'll also be giving in your budgetary backup line item details and staffing levels. We'll go up to the PUB and to the city council in presentation material. So when you get the proposed budget, the book may be a little bit bigger this year and we'll give some line item detail in terms of the backup. Oh, yes, mayor Pro Tem. I just want to understand the -- of course I'm not going to probably be here for most of this, but I'm just curious. The baseline budget, it sounded like you said what that means is if there's an increase or projected increase in revenue, that the budget will reflect that. The baseline budget will still reflect that. So could it still involve new program suggestions and things like that in the baseline budget? It still could. For example, the sales tax rate will stay the same, but if sales tax revenue grows, for the utilities, the rates may stay the same, but because of new customers, they'll have a little bit of additional revenue. So it still could include maybe some programs that weren't in this year. For example, the property taxes at the effective tax rate could still include some of those, but we really have to get the numbers in until we really know what that is. I'm not going to go through the whole budget schedule, but we've tried to line it out so that it comes to city council at the same time or after PUB so you can see where PUB receives some presentations in May and then the city council. I do want to highlight a couple things, June through July, we're prepared to present each department, kind of a summary presentation of that department's goals, challenges, those kind of things to the city council. I think there's five meetings in June through July where we would propose to do that. I'll also want to point out as we get to the proposed budget on August 3rd, August 8th through September 19th, every meeting as we have in prior years, we'll probably have budget discussions. And then we have the required public hearings and scheduled adoption of the budget September 19th. With that, I'll turn it over to Dr. Banks for some forecast . Mosquitoes. No more mosquitoes? No more mosquitoes. We'll have more. Quick comment before you get started. You can stay up there, that's fine. This approach to budget, the budget timeline, I just want to point out is very similar to how Denton County does their budget in terms of having department directors come in and make their presentations. Also it's kind of a sea change in assumptions and how we do business here and I'm just thrilled. That's all. I'm just very happy. Good. Likewise. Yes. And thank you, new city manager. Dr. Banks, it's all yours. Thank you. Good evening, council. I'm here to present the volume forecasting information for water and wastewater and the usage information for solid waste as Mr. Springer said earlier. This is something that we do at the beginning of the budget cycle for the public utility board every year in the February timeframe. And it's an important aspect of the budget. It's not a budgetary item in and of itself, but volume projections turn into dollars through our rate application. And so it does have a bearing on what our budgets end up looking like. It also has a bearing on our capital programs. So we have to consider what our usage rates are looking like, what our overall volumes are looking like, for example, on the water and wastewater side and plan our public infrastructure accordingly. So it's got multiple roles. The volume projections on water and wastewater have become more sophisticated through the years. I want to do a quick acknowledgment of Tyler Dawson and Cassie Ogden, go ahead and wave, who are the people that do the real work on this. They work very hard on this volume forecasting and work with the general managers of water and wastewater to put this material together. On the solid waste side, Scott Lepsak and his group, Tina Eck, work very hard on their projections as well. This slide is a projection of where we think our water volume usage is going to go in terms of our water customer class, which will turn into volume usage, is going to go on the residential, commercial and wholesale side. So this is driven in part by population. It's also driven by on the water and wastewater side weather patterns. And so if we have a dry year, we'll be projecting more water usage. And so we have to kind of keep all of those things into account. We've also had another issue that's been going on that I believe we've mentioned to the council through the years is that we have a declining gallon per capita per day issue associated with our community. Irrigation is becoming more efficient. Appliances are becoming more efficient. And the amount of water used per person has been going down in recent years. And so we have to plan for that as well. We still have to be able to always, as Phil said earlier, deliver the peak demand on the water side and be able to accommodate the peak discharge rate on the wastewater side. So you're always going to see our capital be a little bit out ahead because we're planning for those peak usage periods. So taking all that into consideration, we're basically looking at an increase of about 642 customers, 17 to 18 on the residential side. Dr. Banks, we just had a real quick question. Yes. Council Member Gregory. So on that, just looking at that blue highlighted line. Right. The 2.1%. Is that growth? That's correct. Is that growth in residential customers or growth in usage? It's a growth in residential customers by the various classes. And that's the same thing for the commercial? That's correct. So you can't, because I was looking at the previous residential and the average was about 1.8%, but we're estimating 2.1%. So it's a conservative estimate? That's correct. Okay. But if you look at commercial customers, we've grown by more than 1.1% over the last five years or six years. But we're estimating just 1.1%. Why is that? Tyler, do you have an answer to that? Yeah, if you'll just come to the microphone where you can be heard. Thank you. I'm just concerned that we may not be projecting as much growth as what we've been experiencing. Right. A lot of this is driven by what we expect to be a future kind of ideal split between residential and commercial customers. We've had some guidance on that in the past. We're always willing to revisit those numbers, but we look at how are we moving towards, how are we turning towards that future estimate and how do we need to adjust? How soon are we going to reach that? Things like that. So yeah, what you're seeing now is a little bit, I think it 's about a four-year average on residential and you're right, commercial is a little below that. But we saw it shift a little quicker than we expected, so we're kind of slowing down that shift towards the future. So you were looking at the trend. Yes. Okay, thanks. Thank you. Going to the wholesale, we're not projecting any change on that and then we've got a total overall customer component 35,420 as projected. One thing I did want to point out on the 47 on the commercial side, when we get to the wastewater side, you'll notice some slight deviations in these numbers both on the residential and on the commercial side. The deviation is going to be much more significant on the commercial side. That is because these are all of our commercial usage. So we're basically looking at commercial facilities that have separate meters, multiple meters, so you'll have one for the supply for the facility itself and then you'll have an irrigation meter, for example. All fire hydrants are considered to be on the commercial side and that's a pretty significant amount. And there are some residential and commercial facilities that you're going to find out there that have on-site sanitary sewer facilities instead of connected to the sanitary sewer. And so those are the reasons for those deviations. I had questions come up in the past on why those numbers aren't more aligned and those are the reasons for that. So here we go. Basically what we are looking at in doing these modeling projections is we're putting together an estimate based on your actual peak day information. So this is the peak graph. And you're contrasting that against what we see on a dry year, which is a 27-inch rainfall or less, an average year, which is 37 inches, and then a wet year, which is 47 inches. And effectively this is a self-correcting model. There's a lot of variables that are used in this model, so we're looking at rainfall, but there's also rainfall frequency. That's very important. It's not only about the overall amount of rain that falls during the year. It's about when that rainfall occurs. So if we have a wet summer, we're going to have a completely different use profile, even though we may have an average year in terms of total rainfall. The other issues that we are going to be taking a look at are things that try to integrate the idea of how dry it is. And so a drought index, for example, is one of the things that Tyler uses in his model. This is going to be a self-correcting model. Generally, it's going to be walking forward in three-year average intervals, and so it takes it a little bit to catch up. We always have the challenge here in recent years of trying to determine what the difference is between the impact from rainfall and then the decline in gallon per capita per day that I mentioned earlier. Those two effects are pretty difficult to separate out. And so what you've got here is our current estimate of what our peak days will look like with regards to a dry year, which is the red line, the blue year, which is the average line, and the green, which is a wet year. You can notice in the last few years, we've been having some usage patterns in terms of peak day that have been substantially below those lines. And that is due to, in part, to some wet years. It's also due, in part, we believe, to the decline in gallon per capita per day. And so that's starting to pull that model down a little bit as we move forward. So as we go forward in time, those lines will continue to go down if that trend continues. So Tyler's added our current year projection on there and then our upcoming 2018 projection, which you can see is a little bit below the now current average line. So this is a very important graph and very important analysis for us to do to take a look at our infrastructure needs. So for example, we've got a projected 30-MGD upgrade that's needed for a planned expansion for Lake Ray Roberts that is right now listed at the 2025 range. We're thinking that's going to move out the way things are going a couple of years in the future. We have a tendency to need to plan for these at least a few years in advance. So right now, we're probably looking at somewhere around a 2024 timeframe to start planning and a 2027 timeframe to, or later to actually start the construction. And again, this self-corrects every year. And so we've had a tendency to see, because our usage patterns have decreased, that timeframe for planning has been edging out in recent years. How far it goes, we won't know at this point. We just know that we'll be able to self-correct every year and get a more accurate analysis as we get closer. Anyone have any questions on that issue? Okay. In terms of water rights, that's also a very important aspect of looking at our system and how effective we're going to be to be able to meet the water demands of the city. It's a similar situation in terms of looking at a dry year, average year, wet year, and it is self-correcting. I can make this graph pretty easy to understand. We're well beyond the planning horizon with our need to secure additional water resources. So next 20 years, regardless of scenario, we're in very good shape. That's it for water. Very quickly on the wastewater side, a lot of the same analysis is going in in terms of looking at population and usage patterns on the wastewater side. As I mentioned, the numbers are going to be a little bit different, particularly on that commercial side. It's quite a bit lower percentages calculated in the same way. This is also very important for our capital planning. And so we're going to be looking at the amount of wastewater treatment capacity that we're going to need in order to be able to service the community. We've got a couple of different scenarios. We've got the average usage line. We had on the docket to take a look at a design capacity for the Pecan Creek wastewater treatment plant because we were getting close to our design criteria, which is 75% of our overall capacity. Those numbers are coming back down again. And so we believe that the additional amount of discharge that we were getting that year was predominantly due to the fact that those were two pretty wet years. And we're starting to trim back down again. So it appears that we will be able to push that capacity outwards for a couple of years and put off those capital programs. Of course, growth has a great bearing on this particular issue. And so if our growth projections start to show up a little bit more and usage patterns continue to show more discharge, this scenario can change. But right now we're looking at the design capacity not being within the timeframes we're at. We're thinking we can push this off at least a couple more years. We're seeing some of the same patterns show up on the wastewater side than we're seeing on the water. Because usage is declining, we're also seeing less wastewater discharge than we have seen in the past. And so that means our infrastructure can last longer with existing capacity. So we've got the opportunity to push that out. And of course, that can continue to -- it will continue to be analyzed on a yearly basis to make sure that we have got the right analysis in there. Wow, you guys took a lot of slides out of it. So yeah. Sorry, I had a big finale slide in here that I don't even get to use. >> Councilmember Gregory had a question. On the wastewater, is there sufficient room at the Pecan Creek plant for expansion? >> There is. There's a couple of variables that are going on there. We have an agreement right now with a developer that was looking to develop a development that was originally called Hills of Denton. And that was planned for a small plant to be built in the Clear Creek Basin. That agreement is still alive. It's alive until 2018. And so that will have an influence on the Pecan Creek plant . The way these operate is what you have a tendency to do is you build plant capacity and then you build in-system storage and then you build larger plant capacity as you're getting closer to the compatibility of the in-system storage. I'll move back. Sorry. I moved too far. So right now we're in the stage of building the storage components of the plant. And so we've got two major storage projects that are on the books right now. One of them is a storage facility that will exist in the H ickory Creek Basin near the bent oak subdivision, near Country Club Road and the railroad crossing. And that will offer us the ability to take peak flows and store them in above ground storage tanks and then feed them back into the system later on, later after the peak flows have subsided. We have a tendency to have to plan peak flows on the wastewater side related to water infiltration through storm water events. And so that's a basin that will take that wastewater and hold it. We're simultaneously upgrading the old Alton facility. So we'll have a second wet well there and a pump system. And then we have upcoming a third project that will actually be a 9 million gallon diversion at the plant where it's stored in a big lagoon system and then fed back into the plant. Does it have enough room to expand? Yes, it does. And we will get to that point. But it's really, we're really in the game right now of building that in-system storage to deal with the capacity factors. We'll be looking at doing a plant expansion whenever we reach that far peak up on the right side of the graph. And the follow-up question, you don't have to worry. The follow-up question is... We're making these short presentations. Regarding the infrastructure, that that plant is fully operational and the age of it is not affecting its ability to handle the load. That's correct. I mean, Ed, that plant is a well-maintained plant. And the processes that it has in place are proven processes . We've implemented some new processes with regards to the phosphorus limit that we have had imposed on us recently that has been optimized. That plant was able to deal with that issue effectively. So yes, I think it will be able to handle it, especially with some of this in-system capacity. Keep in mind, too, that's a dual-system plant. We can shut off half of it at any time that we need to. And so that gives some real resiliency and it enables us to do some pretty aggressive maintenance activities on that plant and replacement activities on that plant. Okay. Any other questions on the wastewater side? All right. Talk a little bit about the solid waste and recycling component. A lot of the same kind of analyses are going in here. They're looking at past trends to project future tonnage coming into the facility. And so you can see these changes that they are projecting for 2018. Fairly consistent increases that we've noticed over the years. You're looking at about a 2.7% increase on the monthly average customer count in terms of the refuse carts in terms of tons. You're looking at about a little over a 5%, about 4.5% on the recycling carts themselves. And then the total tons, about a 4.1% or so increase. So you can see kind of how things are increasing through time through the graphs at the bottom. And basically again, this is just based on past patterns projected forward. Same thing for commercial. Looking at their past history, projecting that forward. About a 4% on the refuse containers in the field. About 1% increase in recycling containers. About 5 on refuse tons. And recycle tons has actually seen a pretty significant jump 17 to 18 at about 12%. So you can see the total tons, about a 5.8 or so percent increase. And that's pretty much it for the solid waste side. And again, all these numbers turn into anticipated revenue based on what we're projecting in terms of increases with these various customer classes. So any questions? >> Seeing none. Are you handling the electrical as well? >> I am not. I believe that's going to be Mr. Williams. Thank you. >> Thank you. Thank you, Dr. Banks. >> I didn't want you all to miss me. >> What did you say? >> I didn't want you all to miss me. >> It's pretty straightforward. Really what we do is 10-year trend analysis to go forward and based on that, projecting the customer class growth, gives us customer growth. I think there were some questions earlier about what we anticipate the customers being in the future. And this shows that, what we forecast that to be. Same thing for our annual sales. As you saw the chart that I had in the earlier presentation , you saw the, what I call the salt tooth up and down, mainly influenced by weather, sometimes by recession. We've seen that effect from both and mainly from weather. And this is just the same chart that you saw earlier as far as our trend line and growth. That's all I got. >> In the two charts we looked at there was another column that had a strange anomaly in 2017. That one and in the previous chart. What is other? >> That's the problem. We'll have some different rate classes that are new and come up and we'll classify those as later time. Usually up and down is finding a home in one of the other categories of commercial or industrial. Or residential. It depends on as we create those new rate classes, sometimes new rates, time abuse rates, those kind of new rates, we'll transfer customers and recap itulate them and where they go. >> I'm guessing a couple of our bigger customers are the University of North Texas and TWU. Are they in commercial, industrial? >> Mostly industrial. Our top ten customers would be, as you said, the two universities, two hospitals, the ISD, the city itself, all the pumping. And getting the Peterbilt and Tetra Pak and some of those. So those would be our top ten customers. >> And that number under industrial, 578-769, is that kilow atts? >> Yes, megawatt hour sales. >> Megawatts. Okay. Thank you. >> Any other questions? Okay. Is that it for this? Okay. So any questions overall? >> Just another question back to the baseline budget. Does that include utility funds as well or are you guys just doing that with general funds? >> It will include the utility funds as well. They're a little more challenging to deal with based on cost of production, that sort of thing. But it's the same basic philosophy. Really taking a hard look at the assumptions, tax assumptions, staffing levels, that sort of thing. So it's really kind of paring back the base budgets to sort of a zero base budgeting and making, having the department heads go through the process of rebuilding the budget. So with the main goal of ensuring that any incremental costs are kept out of the budgets moving forward. >> My only thought with that is a philosophical question. I mean, as it relates to utility, as we look at rate changes, the ideal is to make that capture our needed infrastructure changes in the long run. And certainly as we're looking at something of a general fund nature and talking about new programs, increased spending, whatever, there's clear different politics at play there than what I would be comfortable with having politics at play at the utility level. Because you'd hate to get at a point where everyone felt the need to dive back down to the base level every year, which would mean we're not investing in the infrastructure. So I don't know how you defend against that as that gets into the budget cycle or what the posture of the council is, but it just perhaps puts us in a position or puts you all in a position of having to say we're increasing rates every year. >> The utility funds are a little easier to deal with, quite frankly, than the general fund budget. Your costs on debt are fixed, your philosophy on CIP is pretty simple. We can make adjustments. It's very similar to running a private business during the year. You can make adjustments throughout the year based upon whether you've had some variable going on. So it's a little simpler and quite frankly, the reason I say that is your personnel costs aren't going to play nearly the role in the utility side that they will on the general fund side because they're so heavily fixed costs on other components. But it's still generally building that same justification philosophy citywide. >> Any other questions? All right, this concludes our portion of our work session. We will stand adjourned at 542 and reconvene at 630 in the council chambers. a. Good evening, I wanted to welcome everyone to this meeting of the Denton City Council on March the 7th. 2017 is now 630. We do have a quorum, so I will open the meeting. If you would join with me as we pledge allegiance to the U. S. and Texas flag. >> I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all. On the Texas flag, I pledge allegiance to the Texas, one state under God, one and indivisible. >> Before I read the proclamations, I wanted to welcome a class from the local government, public administration department at UNT, Dr. Benavides' class. Who's here for that class? Oh, wow, great. Okay, we got to really make this an interesting meeting tonight so that they'll either be encouraged or discouraged from going into local government. Now, thank you all so much for being here. Appreciate you being here. National pancake day in Shriners Hospital for Children's Day. Who's here to accept this? Anyone? Okay. This is a proclamation by the mayor of the city of Denton. Whereas Shriners Hospital for Children is a national nonprofit organization committed to giving children the opportunity to live a more normal life, and whereas Shriners Hospital for Children gives children the opportunity to receive treatment for orthopedic problems, severe burns, and spinal cord injuries and provides them with a head start in developing a normal life, regardless of the patient's ability to pay, that is essential to becoming successful and contributing adults. Whereas on March 7th, 2017, Shriners Hospital for Children and IHOP will join together to encourage people to donate to Shriners Hospital for Children activities in our city. Now, therefore, I, Chris Watts, mayor of the city of Denton , Texas, do hereby proclaim Tuesday, today, March 7th, 2017, as IHOP's National Pancake Day in Shriners Hospital for Children Day in the city of Denton and urge all citizens to donate to Shriners Hospital for Children in support of their efforts to provide first- class medical treatment to the children who need it most. So go out to IHOP and I think it was either get free pancakes or something. I don't know, but support Shriners Children Hospital. They do great work. Poison Prevention Week. Proclamation by the mayor of the city of Denton. Whereas our society has become increasingly dependent on household chemicals to perform labor-saving, time-saving miracles and on medicine to provide health-giving, life-sustaining benefits. And whereas these products, when not used as intended or directed, may be hazardous, particularly if children gain access to them. And whereas over the past 55 years, the nation has been observing Poison Prevention Week to call attention to these hazards and how proper handling and disposal of these substances and proper use of safety packaging can help eliminate them. And whereas the effort of our community organizations, complemented by the efforts of the North Texas Poison Center, have reduced childhood poisonings in Denton, Texas. And whereas the North Texas Poison Center, a regional poison center located at Parkland Health and Hospital System, provides the ultimate in human service programming immediate accessible emergency information to save lives of victims of poison- related emergencies. And whereas these programs must continue as long as even one child swallows a household product or medicine by mistake. Now therefore, I, Chris Watts, mayor of the city of Denton, Texas, do hereby proclaim the week of March 19th through the 25th of 2017 as Poison Prevention Week in the city of Denton. Further, I direct the appropriate agencies and our local government to continue their cooperation with concerned citizens and community organizations, including our schools, to develop programs which will alert our people to the continued danger of misusing medicines and household products and to promote effective safeguards against accidental poisons among young children. The Denton City Council has adopted rules of procedure, including a code of conduct which applies to citizens as well as council members. These rules were enacted to promote an orderly process and to preserve decorum. Here is a brief review of the rules that apply to citizens' reports. Citizens will have four minutes to give a report. There will be an electronic beep when time has expired. If the remarks are not concluded by that time, the citizen will be asked to stop speaking. If the citizen does not cease and a second request is made, the mayor will request to have the citizen removed from the council chambers. Citizens are asked to not approach the dais. If a citizen has papers or other materials to hand out to the council, please let the city secretary know and she will have a staff member distribute the materials to the council. The attorney general has ruled that council members may listen to citizens speak and may ask questions of citizens for clarification of the issue. Council members will not engage citizens in discussion of a topic because to do so could potentially be a violation of the Open Meetings Act. When speaking to the council, citizens are to direct all remarks and questions to the council as a whole and not to any individual member. Please refrain from making abusive, personal, impertinent, profane or slanderous remarks. Anyone who violates this rule will immediately be removed from the council chambers. Citizens' adherence to these rules will help make an effective presentation and will preserve the order and decorum of our proceedings. Copies of the rules of procedure are available from the city secretary. Our first presenter for agenda item 3.1 is Bud Porter regarding ideas for helping to protect at-risk citizens. Bud Porter, 320 Fulton Street, 76201. First of all, thank you again for seeing me or for letting me come before the council. Still learning my way around it, but I appreciate all of you. The first thing comes first is I needed to educate myself on the topic of how can we protect at-risk citizens, what is protection, what's necessary, reasonable, given the political climate that we're in now. I've had to teach myself and I'm challenging myself to learn every day. The first thing that caught my eye is a lot of churches in different areas have been saying they'll take asylum. Some churches in some cases have taken asylum and that became a complex thought to me because what does that actually mean in our current state? Asylum you think of, I guess, a medieval time. Run into the church and you're safe, but that's not what I see. It's obviously a modern time. My first study of this brought along the Department of Homeland Security memo in 2011 that effectively alleviated a lot of our current or a lot of the more assert ive deportation, immigration, enforcement procedures. Then obviously in 2017, recently, we've had effectively that has been rescinded. What I tried to understand is, is there any language between the two because there's language in 2011 regarding a focus on not targeting sensitive areas, being schools, churches, places like that. That caught my eye. During the 2017 report, I couldn't actually find any information specifically regarding churches, but it does rescind the 2011 report. What my interest is, the 2011 report is actually a comment on the subject of sensitive areas. It doesn't outline sensitive areas. Now that it's been rescinded, I feel like there's a lot of, for me, confusion in what does that mean for our churches now if an asylum situation were to come up. Is it that we are, is the Department of Homeland Security to avoid sensitive areas? If our police become more involved with ICE, what happens to these churches who are considered sensitive areas? Are they still considered sensitive areas? How does that apply? Would another order come down to change that? So what would our police's response be regarding a change in the status of a sensitive area? And so what I really desire from coming to before you all eventually in the long term is to have some clarification on what would happen, what does happen with sensitive areas because the biggest issue in 2011 when this order was put out, the first memo, I don't think people were concerned about church doors getting kicked in. Now in our relevant political climate, there are plenty of people who are worried about church doors getting kicked in. And that's neither here nor there what anyone feels tonight . It's just that is what a large population of people feel in communities across America. And so I really do desire to have some amount of clarity regarding how churches and asylum interacts with ICE, immigration, our local police, specifically what our local police feel regarding that issue. And other than that, I also have a thought that I think would go a long way to help improve the feeling of security in our community is that we, at least as a city, proclaim that we are a welcoming community and accepting of all citizens no matter who they are, what their affiliation, what their creed is. It's a small step. It may not seem intrinsic, but it really, really is. And I think a lot of people would feel at ease if we were to do something like that. But thank you for your time, guys. I really do appreciate you all. Thank you. Appreciate it. Next speaker is Brad French regarding small cell attachments. Good evening. I know you all have been in meetings all day, so I appreciate your time. I'm Brad French, 207 Royal Oaks Place, Denton, Texas, 76210 . I do want to thank you, Mayor, and of course, council members and staff for allowing me to be here today. I do want to keep it short and just kind of go over a few things. I work with mobility, and we're a large infrastructure, and we're looking to put small cell infrastructure within and around the city of Denton like we do in Dallas and other cities around here. So what I'm looking for possibly is just getting any kind of questions or concerns you all might have. One good thing is in the nine months I have been working with the city of Denton, trying to get some ways forward is to – I did meet with the assistant city manager today, so thank you, Mr. Fortin, for meeting with me. So we did meet. We kind of got some ground going. I think we have a way forward, but in turn, I wanted to kind of bring up a few things and kind of give you an idea of why these small cells are relevant. In and around UNT campus, if you all look, probably most of our students in the back, here, they may have multiple devices, and we're going to 5G . 4G LTE is kind of the newest thing, and if you don't have 4 G LTE, shame on you. But now 5G is going to be the most relevant thing. So what we're trying to do is be 5G relevant and 5G ready. So 5G is coming. It's just a matter of whether Denton is going to be on the forefront and able to handle 5G, just like driverless cars. We've got those, but if we don't have the infrastructure in place, there's nothing we can do. So what I'm asking for is just political support so that I can move forward with the assistant city managers, with staff, to find a way, whether it be agreements in whatever way, attachments, we're willing to bend over backwards to work with the city to make sure that we find a way to get these things done. Because I can't find a way that anybody's seen that data rates have gone through the roof in regards to how much capacity that we're looking at. Now we're not looking to put large cell phone structures, what this looks like, and I'd love to share a PowerPoint with all of y'all that I have. I was able to share with other staff members. But what this will do is sometimes attach to existing light structures. We can put new poles where it's needed. We can match existing infrastructure that's there. So we really want to come alongside. As a Dentonite, I want to make sure that this looks good, it makes sense for the city, and something we can be proud of. Because we can say, yes, we're ready for the things that are coming. And I know that our students and the people that go through Denton on a regular basis, to include all of us, are looking for a bolsterous inside. When I'm in here and I'm getting one bar, there's a problem . So we want to fix that problem. I want to open up the last minute to any questions that y' all might have for me. Any questions? Council? Councilmember Hawkins. Yeah, thank you, Mayor. Thank you for coming, Brad. Just can you give us a little bit about your background and that sort of thing? I know I'd met with you before and I found that to be pretty interesting. I retired out of the military after 24 plus years, and so I came back to Denton because I lived here 20 years ago and fell in love with it because of the culture. It's got its own unique flair. It's something special. Denton is completely different than everything else in DFW. And I would say, I've lived in San Diego, LA, Florida, you name it. There's a unique special place about this. I've got to work with special forces. I've got to do a lot of things. I work with over 50 plus municipalities right now between Dallas and north of Oklahoma City. I'll be in Oklahoma tomorrow. So it's kind of special for me to be here in my own town talking about what I talk about with other people. So thank you. Yeah, thank you for coming out tonight. Any other questions? Thank you. Appreciate it. Thank you very much. Thank you, y'all. You bet. Moving on to our portion 3C, additional citizen reports. We have two cards. Deb Armitar, please state your name and address and your time will begin. Deb Armitar, 2003 Mistywood Lane in Denton. My presentation today is a fairly simple suggestion to all of you about the website. I could have just emailed this to you, but I wanted to say this publicly for whoever is listening as well. To back up a little bit, not too long ago, Police Chief How ell held a wonderful town hall meeting here together with a bunch of other people in conjunction with City Hall that was an education session, an information gathering session about the state of affairs for undocumented people and people who are documented who have family members who are undocumented in this new uncertain political climate where our friends and neighbors and their families, our children's playmates at school are afraid that, you know, maybe not today, but if there's some change in federal law or state law, soon their parents or themselves could be taken away, whereas before they had thought that they were safe because of, you know, whatever kind of DACA status or, you know, visa status or, you know, they hadn't never committed any kind of crime. Anyway, my suggestion about the website is that if you would consider having a section of the website that would provide some of the information that Chief Howell provided for the public, that would be extremely helpful, both to people in the public, and this is my chief concern, our friends and neighbors who are worried about their own lives and families, but it would also be a public service to people who want to know, "Is Denton a sanctuary city?" because it better not be. They can look and see, yes, in fact it's not a sanctuary city. Denton is not a sanctuary city. And so, you know, it'll help empower people with knowledge who are vulnerable as the people that Bud Porter was talking about, and it will also, you know, spread the word that Denton, the city of Denton, obeys, you know, follows federal law, and there's nothing about what we're doing, what our police are doing now, or plan to do, that violates the law. So, and I wanted to share just how, you know, profoundly helpful this information was, even though not all of it was good news, and a lot of it was Chief Howell saying, "I don't know." You know, people would ask questions, and he would say, "I don't know. This could change tomorrow." Afterwards, I spoke with somebody who said that she had had two people tell her that this night, that is the night of the town hall meeting, they were going to sleep for the first time, sleep well for the first time since the November election. So, just having this knowledge, you know, that the Denton police are not going, you know, if they stop you for a routine traffic violation, you know, they're not going to say, "What's your immigration status?" and call ICE on you. That is extremely comforting and empowering for people who really feel so uncertain. So, anyway, I think it would be a win-win thing to provide this information and to have it set up so that the police can update it as things change on a daily or, you know, even weekly basis. Thank you. Thank you. Council Member Briggs. Did you forget that video of the town hall up on our website or is that available? Well, and Mr. City Attorney, I know this is open mic, which it really, because of posting and I don't think we can really have any discussion. So that might be a good concluding item. Okay. Thanks. Thank you. The other card we have is Mr. Willie Hudspeth. Come down and state your name and address. Your time will begin. Good afternoon, Council Members. My name is Willie Hudspeth. I live at 623 Newton. The topic that I want to cover tonight, I need to get in the right frame of mind so I don't misbehave. And Brian's already warned me that he has his cuffs with him and he will drag me out of here with pleasure. So, I'm going to try not to let things get out of hand. He used to be a friend of mine. I want him to stay that way. There's a commercial or something on YouTube. I don't remember which one it was, but it was going viral of a young black boy and a young white boy who were friends. And the white kid said, "I want to look like Johnny." Johnny being the black kid, I don't know the name. That's not the right name just to give you a reference. Johnny was black. He said, "I want to look like him. I want us to be the same." Well, Johnny had his hair cut off short. And so the white kid said, "I want my hair cut off short so we can both look the same." I thought, "What the kids? They've got it. They understand life in a good way. They haven't been rammed through the wringer like we have. They didn't fight in Vietnam and to this day don't understand why I vote for Vietnam. I had to go." But they get it. So I want to try to present this issue that I'm going to present to you in that light. Racism is a taught behavior. Someone has to say to you something and you have to take it in and experience it and you accept it. That's how you become racist, I think. Well, I know I have that problem. Some of you drive really bad out there and you cut me off all the time because I'm old and I know I'm going to get there. I don't have to go there fast. I just drive slow. You cut me off but you at least give me the gesture where you say, "You're number one." You know, well, every one finger I didn't know what it, well, I thought they were saying you're number one, whatever. So I want to talk about that in that light. I want to talk about the council as equal. You view me as an individual and that's all you see as I ask this question. Why in the history of Denton has there only been one African American firefighter hired? Now, I'm going to get the stats on it for how long this city has been a city. And then in the police department, we have over 20 that have been hired. What's the difference? So my suggestion to you is just from friends to friends and brother and sister, let's figure out how much of my tax dollars are going toward the fire department and give it to me. You don't want, fix it so I don't have to pay it since none of my races, see I'm giving my voice up to where, none of my money is being used to hire African Americans in the fire department. So isn't it fair that you give it back to me or allow me to keep it because I'm not, not only that, the parks department and the leadership department, same thing. No African Americans there. DME, Lord help me. Nobody in upper management there and on and on and on. So brother and sister together, let's reduce my taxes for the amount of money that is being withdrawn from them to pay for these fire departments with no African Americans in them and in the history of Denton, you only have one. Have one. Thank you, Mr. Hesbuth. We'll move on to our agenda item four, which is the consent agenda. Council Member Hawkins. Thank you Mayor. I move approval of consent agenda items A through Q, but we 're going to be pulling E, F, and Q for individual consideration. All right. We have a motion on the floor. Chair would entertain a second. Second. Oh, okay. Is the board not working? No. Okay. We have a motion and a second for adoption of the consent agenda items A through Q. Save the items that will be pulled for individual consideration, which are items E, F, and Q. Is that correct? Okay. All right. Let's vote on the board, please. Passes seven, zero. We'll now move on to the items that have been pulled, which are E, F, and Q. Moving on to agenda item four, Q is considered option of ordinance directing the publication of notice of intent to issue $36,610,000 in principal amount of certificate of obligations of the City of Denton for general government solid waste projects. I believe Council Member Briggs, you're the one that had pulled this. Is that correct? E and F? And that your desire was to sort of just have a list of what is comprised of those? Okay. All right. And we've got a card to speak on that as well. Thank you, Mayor. Go over these items in terms of there's two items for certificate of obligation. The first one covers general government and solid waste. Second one covers water and wastewater as well as electric. Chuck, let me go ahead and call, we'll vote on them individually, but let me go ahead and call the item F if we're going to discuss them in the same presentation. All right. I can just go over. I've got the slides separated so I can go over the first part. All right. This one covers both, but the other slides just cover it individually. In terms of the projects, I'm not going to go through the individual listing here, but these are the general government projects and the solid waste projects. I'll leave this up for a minute. There's a second page of solid waste projects. In terms of general government, these are the projects that were approved in the budget for the current fiscal year, '16-'17. For solid waste, we've reduced the amount from what was in the budget to about, let me give you the exact numbers, to about 17.45 million in projects from a budgeted amount of 23.58. If we're through with this one, I'll go to the second slide and show the rest of the projects on there for solid waste. Those two slides cover the first agenda item. Council Member Gregory. If you could go back to the first slide, please. The items under general government, such as vehicle replacement, public safety, those kinds of things, those are paid out of taxpayer funds? Yes. The only one listed under general government, there's a fuel truck for the fleet department that will be paid out of the fleet fund, but the remainder of the projects, the debt service will be paid out of the debt service tax rate, which is a portion of the property tax rate. Do tax dollars pay for the solid waste items, or is that paid from a different fund? Those are out of the solid waste fund, so those are really from your fees that are paid for solid waste services. So that's paid by the rate payers through our rates that cover solid waste pickup? Correct. Okay. Any other questions for staff? Seeing none, thank you. We have a card wishing to speak on this item. Mr. Willie Hussbuth, come down and state your name and address. Your time will begin. My name is Willie Hussbuth. I live in 620 Newton. Let me explain or understand something about what you just presented and the question that was asked by the council. There is no difference between the rate that is paid and the money that is paid that you termed taxpayer's rate. In both instances, the money comes from taxpayers. I pay for the rate area. I have to. I have to pay that rate. That money that's collected, some of that comes from me. I'm a taxpayer. I think, unless I'm missing something, you said how much of that is paid by the tax individual or people who are taxpayers as opposed to the rate that comes from solid waste. I don't remember how you said it, but I think the money comes from the same place. Citizens pay for that. You don't just get that money because it's just somewhere comes out of the air. You pay for the service and the money that's generated for paying for the service then pays for these expenditures. To separate them, you don't get to separate them. They're the same. It costs more money. It costs money from us as we are in this, isn't it? Thank you, sir. Council Member Gregory? Thank you, Mayor. I move approval of Item E and the consent agenda. Council Member Hawkins? I second. Let's vote on the board, please. Agenda 4E passes unanimously. We'll call Agenda Item 4F, considered option of an ordinance directing the publication of Notice of Intent to issue $71,640,000 in principal amount of certificate of obligations. In terms of this Notice of Intent, and I should say this is just a Notice of Intent that goes in the newspaper, the actual approval for the issuance of debt will come back to the Council in their second meeting of April. The second Notice of Intent is for wastewater and electric. Normally, it's also for water, but we're not going to be issuing any certificates of obligation for the water fund this year. For wastewater, it is $6 million in projects. This is a little bit below what was budgeted of $8.36 million. And then for electric, we've broken it out between transmission projects and distribution projects. The total for electric is as budgeted, it's $65 million. But in terms of the breakdown, transmission is about $45.4 million, and distribution projects are $19.6 million. All right. We do have a card wishing to speak. Mr. Willie Husband, coming down to stage. All right. Thank you, sir. All right. I have no more cards. Council Member Begheri? Move approval. Mayor Pro Tem? Second. We have a motion and a second for Agenda Item 4F. Let's vote on the board, please. 4F passes 6-1. We have our next pulled agenda item is Q. Consider approval of a resolution creating an ad hoc City Council Committee and appointing committee members to review policies related to employee sick leave and vacation benefits in the City of Denton. I don't believe we have a Mayor Pro Tem, you didn't want a presentation on that. Okay. We do have a card wishing to speak. Mr. Willie Husband, come down to stage your name and address. Your time will begin on Agenda Item 4Q. My name is Willie Husband. I live at 623 Newton. I just want to make sure that on this ad hoc committee that when you make appointments, my suggestion is you do like you did when it came to the committee appointments for the county auditor or no, the selection committee for the governing by its charter, charter amendment group. You argued, I think, so that certain people couldn't be selected to be on that committee, you broke it down in your, the areas that you ran for office in, the seats or the, it's not called seats, it's districts that you ran for. You argued that for that group, you should be, you can only pick people from your district. Well, if you're going to do it for the charter amendment, then either you shouldn't have done it for that and let council people pick from whomever they wanted to pick from or you need to do it all the time because it doesn't make, it is, it doesn't seem fair if you only do it when you want to do it for certain issues but not all the time because I think what you were, two or three of you were after was to eliminate certain individuals who you didn't want to be on that committee. So now you have the opportunity to do it again or to pick a committee, then my suggestion is you do it the same way. You can only pick from someone who's in your district if you're going to recommend someone to be on this committee. That's what I would suggest you do and if you don't, then I question whether or not, why did you do it for the charter amendment committee? Thank you, sir. Council member Wasney. This is a comment from Mr. Hutzpeth. Do you want to come back? Thank you. Kind of clarification, this isn't a citizen committee that is being formed. It's a city council committee with three volunteers, Keely Briggs, Sarah Begarry and myself and the three of us will sit down with the city manager and the head of human resources and take a look at sick leave policy and vacation and how it compares with other North Texas cities, kind of take a look at that and then come back to council and say we've kind of compared and looked at things, this is what we think. So just wanted to clarify that. So thank you. Thank you for that. Appreciate it. Council member Begarry. I'll move for adoption of this resolution. Council member Briggs. Second. We have a motion and a second. Let's vote on the board, please. Agenda 4Q passes 6 to 1. Move on to agenda item 5, items for individual consideration. Agenda item 5A is considered adoption of an ordinance of the city of Denton determining the public use and need and necessity for the acquisition of public water line easement encumbering a 0.148 acre track of real property. Mayor, Paul Williamson, real estate manager. Mayor, city council members, tonight before you is an ordinance making findings of public use and necessity, authorizing staff to make offers to purchase and if necessary to use eminent domain to acquire the subject property tract for a public water line easement out on I-35 for the water line component of the I-35 grade separation project that's going on out there. On a favorable motion, I will proceed to display the affected property tract on the overhead screens. Council member Hawkins. Thank you, mayor. I move that the city of Denton after having made the offers required by state law use the power of eminent domain if needed to acquire easement interest to a 0.148 acre tract of land which is located in the D Lombard survey, abstract number 784, city of Denton, Denton county, Texas and described in exhibits A and B now being displayed on the overhead screen and in the ordinance under consideration which is for a valid public use necessary to provide the installation and relocation of municipal water utilities to serve the public and citizens of the city. I recognize the second and then we display the legal, is that correct? Yes. Okay. Council member Gary. Second. Oh, did we already do that? The legal? Is that the survey? Is that what we were looking at? Yeah, mayor, I've already presented all the material. Is that adequate enough or do we need to put it back up there? Okay. All right. We do have a card wishing to speak before we call for any questions. Mr. Will Hesbeth, you want to come down and state your name and address for the record please? My name is Will Hesbeth. I live at 623 Newton. The one part of this that really troubles me is would you put the slide back up there showing where the property is located? Is that what you mean? Yes. Is that 35 right? Well, there's the location map. Put the other one back up. Is that 35 right there? Yeah, I-35 is to the north of it. North and south or east and west, 35? It's northwesterly and southeasterly. What's a cross street that's close to that? The next cross street down is Wind River. Okay. Thank you. The problem that I have with this particular ordinance or vote that you're going to take on this is the word eminent domain. I have a property on Bonnie Bray and I'm suspecting that's what you're going to try to do on my property. Eminent domain. In all of that legal language that was read, I could hear in there what they're saying. Basically, if it's for the interest of the public in general, for the safety or need for the whole city, then that's what you can do that for that cause. I suspect that when you start widening, when you're preparing to widen Bonnie Bray, the street that's going to go or for that portion to be opened up for the highway, the street is going to go right through my house so that it won't anything be left but the back porch. I've had that property for 20 something years planning as an investment. I know what the value is to me but I've already heard the r umblings of what's happening here in this council. Same wording, for the purposes of the public, safety, it needs to be done. The eminent domain portion of this is a part that troubles me. I'm going to have to spend lots of legal money that I don't have but I'm going to, to prevent you from just running over me like you might possibly do this person here. I don't really know the specifics here. I just know eminent domain is not a good thing for people who have invested and hope to get a return on their investment. I think that's what will happen here and I think it's worth planning to happen to me. Thank you. Any questions for staff? We have a motion in a second. Oh, I'm sorry. Yes, go ahead. Just real quickly. When was this particular extension planned? I mean, I guess it's kind of unusual to just see a very small portion of an extension. It's actually of the project, predominant, the bulk of the easements necessary for this relocation have already been granted by plat and this is, this is just a little small segment for the, for a crossover connection. That's all I want to know. Thank you. All right. Any other questions? Let's go. Let's vote on the board, please. Motion carries seven zero. Go on to agenda item six A. Consider adoption of an ordinance of the city of Denton authorizing the city manager or his designee to execute a contract for the acquisition and installation of a supervisory control and data acquisition hardware and software system known as SCADA. Good evening council, mayor, city manager. I'm Alyssa Kraft from the chief technology officer for the city of Denton. Today I would bring you a request for approval to purchase a SCADA system for the energy management organization. So what is a SCADA? SCADA stands for supervisory control and data acquisition system. So we'll continue to use SCADA because it's much shorter. Kind of go over just of why do we need it, some vendor information, some next steps and staff recommendation. So what is SCADA? SCADA is used to monitor and control a plant or equipment in industries such as energy, water, and waste control and transportation. This technology has been in place since the 1960s. It is a computer system that gathers data in real time from remote locations in order to control equipment and conditions. So why do we need it? This is required for the operation for the Denton energy center. The requested amount is already included in the total debt budget. This gathers and sends information and plant statuses to ER COT. It's necessary for the EMO to participate in the ERCOT market. This is the tool that they use to do their reporting requirements to ERCOT. It will also help EMO make fiscal decisions by using integrated forecasting software and in-depth reporting. So here's some vendor information. OSI stands for Open System International Incorporated. Their corporate headquarters is located in Medina, Minnesota. They're a global supplier of SCADA systems and they're widely used by utilities for electric, transport, and water. DME, they've used the OSI SCADA products since 2008. OSI is the sole source provider. Exhibits two and three would give you more details in regards to that. It's included in your backup. The cost of equipment, professional services, and testing is included in the total amount requested. So some of the next steps we would like for you to consider approval today. In the Pond Council approval, award the contract and begin build out of the Denton energy center SCADA system. Our goal is to have this project completed and operational by May 2018. With that being said, I'm here to take any questions. Mayor Pro Tem. Thank you, Mayor. And I'm not sure if you know the answer to this or not, but you very well might. It seems like the last time I remember talking about SCADA systems is when we were doing our last iteration of the gas well ordinance and we were trying to conquer the problem of air monitoring and how we can do that. And SCADA was introduced as kind of the industry standard of how wells are able to kind of have the most technology to test emissions, be able to sense when there's problems with the well so that it alerts people at the right time so we can fix problems before that. Is that the same sort of technology that's just applied to this specific type of infrastructure? So the goal with the SCADA system, it'll have monitors and temperature controls to be able to input information from all the different sensors. On a variety of issues. On a variety of things. So from both the safety issue but also just in terms of gathering the data you need for your reporting. Yes. And proactively addressing potential issues as well too. So part of the scope also includes a test system where they can test modeling and operations before they put it in production as well too. Thank you. Councilmember Begheri. I have a question about, I guess it's the Monarch family of products. So this particular company has the rights to Monarch. Is there no competitor for Monarch? So Monarch is the sole provider. OSI is the one that buys and sells and installs that information. So one of the things we're already currently an OSI customer. So this would also consolidate some of the additional packages as part of that. So in addition to adding a SCADA component, it's already going to be seamlessly integrated with some of the open short-term load forecasting items that they use that EML currently uses for data head markets, middles and stuff like that. So it's kind of all-encompassing package. As part of that, we also received $160,000 credit for being a current customer with the product. Okay. So this is an upgrade and additional integration, basically add-ons, I'm guessing. It would be like an add-on to the existing components they 're currently using with their cop. So then going back to my question about Monarch, does Mon arch have competitors? So as far as other potential SCADA vendors, I mean, there's probably GE and those kinds of things for those specific products. Okay. All right. Thank you. All right. We have a couple of speakers. Mr. Willie Hespeth, come down and state your name and address. Okay. All right. Deb Armantr, come down and state your name and address, please. Deb Armantr, 2003, Misty Wood Lane in Denton. Let's see. I didn't check off the for or against on this one because I don't know enough about this particular issue, but I learned a little something from reading the backup and from hearing the staff presentation just now. I just wanted to add that there are a number of costs related to Denton Energy Center that don't get added into that final tally count, the final sum total. And this is one of them. I'm not saying that means this is unnecessary. This sounds pretty necessary. But I would add expenses like this to the final cost. Maybe this was already on there. I don't know on that budget. But I just want to make sure that it was. And another cost that doesn't get added in is the cost of the properties that have not yet been procured that are needed to be purchased to build those substations. Because for some of the substations, we already own the properties. But others, we don't. And so that's another cost that has to be factored in. And I understand why those costs, at least as I understand it, as I read the itemized budget for DME that was discussed at today's work session, I couldn't find the properties on there. And maybe that's because properties for DME are typically purchased through the general fund, as I understand it, which is paid for by the taxpayers. So that's something else that should be transparent to the public. It's not necessarily up to DME to provide that information. That money is not coming from DME. But I think that it's certainly up to the staff together and the financing division and our representatives on council to make clear to the public that not all of these costs are going to be covered by ratepayers' expenses. A number of them will be covered by taxpayers' money as well. And again, this is just for the sake of transparency. So I just want to end by thanking the new city manager for doing this zero-based budgeting that brings more transparency to the public in addition to more accountability for each department and better budgeting for each department and ultimately better budgeting for the city. So when these costs that we all didn't know about start surfacing, we need to be grateful that we at least know about them, even if we're opposed to them. And I am opposed to some of them. Thank you. Councilmember Begari. Question for legal. Was the original purchase of the SCADA system subject to the sole source exemption as well? The original purchase? Yeah. Yes, it would have been if this is a continuation of that, correct? Okay. Thank you. Councilmember Gregory. Thank you, Mayor. Mr. Manager, the total budget estimate for the energy center is $227 million. And according to the presentation that we had today, am I correct that the SCADA is part of that $227 million and has always been considered part of that budget? This isn't an add-on or anything? That's correct. Thank you. All right. Next card is Mr. Willie Husspeth. If you come down and state your name and address, your time will begin. Willie Husspeth, Live at 613 Newton. Just as a continuation of the discussion that Ms. Armator mentioned, Dr. Armator, whether it's part of the original budgeted amount or whether it's add-on or not, the issue still remains the same. We have concerns about it whenever it was added. My concern is, are you looking at minority involvement in these companies that you're issuing these contracts to? I suspect you don't. You're not, because I don't ever see them in the firms that you hire to do this kind of work. Someone asked me the other day, "Why do you keep bringing this up?" Well, I think somebody needs to bring it up. It needs to be discussed. None of you have told me why. I've asked the question about the firemen, the parks. I brought up the DME. There are other things that are here in the city that I don 't see anybody that looks like me working there in the upper management. None of you have answered that question. Let me ask the question again, because I think this is what you do in a country where you have the freedoms to ask the question now without being drugged out and flogged and locked up in a cage. Why aren't there minorities in some of these countries? Specifically to this issue, did you consider that when you decided to, in your determination if this is a good company for you to issue this, award this contract to? Thank you. Council Member Begari. I just wanted to clarify that in our procurement process, we do have some type of points for historically underutilized businesses. Is that correct? That is correct. This particular item is exempt from procurement because it is the only available source, so we wouldn't be giving any points for historically underutil ized businesses as you would in the normal purchasing process. That is correct. If that's a question, yes, that is correct. Well, I'm just trying to clarify via conversation. Good. Thank you. I would like to clarify to make sure that on the record, this is the only company that does this kind of work. I already know the answer, but just for the record, this is the only company that does this kind of work, as the question she asked. Under the rules, if it's the only company, then you don't have to abide by the rules. For the record, is this the only company that does this kind of work? I believe that's been asked and answered on the record. She asked the question, and he answered it. This whole meeting is on the record. Okay. Thank you. Okay. Seeing no more blue cards, Council Member Gregory. Thank you, Mayor. I move approval of 6A. Council Member Hawkins? Yeah. Before I second to any watchers at home, we had a very comprehensive overview of the debt and energy center this afternoon for two hours, the subst ations, transparency, what everything's going to cost. So if you are a little confused or want to review that, we just spoke about that today. I second the motion. Let's vote on the board, please, for agenda item 6A. Yeah, 6A. Motion carries 6 to 1. Going to agenda item 6B, consider request for an exception to section 17-2- or parentheses D of the noise ordinance for the purpose of hosting the As hes 42 Festival. Good evening. I'm Christine Taylor with the Parks and Recreation Department, and currently Parks and Recreation receives all requests for noise exceptions. Ashes Smoke Shop, which is located at 420 South Carroll, has requested an exception to the noise ordinance for the 420 Ashes Festival that will be held Thursday, April 20th, 2017. Their specific request is asking for the decibels for an outdoor music festival to be increased from 70 to 75, and for the hours to be extended from 10 p.m . to midnight. After consulting, Parks and Rec consulted with the police department and reviewed the proximity of the location to residential and multifamily housing, we do not recommend approval of this exception request. Okay. Councilmember Briggs? In our back of it, so that they have had this event a few times now, this is just the first time that they have asked for this exception. That is correct. This will be the third time that they've held this festival . When consulting with the police department, they did indicate that last year there were seven complaints about the noise, and three in the prior year. So this is the first time when they went through this special event process that they are seeking the exception to avoid that. So whether or not this noise exception passes or not, the event is still going to be able to take place? That is correct. They can proceed with holding their event. They are going through the special event process with the City of Denton, and they can hold their event on April 20th without the exception to the noise request. And that's a Thursday night? Yes, it's a Thursday night. And we've got a map up there showing the proximity of the location and how close it is to the residential and multifamily housing. Thank you. Okay. Councilman Wasney? Thursday night is a school night, number one. This extension is from 10 p.m. to midnight. It's a school night. So I just have a real problem with passing this evening. Correct. And their letter of request does indicate they will have local bands performing, and the last performer is scheduled to go on at 11 p.m. I don't think so. Councilmember McGarry? Well, I'll be voting no on this only because I vote no on all of the noise exemptions. So I just wanted to be clear. I'm not singling out the 420 festival. I just I vote no for every one of the noise variances. Okay any other questions for staff? We have a card. Mr. Wood Husband, would you like to speak? Okay all right. Okay Councilmember Gregory? Well I move that we deny the request. So I suspect if we want to deny the request we're going to have to vote yes. So I move to deny. Councilmember Rodin? Second. Mayor Pro Tem Rodin, excuse me. So your motion is that we okay so you're moving to take a vote basically? So we vote yes to deny? If you want to deny the request you vote yes. Okay. We have a motion and a second. Let's vote on the board please. So the motion carries 7-0 denying the request. Move on to agenda item 7A. Public hearings hold the first of two public hearings for annexation of approximately 4.7 acres of land generally located north of Ryan Road west of Farm to Market Road 2181. I will go ahead and open the public hearing. Thank you Mayor, members of council, Mr. City Manager, City Attorney. This presentation is as stated in the introduction is the first of two public hearings for an annexation of approximately 4.7 acres of land located north of Ryan between Teasley and Country Club Road. This is the proposed schedule. We have the first meeting, our first public hearing tonight . The second public hearing will be on March 21st. Following the public hearings we will proceed with the readings of the annexation ordinance scheduled here on April 11th and then the second reading will be May 16th of this year. That is a quick presentation. We have this annexation. I'll be happy to answer any questions at this time. Any questions for staff before we take public comment? I did. Yeah. Okay. Thank you. We have a card. You don't need a card to speak at a public hearing but we do have a card. I'll ask the husband to come down. This is a public hearing. We have no more blue cards but this is a public hearing. So anyone wishing to speak on this agenda item, please come down, state your name and address and your time will begin. Come on down. State your name and address and your time will begin. Thank you. My name is Janice Heidelberger and I live at 425 Bernard Street, Apartment 907 in the Oaks of Denton. And gentlemen and madams, thank you for letting me speak. I would like to ask what is this property intended to be used for? So it's a question. Okay. Let me see if we have any more questions for the public hearing and then we'll answer them all at once. Any other questions, any other comments or anyone wishing to speak on this item? Okay. We will close the public hearing. Calling one more time. Anybody wishing to speak? Okay we will now close the public hearing and staff if you could, there's a question asked of what was the intention of this property for the annex ation? The subject property is currently developed as a single family development. At this moment the property owner has not indicated any immediate proposal for development so it will remain single family at this point. You mean it's zoned for single family, you said single family development. It's currently existing as a single family development. It's already developed? Correct. Okay. All right. Any questions for staff? This is not an action item I do not believe. Is that correct? That's correct. It's not an action item. It's the first of two statutorily required public hearings for an annexation. Okay. All right we'll move on then to our concluding items, agenda eight. Councilmember Wasney? Yeah I'd like a staff report please. As we move into budget we have nine city attorneys and I'd like a breakdown of and basically a brief summary and a justification of why we have nine attorneys on staff and kind of break down what caseloads do they have, what are their responsibilities and again as we look at this department and what it costs the city I'd just like to see that summary and justification for the nine attorneys. Thank you. Mayor Pro Tem. I appreciate the backup we got in our packet this last Friday responding to my request for information about the digital divide and what the city 's plan is and a little underwhelmed by our approach to that question. It doesn't yet address what neighborhoods don't have service or whether or not we've ever done anything to assess that and other commercial areas in town as well. So I'd like to request before I leave council which gives us a little bit of options left that we have a work session item on that topic to have a more comprehensive discussion on that. Thank you. All right. I've been remodeling a kitchen for the last week and so I 've been to the city dump a few times and I just wanted to give a shout out that staff is just so professional. That place is so well run and it is it's cool. I mean it smells a little funky sometimes but it is it is amazing. We are very spoiled and Denton for some of the things that we get to use as residents here so good job city staff. Council member Gary two things first I want to give a shout out to the Denton animal shelter volunteer of the year. We went to the reception for the volunteers at the shelter yesterday and it was really upbeat positive environment. Things are on the upswing at the shelter. So congratulations to Kim. Kim Guffy I think was her last name Guffy and Ursula. She also got an award. Sorry I forgot her last name but congratulations to both of them. Kim has been a volunteer at the animal shelter since 2011. So she has put in so much time at the animal shelter. It's just really an amazing thing to see people volunteer that way. Second thing in the newspaper maybe two two or three days ago there was mention of the ethics committee having hired outside council and outside council came forward with an opinion about the necessity of charter changes for ethics ordinance . And so I'd like to hear or at least have a briefing from that attorney about what it is he thinks is our requirement as it relates to having either a charter change or not for adopting a new ethics ordinance because it sounds to me that it may be different than the direction that we were headed in. So that's what I'd like a briefing on that. Councilmember Briggs. So I have a few. First during our report Dr. Banks today was going over water and wastewater and as he was going over his presentation I wondered how do we calculate the wastewater charge per customer. Like I never really understood that. So if we could just have an explanation in our Friday report that might have been something you guys have talked about. So I would like to request that planning or some environmental staff visit the current Bucky site and investigate claims that there are many more natural springs than anticipated and that they are filling in the pond. We were told they were going to keep supposedly with concrete and turn it into a dry bed and report back to us if these are true and if so if there's any unintended consequences. Also I would like to get the Chief's Town Hall on immigration on the website if it's not there and get Mr. Hutzbeth the update and staff report that we recently received. Could he get a copy of that staff report on the fire and police hiring. It was recently got an update on that. I think that may be helpful. Councilmember Gregory. It was a dark and stormy night about 33 years ago when two University of North Texas graduate students James Howard and Finley Stewart were sitting around with their professor Ted Colson and they said somewhere in the state of Texas we ought to have a Texas storytelling festival. And those three people made it happen and this weekend is the 32nd annual Texas storytelling festival in Denton, Texas. It starts Thursday in the Civic Center with ghost stories. They're scary. And then there's stories on Friday and Saturday and Sunday and people can buy a pass for the whole festival or they can go to individual concerts and if you've never been to a storytelling concert well friends it's time to go. This weekend and Denton, the city of Denton has been a sponsor of the festival every year and I'm very proud of that. Got a couple. Need somebody to refresh my memory. When we talked about, so just get a report on this. When we talked about refunding the revenue bonds and the additional money that we would have from freeing up the reserve, there was some discussion about what to do with it or what we're going to do if it was going to be to pay down some debt or pay off the principal. And it seems like some of those have been accumulated to the fund balance of the respective utilities in which that reimbursement occurred. So if I could just get an understanding of, refresh my memory of that was the council direction on that, that'd be great. And I don't know much about this but Mr. Husspeth brought up in a work session about restrooms at Fredmore Park I believe. So if we could just get some kind of report on if that's the case, why is that or if there's some other restrooms available, just an understanding of what really is the status out there as compared to the other parks that we have in our system. Okay, anything else? All right, we will stand adjourned at 740.